Saturday, February 2, 2019

WHEN IS A COMMITMENT LETTER NOT A BANK COMMITMENT: WHEN THE PURCHASER FORFEITS THE DEPOSIT BECAUSE OF IT

WHEN IS A COMMITMENT LETTER NOT A BANK COMMITMENT:
WHEN THE PURCHASER FORFEITS THE DEPOSIT BECAUSE OF IT
 
All real estate agents and purchasers beware!! In residential real estate transactions where financing is involved and the contract of sale is contingent on the purchaser's ability to obtain financing (of course there are transactions which allow the purchaser to obtain financing that do not provide for a contingency), it is imperative the purchaser and the buyer's agent understand the complexities of the mortgage clause in the contract of sale.
 
The purchaser has been pre-approved by a lender and the transaction is well on its way to a successful conclusion depending on the application review by the cooperative corporation or condominium board of managers, if applicable. True to her word, the lender issues a commitment within forty-five days of the contract execution. Unfortunately for the purchaser, seller and the real estate agents, the commitment is anything but what it claims to be because it is subject to several conditions, one of which includes the review of the finances of the condominium or cooperative building. In all financed transactions including one to three family dwellings, the lender's commitment will be contingent upon a satisfactory bank appraisal and there will be conditions where the lender will seek to verify assets, income and continued employment. Unfortunately, within the next two weeks you learn that the commitment was rescinded by the lender because of the building's finances or possibly because the purchaser's employment or asset base changed between application and closing. The purchaser's attorney sends the letter of declination to the seller's attorney expecting the return of the contract deposit; however, the seller's attorney responds that unless the purchaser attends the closing and pays what is required according to the contract terms, the purchaser will be held in default and forfeit the contract deposit.
 
Pursuant to the standard form residential contract, a commitment which is conditional upon any factor other than an appraisal is considered a firm commitment and the purchaser cannot cancel the contract. Once a commitment is issued by the lender, whether two days after contract signing or two months later, if the lender does not complete the transaction for any reason other than a below market appraisal which causes the lender to reduce the principal amount of the mortgage to an amount less than what is stated in the contract, the purchaser can be held in default and lose her deposit. Even if the commitment letter is issued and not delivered to the seller's attorney, the terms of the standard form of contract mandates that the commitment is nonetheless deemed issued and the risk is entirely on the side of the purchaser.
 
The parties need to understand the difference between a mortgage or loan contingency and a funding contingency. Many attorneys representing prospective purchasers attempt to modify the standard language to allow the purchaser to terminate the contract and obtain the return of the deposit if and when the lender rescinds a commitment after it is issued; however, most attorneys who represent sellers will not agree to modify the provision to allow for a funding contingency. In effect, if the bank issues the commitment and the bank chooses to not fund the loan, the risk is on the side of the purchaser. If the purchaser's financial status changes after the commitment is issued or if the building's finances are downgraded by the bank, the seller would have the right to claim the contract deposit as liquidated damages unless there is specific language in the contract that provides the purchaser the right to terminate the contract with the return of the deposit.
 
In every transaction where I represent a purchaser, considerable time is spent explaining the intricacies of the contract, most specifically the mortgage (loan) contingency clause. The purchaser is directed not to have the lender rush the issuance of the commitment unless it is a firm commitment not subject to any conditions or contingencies. The consequences of a commitment that does not actually commit may cause the triggering of a default if the transaction is not completed by the purchaser. It is certain that in a transaction where the seller refuses to return the deposit, the purchaser will not simply walk away from her money; litigation will almost certainly follow. For those real estate agents who are acting as buyer's agents, you are a fiduciary to your client and therefore held to a higher standard. Any representations you may have made to the purchaser concerning the mortgage process may determine whether you will be named in a lawsuit should the purchaser attempt to recoup her deposit from the seller so direct yourself accordingly.
Alfred M. Fazio, Esq.
Capuder Fazio Giacoia LLP 
90 Broad Street 
New York, N.Y.  10004-2627  
212-509-9595

Saturday, January 12, 2019

Emily Blunt & John Krasinski Buy $11M Brooklyn Heights Condo / L Train / Brooklyn Heights Condos / Brooklyn Navy Yard's Wegmans to Open / Staten Island - Coney Island New Ferry Service

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Emily Blunt and John Krasinski buy $11M Brooklyn Heights condo
The couple purchased two adjacent units that can be combined to create a full-floor residence.
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In Brooklyn Heights, condos on former library site launch sales from $1.088MThe 38-story building will bring a new Brooklyn Public Library branch, along with 133 apartments, to the neighborhood.
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Brooklyn Navy Yard’s massive Wegmans to open this fallThe 74,000-square-foot supermarket will create 500 jobs
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NYC Ferry will launch service to Staten Island, Coney IslandThe ferry service will hit all five boroughs by 2020
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Brooklyn renters saved $6.4M thanks to L train shutdown hypeNorth Brooklyn renters who signed 2018 leases are the biggest winners in wake of the L shutdown cancelation.
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Cuomo’s new L train plan will get independent review, says ByfordThe NYCT president said he will not be "steamrolled" into rushing a review of the suddenly-announced plan
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5 Listings in Williamsburg to check outCheck out apartments asking from $639,000 to $1.15 million.

CALL / EMAIL ME! I'M HERE FOR ALL YOUR REAL ESTATE NEEDS!
C: 212-321-0115
E: NYCTREALTY@GMAIL.COM

Fernando Branco, GRI, ABR, CNE
Lic. Assoc. Real Estate Broker
Residential Real Estate
Commercial Sales & Leasing 
Graduate Realtor Institute (GRI) 
Accredited Buyer Representative (ABR) 
Certified Negotiator Expert (CNE)
R New York
641 Lexington Ave, NY NY  10022
c: (212) 321-0115

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JLo Lists 432 Park Condo / Best Things in NYC Now / Billionaire's One Beacon Court Relists $70M PH / UES Mansion / WV 19th Century Townhouse / Hudson Yards Performing Arts Center to Open

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Jennifer Lopez and Alex Rodriguez list 432 Park condo for $17.5M
The couple purchased the apartment less than a year ago
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26 best things to do in NYC right nowCurbed New York's editors have chosen the 26 places that you must visit in New York right now—the new classics, old favorites, and other essential sites.
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Billionaire’s modernist One Beacon Court penthouse returns with $70M discountThe apartment, designed by Charles Gwathmey, was originally asking $115 million; now, it’s listed for $45 million.
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19th-century West Village townhouse with 6 fireplaces seeks $5.95M
The home is configured as a multi-family residence but can become a single-family abode.
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For $67M, an opulent Upper East Side mansion with Thierry Despont renovation
The 13,000-square-foot home has a ‘resort-style’ fitness center, among other over-the-top perks.
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Hudson Yards performing arts center sets opening dateThe Shed will debut on April 5 with several notable commissions
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Tracking the biggest buildings taking shape at Hudson YardsChecking in on the ambitious, multi-billion dollar megaproject.

THINKING ABOUT SELLING AND/OR BUYING IN NYC?

CALL / EMAIL ME! I'M HERE FOR ALL YOUR REAL ESTATE NEEDS!
C: 212-321-0115
E: NYCTREALTY@GMAIL.COM

Fernando Branco, GRI, ABR, CNE
Lic. Assoc. Real Estate Broker
Residential Real Estate
Commercial Sales & Leasing 
Graduate Realtor Institute (GRI) 
Accredited Buyer Representative (ABR) 
Certified Negotiator Expert (CNE)
R New York
641 Lexington Ave, NY NY  10022
c: (212) 321-0115

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Friday, December 28, 2018

New Years!! Fireworks! Street Closures... 942 New Tower in Brooklyn... Historic Clinton Hill Carriage House... and more...

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Here are your New Year’s Eve street closures for Times Square
Everything you need to know about the ball drop
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Where to watch New Year’s Eve fireworks in NYCFour alternatives to spending New Year’s Eve in Times Square or stuck at home.

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Downtown Brooklyn may sprout 942-foot towerThe development as planned would be the densest in Brooklyn.

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Historic Clinton Hill carriage house with massive backyard wants $3.4M
The three-level home, located at 314 Waverly Avenue, could use a modern makeover, but there’s plenty to work with.

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4 open houses in Clinton Hill to check out this weekendIf your’e looking to buy in the neighborhood, here’s a few places worth considering

Here are your New Year’s Eve street closures for Times Square
Everything you need to know about the ball drop

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Everything you need to know about getting around NYC this New Year’s weekend
Major changes coming to New York’s streets, subways, buses, and more

THINKING ABOUT SELLING AND/OR BUYING IN NYC?

CALL / EMAIL ME! I'M HERE FOR ALL YOUR REAL ESTATE NEEDS!
C: 212-321-0115
E: NYCTREALTY@GMAIL.COM

Fernando Branco, GRI, ABR, CNE
Lic. Assoc. Real Estate Broker
Residential Real Estate
Commercial Sales & Leasing 
Graduate Realtor Institute (GRI) 
Accredited Buyer Representative (ABR) 
Certified Negotiator Expert (CNE)
R New York
641 Lexington Ave, NY NY  10022
c: (212) 321-0115

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Tuesday, December 25, 2018

The Most Beautiful / The Most Expensive / Best Architecture / $82M 432 Park's 95th Floor Now Split in Two / $39.5M CPS Ritz Carlton

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The most beautiful NYC homes of 2018

When it came to beautiful listings this year, New York City did not disappoint. From celebrity homes to historic townhouses to opulent penthouses, these are the 10 homes that made us say "wow!" in 2018.

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NYC’s best new architecture of 2018
Take a trip through the year in architecture
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432 Park’s 95th-floor penthouse now split into two $41M listingsThe 95th-floor penthouse first appeared in 2016, asking $82 million; now, it's returned as two apartments.
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Billionaire producer Sidney Kimmel lists expansive Central Park South spread
Billionaire philanthropist and film producer Sidney Kimmel, who cultivated his fortune as the founder of Jones Apparel Group, has listed his full-floor apartment at the Ritz Carlton Residences on Central Park South for $39.5 million
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NYC’s 20 most expensive homes sold in 2018Unsurprisingly, every single home on this list is in Manhattan.


THINKING ABOUT SELLING AND/OR BUYING IN NYC?

CALL / EMAIL ME! I'M HERE FOR ALL YOUR REAL ESTATE NEEDS!

C: 212-321-0115
E: NYCTREALTY@GMAIL.COM

Fernando Branco, GRI, ABR, CNE
Lic. Assoc. Real Estate Broker
Residential Real Estate
Commercial Sales & Leasing 
Graduate Realtor Institute (GRI) 
Accredited Buyer Representative (ABR) 
Certified Negotiator Expert (CNE)
R New York
641 Lexington Ave, NY NY  10022

c: (212) 321-0115

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