Q & A with Dottie Herman

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Q1 - I own a three-family home in Massachusetts, and would like to use it as a rental/income property and purchase a home in a more rural area. Can you help me find a lender? I spoke with a lender who said that they would not consider the rents from all three apartments because it wasn't on my taxes as such. I tried to explain that I am living in one apartment and my mother in another, so the two apartments weren't rented out. I have all three apartments rented out-$700, $700, and $850 per month covers ALL the mortgage, taxes and insurance, and leaves me with $950 income at the end of the month. I am so frustrated and any help on such a lender or your professional suggestions would be greatly appreciated.

A - With a conventional mortgage, the typical requirement is a 2-year history documenting rental income with an investment property via the Federal Tax Return. This condition can be avoided by applying for an FHA loan, which does not require a 2-year history for rental income. If you would like to discuss the requirements for on FHA loan, please contact us, and we would be happy to do so with you.

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Q2 - My partner, along with 3 dogs and myself are likely to be relocating to NYC.  We have visited but never lived in the city and have a very cursory knowledge of the various neighborhoods.  What resources do you suggest I review prior to working with an agent.  I don't want to waste the agent's time and money nor mine.

A - The process of selecting a real estate professional involves not only researching their expertise, but also talking on the phone, or meeting with them personally to establish a rapport. Your agent is both resource and sounding board, and the relationship between you is key.

Suggested first steps are researching agencies and agents who may have been referred to you. Visit their websites, read their bios, and look at the listings they represent. If you have special neighborhoods that you initially prefer, your on-line search may produce agents with specialties. In addition, once you do select an agent, you need to be sure to communicate that he or she must show you pet-friendly options only. Not all buildings in New York allow pets, and 3 dogs is a challenge. The search feature on Elliman.com allows you to select a "Pet Friendly" option, which can help you filter out properties that will not accommodate your dogs.

We'd be most happy to assist you in your search and to match you with one of our real estate professionals who is best suited to your needs and who will help you find your home in New York.

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Q3 - I have a three-part question: first, how far in advance of posting our house on the market should we have our inspection done? Second, should we make cosmetic improvements before this inspection? And third, how do we start the process of appraisal and listing our house?

A - Spring is an excellent time to begin the marketing process of your home, and it's often a good idea to identify features that may be problematic when it comes time for the bank's appraisal or when an engineer inspects the property on a purchaser's behalf. If you have concerns, it's advisable to have the house inspected now and then, depending on the costs involved, you may wish either to make the necessary repairs yourself or to include an allowance for your buyer to do so later down the road as part of the negotiation process.

Hiring a real estate professional who specializes in your region will help you prepare your home for tours, determine price, implement a marketing strategy, and assisting with choosing appraisers, inspectors, etc., whom they know to be familiar with comparable homes to yours, and who will be able to provide accurate information in a timely manner. Please let us know if we can be of assistance in helping you find the right real estate professional for your needs so that you can get started on the process.

Best of luck!

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Q4 - I am currently living in Canada, looking for a home in Manhattan. I am wondering if you have a guide to buying real estate in the U.S, as I am unfamiliar with the buying process there.

A - This is a wonderful time to consider purchasing in New York City, as there are many opportunities in the studio and one-bedroom market. Browsing the internet in advance will help familiarize you with the variety of neighborhoods New York has to offer, and visiting websites like Elliman.com will help you begin to learn about size and pricing. We recommend working with a real estate professional to help you through the process, and would be happy to match you with an agent who best suits your particular needs.

As a non-US citizen, a condominium may be your best option, as the requirements for purchase on this type of property are more flexible. Only 10% is due at contract signing, and the balance is due at closing. In order to make your purchase, you will also need to line up reference letters from people such as your employer and personal friends, which will be included in the paperwork.

Establishing banking relationships in the United States, including with a Mortgage Lender, is most important. If you would like us to refer you to a professional at DE Capital Mortgage, we would be happy to do so. Additionally, real estate practices and procedures may differ from those to which you are accustomed, so consulting with a United State Real Estate Attorney who is familiar with Canadian requirements might also be a good first step. Please keep in touch and let us know how we can help you find your home in New York.

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If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com