Deal or Dud?

Is your deal contingent on financing? If not, then you won't be able to get your deposit back if anything goes wrong with the deal (such as the stock market plunging, resulting in the bank not approving your loan).

No one knows for certain what the real estate market will do in the future, so it's just impossible to say whether one should wait for 6 months. There's just no magic formula. One thing to consider, though, is whether you expect to 'grow out' of the apartment (if you have a child, for example). Would you be comfortable there for more than four years, if necessary?

You bought a studio for $465 in this market. You need to spend an additional 50k to renovate and you're asking if you made a bad deal...

no he said he bought a 1 bedroom. you have no idea whether he made a bad deal or not, more negativity for the sake of being negative.

Just to clarify—it is a true 1 bedroom and not a junior 1 or studio. Its on the fifth floor of an elevator building and gets good light. Layout is great and location is very convenient for work. We don't plan on having children so we could imagine ourselves there for several years. Yes, I'm trying to convince myself that we didn't get a bad deal! The contract is contingent on financing and we're approved so looks like there's no turning back unless our loan fell through. You're right bramstar—there's no magic formula so no point in losing sleep over whether we should have waited. Renovation estimates are running a bit higher than we anticipated. Would that justify asking for a price reduction or would that come across as back peddling?

575 sq ft is a studio, nothing more. They obviously are intelligent, successful people...why then would they spend $465k on a studio in need of $50k in renovations.

go on the ny times.com and look at 245 east 37th st apt2h 1-bed 1bath. 800 sq ft. thats a deal.

o ya... its listed at 525k 645 maint.

A studio is 400 sq. ft. 575 is a very small 1 bedroom... can you and your wife survive living in such close quarters without going insane?!

Care to provide a link er1to9

Wow just saw it, atinyc you should pull out of the crap box you just put an offer on and buy 245 east 37th st, this one is move-in condiiton

http://realestate.nytimes.com/sales/detail/253-NS8052039

a little too late, i already found it

Only in Manhattan would 575 sq be considered a one bedroom. I lived in a 525sq studio. Saying it's a bedroom does not make it true. I'm just confused about why a couple who could afford $465k, plus closing, plus renovations would not think the deal through and realize it is not the time to spend top dollar in '08.

575 SF = oof.

If you are stuck with your apartment (no financing contingentcy etc.) - don't look back - just try to enjoy it.

i love this board. the man in contract tells you its a one bedroom and despite the fact that you have never seen even a floorplan, let alone the actual apt or even a photo, you insist its a studio. And then again, notwithstanding that you really don't know anything about the apt you have a strong, and lets face it obnoxious, opinion as to value and the man's decision making. Genius. Is Julia really dco?

shes a complete moron, as is october, if you read the earlier posts you would know that he does have a mortgage contingency, idiot

atiny — do you make all your financial decisions based on an anonymous message board? Are you serious?

wow, I thought this was an open board for free flowing thoughts and ideas regarding real estate. Yes I did not see the floor place but the buyer said 575 sq ft. Calling me names is unkind and doesn't add any good ideas to this blog.

atinyc, don't listen to the doomsdayers here. Nobody has a crytal ball. A true 1 br will always hold greater market value over a jr 1 that has been reconverted into a 1 br. And I know of 1 br's that are smaller than 575 sf. Also, your place is in a good location, and the fact that the building financials are good is a plus.

If you've looked at enough places to get a sense of the market before you bought, then you should know if you got a good deal. And as long as your time horizon is at least a few years you should be able to weather a storm.

What you should also consider is the cost to you of renting vs. buying. I bought recently and was concerned about the market dip, but figured that I couldn't see myself paying the same amount per month in rent that I could spend on a mortgage, and I already had money saved up for a down payment & closing costs.

The definition of a studio is that it does not have a separate legal bedroom or bedrooms. The OP said that his was a real 1BR so it cannot be a studio no matter what the sq ft is. Unless you have seen the floorplan and the OP is lying.

besides it may be a real 575sqft as opposed to the inflated broker speak and offering plan sqft which would label a real 575 sqft as 750 sqft.

Thanks for the sound words uptowngal and divvie. It is a true blue 1 bedroom and feels more like 600 than 575sqft (which we measured). we've been looking for almost a year now (seen at least 50 apts) and this place felt like the right fit for the right price.

We do have a really good rental deal though (rent stabilized) which has allowed us to save up for the down payment over the years. I still wonder if its better to keep renting (our monthly mort/maint. payments would be triple what we pay in rent) but our quality of life would improve vastly. Our current place is a dive and makes 575sqft feel palatial.

It turns out, our attorney hasn't sent the contract yet so we're not locked in...though i'm leaning towards going for it. I'll see if we can lower our offer a bit if its not too late. the other thing to factor in is interest rates appear to be rising...

I think i'm driving myself and my wife crazy! At this rate, I might wind up in a bachelor pad.

Think about staying in your rent stabilized apt.and see where the market goes in the next year.

As for the rate, just drag your arse with the deal if you think rates will go down in 6 months. The recent past has not kept rates this high for more than a few months.

atinyc,

my husband and I have survived for four years in a 500-square-foot studio. I'm sure 575 square feet will be wonderful for you.

buyers always get skittish in a declining market -- fearful that they are "trying to catch a falling knife" -- but if you don't have to sell tomorrow -- i.e., if you could stick it out five years if you had to, do it.

Your quality of life will be better in a better apartment, and five years out is far enough that a down cycle will have time to correct itself.

If it doesn't, and you need to trade up (say you have a kid) prices of properties on the rung of the ladder above you will have come down too.

Also, nobody in the world can tell you what interest rates are going to do after the election.

ali r.
{downtown broker}

Some of the comments on this post are ridiculous as ususal. Some people love to be negative and feel the need to project it onto everyone. 575 sq ft for a 1 bedroom is not simply limited to Manhattan. Years back I rented in Westchester, and I had a 2 bedroom that was about 500 sq feet. I lived by myself, so I wasn't triping over anyone and the rent was priced to a below the market rate for a 1 bedroom rental price because of the small size of the bedrooms.

I agree with front porch that as long as plan on staying in the apartment for 5 years or more, chances are you don't have to worry about what price you paid. I am sure someone will correct me if I am wrong, but seem to recall that the typical downturn in the real estate market lasts between 3-8 years with 5 years being about average. In the meanwhile, no one knows how prices or interest rates will react.

Why can't people have different views, thoughts, etc. without being called ridiculous. Of course I think I've heard everything 500 sq ft is now a two bedroom. If the OP wants to believe 575 sq ft is a one bedroom then that's fine.....

This decision does not seem all that difficult. atinyc has looked at enough apartments to know what they like. This will improve their quality of life "vastly" and they can afford it. It is well located and the layout works well for them. The gain in quality of life is worth a lot. Why should they stay in a "dive" situation when they will be happier in this place? It's always may be possible to find a better deal financially, just like you can always get a better computer if you wait 6 months. Go for it and don't look back.

Agree with 680, move forward if you can afford it. Rent Control and Rent Stabilization is a ball and fucking chain for all but the elderly who it effectively protects. On one end you have Cyndi Lauper quibbling over her absurdly low rent and on the other hand adults who moved here when they were kids, fell into a deal, and now are doomed to a life of living in squalor. Because they can't afford not to. Move on. And good luck. :)

what don't you get julia? sq footage does not define whether a place is a studio, 1br, 2br, etc. Guess what? the number of legal bedrooms (or lack thereof) does. That's it. Nothing more to it than that.

I think the terminology you are reaching for is closet.

As in "575sqft? that's a closet in my eyes"

Your using studio as a way of emphasizing the lack of space is akin to people talking about the 800lb gorilla in the room when the correct term is the elephant in the room. 800lb gorilla means a company that is so powerful (used to be Microsoft for example, now it is google) that they can destroy competition with ease. The elephant in the room is the subject that no one dares to talk about but it is so blindingly obvious and so critical to the situation that you can't ignore it.

I suggest you need to gen up on your similies.

I agree with divvie, I am not certain of the precise legal definition of a bedroom in New York City, but the size of the room is only 1 factor in the definition. Julia, my issue was one of misplacing fact vs. opinion and understanding when it is unwarranted with regard to frequent off topic critisms.

As I understood it, a bedroom is a room that must have one dimension equal to or greater than 8'-0"(as for a height requirement and that it must have a total window area equal to 10% of the square footage and an operable window area equal to 5% of the square footage. Also the ceiling height needs to be greater than 7'. I also believe there has to be a closet as well, but I am not certain. I am sure someone on this board knows the precise definition.

This would mean that a bedroom could potentially be 8' x 8' (64 sq feet) with a 7 foot tall ceiling, a window and a closet. That's not to say it's a room that I would be happy living in for any length of time. In the real world this would feel more like a walk in closet rather than a bedroom/living space, but that wouldn't challenge it's legal status as a bedroom.

Julia, you're free to have whatever views and thoughts you want, that doesn't make them reasonable. The man told you its a 1 br. He's been in the apt. Despite having never been there, never even seen a photo or floorplan, you are sure its a studio, and you've expressed your views several times and have generally been obnoxious about it, and you're incredulous that anyone would have the temerity to question your judgment. Why don't you just tell him about his wife too, I'm sure you have her figured out despite having never seen or met her.

ccdevi...and you're saying I'm obnoxious. I'm ending this by saying I hope they will be very happy in their STUDIO apartment that they paid $465k and will spend $50k in renovations, plus closing costs. good day and good bye!!!

yes I'm saying you're obnoxious (and that you don't know what you're talking about). And you further demonstrate it every time you post. Can you tell me about my apt now? I'll give you a hint its in Manhattan.

atiny ENJOY!!!!!

I just sold an appt on 20th and 3rd and I'm sad to be leaving the neighbrhood.. The Walks around Gramercy Park - The Shopping, the restaurants - Union Square... It's so nice at night!!!!

I just feel that whole area is the best part of the city.

Don't sweat it. It's funny you're here wondering if you spent too much and I'm here panicking that I sold too cheap.. Bottom line that area rocks - You are IN and I am OUT. But, I don't think either of us can be THAT far off... And great point about the interest rates

ENJOY MAN... !!!! I'm enjoying my last few nights / weeks.

I lived in two different two-bedroom apartments that were both in the 600-650 square-foot range, one in Brooklyn and one in London. I'm surprised to learn that they were actually studios. Or maybe one-bedrooms? I must have been imagining furnishing three separate rooms and moving between them.

Regarding the finances, although the new place may cost triple what you were paying in rent, remember that the principal portion of your mortgage payment becomes equity for you (assuming that you got an amortizing loan), and you get to deduct your mortgage interest and the portion of your maintenance payment that goes to real estate taxes, so your actual cost isn't as high.

I wouldn't try to time the market. Nobody really knows what's going to happen. Maybe you buy, and the market goes down, and you lose some money. But you don't have to move. And if you do move, then the next place that you buy will be cheaper than it is today. On the other hand, if you don't buy, and the market goes up, then you won't be able to afford a place that's as nice as the one you're considering today.

willisblackburn - pretty sharp

You cannot compare London to Manhattan...I lived in London for three years in the smallest Onebedroom apartment. It was the size of a walk in closet.

Yes Julia, unlike London, Manhattan is famous for the sheer vastness of a typical apartment.

Julia please stop, you're embarrassing yourself.

I'm sitting in my living room with a broken leg and nowhere to go...I apologize. I'm bored and this blog is always interesting.

I'm sitting in my living room with a broken leg and nowhere to go...I apologize. I'm bored and this blog is always interesting.

I'm sitting in my living room with a broken leg....I apologize but I'm bored and cannot get out...I find the real estate board interesting and informative.