Continuing a theme from my previous appearance on Selling New York, in the April 22nd episode I had a chance to focus on identifying and addressing the inherent “energy” of the apartment that I was tasked to sell. An apartment, house or any kind of home acquires its energy not only from its own history, but from the histories—the experiences, goals, aspirations, obstacles and anxieties—of the people who live in it,  as well as of their guests, their neighbors and, dare I say, their brokers. I was educated in the existence and power of this type of energy by my friend and colleague Reginald Arthur, who for years has studied the energies of individuals, their homes and their environments. Almost as soon as I took over the listing of an apartment at 50 Gramercy Park North, I brought Reggie in to help promote the residence’s positive energies. Similar to the penthouse (at 350 West 23rd Street) featured in my previous episode, the one at 50 Gramercy is a relatively new construction and its current occupants have lived there for less than three years. Reggie and I have come to understand that new developments often attract and absorb negative forces that accompany the building process: the stresses of financing, the convulsions of construction, the uncertainties of the marketplace in which the apartments are sold. Furthermore, the 50 Gramercy project incorporates an old New York hotel that has hosted many unusual guests over the years, each of whom contributes his or her own energy to the bones of the building. All of these factors, if sufficiently negative, can create a pall that, on a certain level, deters buyers. Reggie identified this immediately and took measures to reverse its effects. He tries to help homes release negative energies from dark periods in their histories by assisting their owners and brokers in doing the same. In other words, if the people who live and pass through an apartment are able to expel their negative energies, so too will those energies be expelled from the apartment itself, resulting in a space that is brighter and more attractive to prospective buyers. Whether or not they believe in the veracity of Reggie’s methods, my sellers (and I) are always filled with confidence by his presence and charisma. And, after all, isn’t confidence  just another form of positive energy?

Now that the 2009 ship has sailed, there are numerous new development condominium projects that were bought in 2007 and 2008 that are now starting to close.  Many people are anxious to move into their new homes and (hopefully) meet their new neighbors.

Did you know that it is legally permissible for the sponsor to retain board control in a new development even if only 1 unit remains unsold, as long as it was fully disclosed both in the bylaws and in the special risks section of the offering plan?  The rules change for a conversion that requires a sponsor to give up control of the board after five years or upon the sale of at least 50 percent of the units, whichever occurs first. This is according to New York Real Estate attorney Mark Axinn.

However, should the sponsor give up control of the board of managers, the sponsor cannot designate or nominate the majority of the managers. In this case, the sponsor is not prevented from voting with its percentage of common interest for unit owners who have similar views, as long as the unit owners are not on the sponsor’s payroll or otherwise given money by the sponsor.

That sentiment is evident among the foreign buyers who doled out currency in many hues to snap up one-third of all condominiums sold in New York since 2006.  3 weeks ago at my open house for a $600,000 one-bedroom, a French visitor, shopping bags in tow, told me that while my exclusive was not quite what she was looking for, she wanted me to find her “three to four” similar apartments as rental investments.

Their stories are varied—the proverbial Euro-zone buyer, like the one I described, leveraging a 20-percent-plus increase in buying power due to the currency cycle; the South Korean taking advantage of relaxed domestic restrictions on foreign real-estate investments; the Russian tycoon seeking a residence worthy of his/her standing in society; the Middle-Easterner parking money in a stable economy.  In unison, they speak volumes about the intrinsic value they see in New York real estate, and help sustain a local market with its home-grown challenges.  Whether they are seeking a pied-à-terre or a rental investment, foreign buyers have specific needs that are not always well-understood.

First, a condo or condop tends to be a superior option to a co-op.  Second, buyers should now be prepared to pay more than 35% in down payment, seek financing outside the U.S., or eschew financing altogether.   Third, buyers need to be educated on tax-adjusted cash-flow, estate issues (especially for those who have children), and general liability-shielding.  Putting a team together with an experienced broker, a knowledgeable real estate and/or estate attorney, an accountant, and a capable mortgage professional, and the good times shall continue to roll awhile longer.

Contact Arthur Hung.