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New York Real Estate Law Blog

What to expect in 2020 for New York City real estate

The real estate market in 2019 in New York City had (more than) its fair share of ups and downs. Some of the more tumultuous events included deals with a tech industry giant that exploded with fanfare and then quickly died, changes to the way that rents are controlled that have landlords crying foul and sliding investment sales.

So, what can New Yorkers expect for 2020 in the real estate market? Here's what some industry professionals are saying will be the hot areas:

Tips for buying vacant land

Buying a home is great -- but building your own is often better. If you want to build, however, you first have to find someplace to do it. That means buying a vacant piece of land, however, before you can get started.

Purchasing vacant land can get a little tricky, so here are some tips that experts have passed on:

Capital grain tax and investment property

If you've invested in the right piece of commercial real estate, you may find the value going up. You may even decide to cash in and sell.

Just be careful. The Internal Revenue Service (IRS) may want a piece of the deal. Whenever you spend a little to acquire an item and resell it for a lot more, that's called a capital gain -- and it's taxable.

How do contingency clauses protect property buyers?

Getting an offer on the home you are selling is a thrilling experience -- especially if you've been trying to sell for a while. You may immediately feel a deep sense of relief now that you finally have a buyer.

Before you get too excited, you need to understand that your buyer has likely attached some contingency clauses to their offer. It's essential to know what they could mean.

Is an assumable mortgage right for you?

When you buy a home, the most common thing to do is to get a brand-new mortgage so that you can pay the seller's asking price. The seller may or may not have a mortgage that needs to be paid off with part of that money.

However, some home loans are "assumable." That means that -- if you qualify - you can actually take over the existing home loan. This is particularly true with homes where the mortgage has been backed by Veterans Affairs (VA), the Federal Housing Administration (FHA) and the United States Department of Agriculture's (USDA) rural housing program.

Breaking up your business partnership

One of the hardest things to do when you are in business with another person is breaking up your business partnership. But while it is typically unpleasant and often contentious to do so, it is often necessary to dissolve your partnership for the viability of the business to continue.

Your partner may be misappropriating funds or engaging in other conduct that makes it impossible for them to continue to be associated with your thriving business. The question that remains, however, is how do you legally disentangle yourself and your company from this partner.

What's a spite fence?

A good fence can protect your property from intruders, safely corral your dogs or kids in your yard and serve as a marker for the boundary between your property and another's. Bad fences, on the other hand, can be an eyesore and a detriment like no other.

We're talking about spite fences. Spite fences are designed to be inconvenient eyesores. Their owners erect them with every intention of disrupting their neighbor's peace and enjoyment of their own property. In some cases, fences are erected just to spoil someone's view (and, maybe, lower their property's value in the process).

How do you finance an investment property?

Investment property is a great way to develop your passive income, increase your assets and acquire financial stability -- but first, you have to make a purchase. That's not always the easiest thing to do unless you happen to have a lot of cash laying around.

Short of getting a rich uncle to loan you the money, here are some of the ways you can approach financing:

How real estate agents get sued

A real estate purchase can be both a significant emotional and financial investment for a lot of people -- which means that a lot of people respond to problems with a purchase-gone-bad by filing lawsuits. Sometimes, those lawsuits are aimed at real estate agents.

So, if you're a real estate agent, how do you minimize the risk to your good professional name? Here are some tips for dealing with both buyers and sellers:

  • Be very clear about any problems. You naturally want to sell yourself to your client, but don't oversell what your client can expect. Being honest about potential problems your client faces, buying or selling, can help your client maintain reasonable expectations.
  • Don't make the hard calls for your client. When your client has a decision to make, your job is to give your advice -- based on your training and experience -- and explain the options as clearly as possible. Don't allow your client to force the decision-making process on you as well. Tell your client that the ultimate decision is up to them.
  • Know when to withdraw. Some clients won't take "no" for an answer. They may want you to engage in something unethical or dishonest. It isn't worth your license or a lawsuit to go along with the plan. If your client won't take the high road, end your working relationship and move on.
  • Pass on the "difficult" client. Regardless of the size of your potential commission, clients who have already been problematic for other realtors are likely to be problematic for you.

Tips for selling your share of a co-op

Not just anybody can buy your share of a co-op. Housing cooperatives are quite common in New York, but the ownership interest in a co-op works very differently than owning an individual home. Taxes and repairs are shared, and there are a lot of advantages to pooling your resources -- but reselling often requires finding someone that the co-op will accept as a buyer.

That may be harder than you think. Even famous, well-connected people can be rejected from a co-op for one reason or another. Pop icon Madonna, for example, was rejected over fears that the co-op she wanted to join would be stalked forever after by paparazzi and fans. President Richard Nixon was also declined membership in a co-op.

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