A Manhattan real estate question: What can you buy for $12,745?

As I write, $12,745--that's twelve thousand, seven hundred and forty five dollars--will buy you exactly one square foot of a three bedroom, five and a half bath condo on the upper west side.

If you want all 3,923 square feet, you'll have to come up with $50,000,000.

True, the apartment is on a very, very VERY high floor, and the views are spectacular.  You can almost see the curvature of the earth.

And the master bedroom does have its own sitting room, and there's a staff room and a breakfast room and a gallery (what you call a hall when it's seven feet wide).

But there's no terrace or balcony, or even a fireplace, let alone a pool or a tennis court or a helipad or a place to exercise polo ponies. 

Look down at the floor.  Measure one square foot of it.  Now imagine that square foot being worth $12,745.

A development in the village has just come to market with average prices per square foot of around $4,500.  That's a long way south of $12,745, but it's still a lot of money for a square foot of floor.  An apartment in another development, this one in Noho, is priced at more than $5,000 psf, again, with no outdoor space or fireplace.

Developers must be supremely confident that these will sell, and quickly, because they keep building more of them.  And this is no easy or inexpensive process.

First, they may have to pay as much as $800 to $1,000 per buildable square foot.  That's square footage that right now exists only as air, up in the sky.  (The mere idea of paying a thousand dollars for a square foot of air makes me whimper.)  Then they have to carry the financing for these projects for three to five years before they see any income.

They have to build out the spaces--not cheap when everything has to be top of the line, and this involves architects (preferably the kind known as starchitects), expediters, contractors and construction crews.  And then they have to mount expensive ad campaigns, put together expensive sales offices and expect to pay commissions.

All of this takes money.  A lot of money.  The profit margins are far from huge.  And the risk factor is significant.  What if, somewhere along the way, there's a fire or a flood?  Or another economic disaster?

But right now there are any number of these vastly expensive projects in the pipeline, each of them taller, shinier and more ambitious than the last.

Here's the weird part:

Jonathan Miller, president and CEO of the semi-eponymous and pre-eminent appraisal firm Miller Samuel, explains "absorption" as the number of months to sell all listing inventory at the annual pace of sales activity.*

That is, if there are 100 properties on the market and there have been an average of ten sales a month for the past year, then it should take about ten months to sell all those properties.  In this case, there's a ten month supply of inventory.

More than nine months of inventory is a buyers' market.  Six to nine months is a balanced market, and less than six months is a sellers' market.

As per Mr. Miller's blog Matrix (http://matrix.millersamuel.com), there is currently no more than a five month supply of inventory of properties priced below $5,000,000.  In some categories below this price point, there is a supply of only two and a half months. 

Buyers are starved for property, and there's next to nothing available for less than $5,000,000.

But in the $5,000,000 to $10,000,000 range there's a seven and a half month supply of co-ops (a balanced market) and a twelve month supply of condos (definitely a buyers' market).  The picture above $10,000,000 is disastrous for sellers, with a 16.4 month inventory of co-ops and a 27.9 month--well over two years--inventory of condos.

There is something wrong with this picture.  I asked the expert to explain.

Mr. Miller kindly responded to my query as follows:  "Developers are largely forced to target the high end of the market because of the cost of land and construction. The math doesn’t work at the lower price points.

"If the high end softens then land prices slide and the math begins to work again. Rising housing prices tip more inventory in the market as people have more equity to participate although that has not happened in Manhattan yet."

I am waiting.  So are a whole lot of would-be buyers.

*http://www.millersamuel.com/blog/manhattan-absorption-august-2013-dont-blink-or-its-gone-except-trophies/30103

Sure, a picture is worth a thousand words. But how many of those words are the truth?

Many years ago, when dinosaurs walked the earth and I first got into real estate, there were no pictures. 

Oh, maybe if the property was really expensive--say, $800,000--you might have pictures taken for a brochure or an ad in the Luxury Homes and Estates section of the Sunday Times Magazine.  But by and large, brokers were dependent on words to sell properties. 

I remember "Glistening Diamond" as a headline advertising a cramped one-bedroom in a very ordinary 60s white-brick building.  "Exquisite," "Stunning," "Gorgeous" and "Fabulous" were all used and overused.

Every other apartment had "Old World Charm."  The ones that didn't have "Old World Charm" had "Soaring Ceilings."

Of course not all these descriptors were particularly apt.  But if you went to look at the apartment, you could dismiss the language as not an outright lie, just a difference of opinion.

Then our computers got smarter. Suddenly our most important medium for advertising was the web, and there were numerous pictures for every listing. 

New rules sprang up, written or unwritten.  At least one firm prohibited pictures of kitchens and bathrooms as being declasse.

The wide-angle lens became the photographers' and brokers' favorite.  It not only allowed a photographer to get much more of a room into a single shot, it also had the effect of making the room look enormous. 

(The wide-angle lens is a simple fact of life, and it's not going away.  Just remember that, as the back seats in the old car ads were not really twenty feet wide, the apartments you see photographed do not actually occupy a full acre.)

Then came a flood of conversion and new construction.  Suddenly apartments were being sold before they were actually built, off floorplans and what are called architectural renderings.  These became not just important, but crucial.

If a picture was worth a thousand words, it was now worth at least that many dollars.

Architectural rendering of 157 West
57th Street (New York Daily News,
MARCHMADE)

Architectural renderings are careful and supposedly realistic representations of what a building will look like when it's done, made when the building is still just lines on a piece of paper. (There was an interesting article in the Times recently about them.*)  

They're important not only to attract buyers but also to create good will among the building's neighbors.  Nobody wants an eyesore sprouting on their block, especially if they're going to have to live through years of the pounding of the jackhammers, the roaring and clanking of the steam shovels, the dust, and the suddenly homeless rats wandering through the neighborhood. 

But if the neighbors can be convinced that the building will be beautiful, will make the block beautiful, and will raise their property values, the noise gets a lot quieter and the rats a lot cuter.

And the better the pictures look, the more likely the developer is to get the (lately astronomical) prices for properties that are, at this point, literally castles in the air. 

Actual photograph of 157 West 57th Street
(www.newyorkyimby.com)

The renderings don't exactly lie, but they might bend the truth a bit.  A lot depends on the angle the artist chooses.

Viewed from below, the building can look tall and elegant.  Viewed straight on or from a helicopter, it can look intrusive and ugly.  Those who don't want the building built for whatever reason will find a way to make it look like a blot on the landscape.

Developers aren't the only people who use art to make properties more appealing.

Today there is something called virtual staging, which can add furniture, paintings, rugs, whatever you want, to an empty apartment.  The things are only there in the pictures, but they should give you an idea of what the place will look like when people live in it. 

Virtual staging is easily spotted and always looks phony to me, but it's a lot less expensive than renting furniture.  If it's made clear that it's virtual staging, not the real thing, it's helpful as a sales tool.  And it doesn't change anything about the actual space, just what's in it.

PhotoShop is a different story.  Just as PhotoShop can make an ordinary person a stunner, it can make an apartment look like Versailles. 

A beat-up 80s parquet floor becomes shiny oak strips.  An ancient Formica kitchen counter becomes Cardoza limestone.  Cracked tile becomes gleaming marble.

This is lying.

It's also stupid.

Leaving aside the moral and ethical issues, it's an excellent way to lose a client. 

Anyone who gets interested enough in an apartment to go to see it because of PhotoShopped pictures is going to be immediately disillusioned, angry because of the wasted time, and completely turned off to the property as soon as he sees the shabby truth.

Staging an apartment is one thing--rearranging furniture, getting rid of clutter, making minor repairs, hanging pictures on the walls, etc., etc., etc.  This is perfectly legitimate and can add thousands or even hundreds of thousands to the selling price.

There's even one photographic trick that I find acceptable.  Photographers I work with take two pictures of rooms with windows.  The first picture is exposed for the room, and the second, taken from the exact same spot, is exposed for the window. 

The two images are then married, and you get a picture that shows the room as well as the view.  It's the real room and the real view.

Two photographs were combined here to show both the room
and the view in the same picture. And yes, a wide-angle lens
was used.(Tom Grimes photo)

As in any business, the vast majority of people in real estate are honest.  But also as in any business there are a few who are not.  Fortunately, there are some controls.

I read recently of a broker who not only used PhotoShop to make a property look significantly better than it was, but actually did this while being photographed for a tv show!  The Department of State launched an investigation into his business practice.

Good.

*http://www.nytimes.com/2013/08/27/nyregion/architects-renderings-as-a-weapon-in-real-estate.html?_r=0.

Turtle Bay: Long on charm. Short on turtles.

Some historians say Turtle Bay was given its name because of an abundance of turtles in the creek that ran into it. 

Others say it had nothing to do with turtles; it's a corruption of the Dutch word "deutel" which means "a bent blade," the bay's shape.

But by 1868 the bay had been entirely filled in by breweries, gasworks, slaughterhouses, cattle pens, coal yards and railroad piers.  Any turtles had long since fled in terror.


Turtle Bay when it was actually a bay (Wikipedia)

It was not until fifty years later, in 1918, that Charlotte Hunnewell Sorchan bought 11 houses on the south side of 49th Street and nine houses on the north side of 48th, and created the Turtle Bay Gardens in the space between them in the middle of the block.



There are 10 missions to the United States in Turtle Bay,
and 88 to the United Nations

Mrs. Sorchan is described in "Manhattan's Turtle Bay: Portrait of a Midtown Neighborhood" by Pamela Hanlon (Arcadia Publishing, 2008), as "a sophisticated, creative, energetic woman" who had traveled extensively in Europe and fallen in love with the idea of squares of houses with common gardens in the middle.

The gardens, which are truly gorgeous, are there today, but you can't see them unless you either have a house on one of those streets, or have a friend who has one, or are in the real estate business and get to visit when one comes on the market. 

But there are plenty of other charming little semi-secret places in Turtle Bay that are public, and I'll get to them in a minute.


Amster Yard.  What you see in the distance
is not more of the garden but a mirror
set into an arch that makes the garden
appear to go on forever.

The neighborhood was further improved in 1956, when the elevated railway, which had cast sooty shadows over Third Avenue since 1878, was taken down. 

Tall and elegant office buildings sprang up along the avenue, and apartment buildings replaced old tenements on the side streets.

Today the area, officially bordered by the East River and Lexington Avenue, and 43rd and 53rd streets, is full not only of beautiful old townhouses and newer apartment buildings, but also of charming little nooks and crannies that are all but invisible to the casual observer.


Beekman Place, both blocks.

Amster yard is a pretty little enclave reached by an unobtrusive gate on the north side of 49th Street just east of Third Avenue.  The gate is open, and behind it there's an alleyway that leads to a small garden.

I was afraid the garden was private, but none of the people sitting at the little tables told me to leave, and I later found out it is indeed open to the public.  While exploring, I was startled to see myself approaching.  Turns out the garden is made to look a lot deeper than it is because of a large mirror set into an arch at the end.



Footbridge to the East River

If you walk all the way to the eastern end of 51st Street, on the north side of the street where the sidewalk ends, you'll find another small and easily missed gate that opens to a stairway. 

Halfway down the stairs is a footbridge that will lead you to another set of stairs leading down to park benches where a few people are relaxing by the river.

If you don't walk across the footbridge but continue the rest of the way down the first set of stairs, you'll get to Peter Detmold Park, another one of those places nobody seems to know about. 


Peter Detmold Park, deserted on  a
summer afternoon. 

But before you descend, take a short stroll along the two blocks that comprise Beekman Place, possibly the most beautiful two blocks in the city.  Auntie Mame lived on Beekman Place. So did another fictional character, Robert Redford's, in "The Way We Were."

In real life, it was the address of Huntington Hartford, Aly Khan and various Rockefellers.

The gardens and lawns of United Nations Plaza, 42nd to 48th, First Avenue to the river, are temporarily off limits due to construction, which, a guard told me, is to be completed in 2015.  When that happens, they will once again be a lovely place for a stroll.

So what does it cost to live in Turtle Bay?

What's behind those beautiful
apartment buildings on Beekman Place.

The average rent for a two bedroom, two bath apartment is $7,250.  For a one-bedroom it's about $3,425.

If you prefer to own, the average price for a two bedroom, two bath condo is about $2,300,000.  For a co-op, it's significantly lower at $1,200,000, and you might even snag one for under a million.

One bedrooms run about $865,000 for a condo and $550,000 for a co-op.

It's a neighborhood definitely worth considering.  Hey, Katharine Hepburn, Leopold Stokowski, Maxwell Perkinds, Henry Luce, E.B. White (who wrote "Charlotte's Web" while living on 48th Street) and Irving Berlin all lived here.  Why shouldn't you?

Sutton Place: A beautiful but forgotten neighborhood where an apartment can be yours for a pittance.

Sutton Place is the lovely, quiet, six-block stretch of well-kept apartment buildings and a few townhouses on the East River above the FDR Drive, from 53rd to 59th Streets.  

Actually, Sutton Place only occupies the northernmost two blocks; from 53rd to 57th it's Sutton Place South. 


Sutton Place Park compass

A Google map shows the western border of the Sutton Place neighborhood as the west side of First Avenue.  Personally, I'd put the border just east of the east side of the Avenue, for reasons given below. 

There was a time years ago when Sutton Place was called, at least by one friend of mine "a two-poodle neighborhood.”  Some would have described it as ritzy. 

It was definitely one of the upscale, high end, expensive, desirable, however-you-want-to-put-it areas of the city.

There are three, count ‘em, three little parks in the area, two with beautiful views of the river and the Ed Koch Queensboro 59th Street Bridge (that's the one Simon and Garfunkel wrote the song about).

In one of those parks is the bench Woody Allen and Diane Keaton sat on admiring the view in Allen’s movie, “Manhattan.”


Diane and Woody sat here.

There’s little traffic as all of the numbered streets end in cul de sacs.  All the apartment buildings have doormen, so you never feel alone on the street. 

 

Only five of the buildings are condominiums and there are no rental buildings, which means that for the most part, people who live there own their homes and have a vested interest in maintaining their buildings and the neighborhood.

 

There are not many prewar buildings, but the postwars are early postwar, built in the 1950s, before the building code changed.  They have thicker walls, larger rooms, real dining rooms or at least separate dining areas, and a more spacious feeling in general.

But in spite of all it has to offer, instead of being expensive, Sutton Place offers some of the best bargains in the city.

There were four dogs enjoying this tiny park
when this picture was taken.

Average selling price for a two bedroom, two or two and a half bath apartment in the area in the last twelve months was just over $1,200,000.   

Average for most of Manhattan was about $1,650,000.

Why is Sutton Place so cheap?

 

Well, for one thing, it’s out of the mainstream.  From Sutton Place it’s a hike to the area west of Lexington in the 60s to low 90s, where the really pricey properties are. 

  

But there’s a perfectly good bus that runs along 57th Street straight to Bergdorf's, The Plaza, and all the other delights of Fifth Avenue.  You can always get a cab on First Avenue.  You could even walk to Fifth--it's only seven blocks.  Long blocks, but not that long.

 

There are nearby busses uptown and downtown.  And someday we may even ride the Second Avenue subway.  

 

Part of 60 Sutton Place South, built 1952 and
designed so that many of the apartments
have direct river views.

Frankly, First Avenue is not great unless you want to buy a lottery ticket or get your eyebrows threaded.  But Fresh Direct is only a few clicks away, and there are several good restaurants in the area. 

Aja, Amma, Bistro Vendome, Brick Lane Curry House, Chola, Club A Steak, and Dawat all get 21-25 points for food from Zagat.  All are east of Third Avenue and within a block or two of the Google-defined Sutton Place area. (I could go on through the alphabet, but space prohibits.  Trust me, there are plenty more.)

 

Another reason Sutton Place is currently undervalued might be that many of the people who live there have lived there for a VERY long time. 

 

It is true that one building has, or had recently, a sign on the concierge desk that says a defibrillator is available in a closet off the lobby. 

 

1 Sutton Place

When people leave, they generally go either to Florida or to heaven, and some of the apartments that come on the market still look much as they did fifty years ago, wall-to-wall shag carpets, Harvest Gold appliances and all. 

 

But under that wall-to-wall is a hardwood floor that’s been protected for all those years. 

 

Any cost of renovation is more than made up for by the low selling prices, and more and more young people are moving into the neighborhood.

You could be among them.

 

Why your broker appears to have been demoted.

The Department of State here in New York has ruled that licensed real estate brokers and salespeople can no longer have titles other than licensed real estate broker or salesperson.

The Department considered them false and misleading advertising, as they were honorifics. We are independent contractors and have no legal status in the company we're affiliated with.

While this is true, the titles were not meaningless. 

Back when we had them, our titles were determined by how much real estate we sold in a given period.

Brokers (those who didn't have a broker's license were not eligible for titles) who sold tons and tons--and there was a given minimum that could be considered tons and tons--were given a title something like "Executive Vice President," or "Managing Director," or sometimes "Executive Vice President, Managing Director."

Brokers who merely sold tons (there was a minimum for that, too) were called "Senior Vice President." Those who just sold a lot (again, more than a given minimum) were "Vice Presidents." Sometimes lesser beings were given the title "Senior Associate," or some variation thereof.

So if a broker had a title, it was an indication of success.  Our clients knew by our titles that we were experienced and competent enough to have sold a significant amount of real estate. 

Our titles looked nice on our business cards and automatic signatures and in the advertising for properties we represented. They made us feel good, and they gave us some deserved extra credibility with clients. 

They have now been removed from everything from which they were removable, that is, our websites, our automatic signatures, our FaceBook business pages, our LinkedIn bios, our Twitter profiles, and on and on.

We're allowed to use our current business cards until we run out of them and have to order more, but the new ones can say no more and no less than either Licensed Associate Real Estate (or RE) Broker, or Licensed Real Estate (or RE) Salesperson, regardless of level of success. 

Appeals have been made, and nets have been widely cast to find some other brief way of showing a degree of expertise.  So far, to my mind at least, nothing really satisfactory has been found.

Sotheby's has come up with "Senior Global Real Estate Advisor" for some of its brokers which so far seems to be okay with the Department of State.  I'm not sure I'd be comfortable with the "Global" part.  Yes, of course I have access to information about residential real estate around the globe.  But it sounds a bit grandiose. 

Titles that show a somewhat more modest (and non-corporate) sphere of influence, such as "Viscount"  or "Senator" are not acceptable to the DOS either. I thought "Aunt" or maybe "Grandma" would give me a pleasant, familial yet authoritative appeal, but they both got a resounding nope, no way.

We'll see what other titles, if any, show up on websites.

So, bottom line, if your broker has been stripped of his title, it doesn't mean his company doesn't love him any more. And he's just as smart as he ever was. It just shows the state department's new rule is being obeyed.

 

Bushwick. Yes. Bushwick.

As I have said before, and will no doubt say again, if you want to know what the next hot location is, just think of a place where you wouldn't be caught dead.

Years ago, and very early in my career, somebody explained the difference between Little West 12th Street and regular West 12th Street.  "Everybody wants to be on West 12th.  Nobody wants to be on Little West 12th.  That's the meatpacking district."

I passed by it once.  Huge, bloody carcasses hung from hooks along the sidewalk,  which was cracked and broken.  It looked and smelled like a meatpacking district; that is, dreadful in every sense of the word.

Well, you'll still find bloody carcasses there, but now they're on plates.  And they're in "A large central lounge area...furnished with creamy leather banquettes and textured crocodile tiles.....Theatrical lights illuminate each table, while smoky mirrors allow patrons to catch a glimpse of the surroundings..."

This is how its website describes the STK steakhouse, at Ninth Avenue and, you guessed it, Little West 12th Street.  A porterhouse steak at STK, only slightly less rare than one on a hook in the same place twenty years ago, will set you back $64 (a side of green beans is an extra $12).  

But that's just one example.  Tribeca is another.  In the late 1980s there were about two residential buildings in Tribeca.  The lofts were cheap, but you couldn't sell them.  Nobody ever got divorced; they couldn't divide the community property.

Last February, a Tribeca loft sold for more than $19,000,000.  The average price per square foot at 101 Warren Street is close to $2,500.

In that not-so-distant past, SoHo was a forlorn part of Manhattan full of huge, dusty, high-ceilinged lofts with minimal plumbing and freight elevators that only moved when you pulled hard on a rope.  You legally had to be an artist to live there.*

"Never take a customer to SoHo who isn't an artist," I was told.  "Their lawyers will never let them buy.  And if their lawyer does let them buy, tell them to get another lawyer."

Today those same lawyers are living there, along with hedge fund managers and rock stars, in those same lofts.  Only now they have maximal plumbing in three or four enormous bathrooms with steam showers, Jacuzzis and who knows what else, plus kitchens with Sub-Zero refrigerators, Bosch dishwashers, vast islands spread with Pietra Cardoza limestone and key-locked passenger elevators.  Some have doormen.  Some have dog spas.

Farther uptown, Madison Square Park was once a combination dog run and drug market.  In the late evening, you could also find ladies of a certain ancient profession there.

Now it's home to Danny Meyer's Shake Shack, periodically changed high art, Wednesday night concerts with musicians you've actually heard of, and five ridiculously expensive condo buildings, in one of which a president's daughter lived for a while. 

The ladies of the evening have been replaced by dozens of nannies pushing their charges in Bugaboo strollers every morning.

Brooklyn might as well have been in Canada.  People came from there, but nobody ever went.

Which brings me, at last, to Bushwick.  I can remember hearing after the blackout of July, 1977, when riots occurred, that Bushwick had burned, and there pretty much was no more Bushwick.

Well, turns out there is, after all.  In this month's VOGUE (yes, VOGUE!) in an article about Brooklyn restaurants in general, Jeffrey Steingarten, VOGUE's restaurant critic, writes: "My other nomination for sheer gastronomic indulgence is Blanca, the most recent addition to...BUSHWICK [capitals mine]."

Steingarten says, of a strip of wagyu (who knew they had wagyu in Brooklyn, much less in Bushwick?) that, "It was the most tender, rich, juicy, flavorful mouthful of animal flesh I've ever eaten." 

He rhapsodizes over Blanca for five long paragraphs, about king crab legs ("sweetly perfect"), handmade pastas ("chewy and farinaceous") and a ragu of squab offal ("pungent, gamy").

VOGUE has been to Bushwick.  And loved it.

What's next?  Queens?  The South Bronx?

There was once a cartoon in The New Yorker which pictured a large person wearing a sweatshirt that said DKNJ.  The caption was, "Donna Karan's worst nightmare."  Could the next hot, edgy, hipster-populated place possibly be New freaking Jersey?

Well, anyway.  What are some fun facts about Bushwick besides the availability of a ragu of squab offal that's pungent and gamy? 

Bushwick is roughly rectangular in shape, slightly north of the geographical middle of Brooklyn, surrounded by Williamsburg, Ridgewood, Brownsville, East New York and Bedford-Stuyvesant.

At present, there are eight co-ops, seven condos, 15 single-family houses and 18 multi-family houses for sale in Bushwick, as listed in Streeteasy, most at prices that would barely buy a closet in today's Tribeca.  All of the co-ops are priced at less than $200,000.  Condos range from $279,000 to $799,000.  Houses, $258,000 to $2,100,000.

In July of 2011, Jake Mooney wrote in the New York Times that, "City statistics show major crimes in the precinct are down 75% since 1990 and about 20 percent since 2001. 

"Robberies in 2010 were down 16.5 percent from 2001, to 460 from 661, and felony assaults were down 30 percent in that period.  Burglaries dropped 8.2 percent in the decade to 479 from 522, but murders have held relatively steady since the late 1990s; there were 13 in 2010.

It will be very interesting to see what Bushwick is like just five years from now.  Williamsburg, formerly one of those places where you wouldn't be caught dead, is now so chic and trendy it hurts. 

If it can happen to Williamsburg, it can happen to Bushwick.

*Legally you still have to be an artist to live in Soho, but for many years, nobody paid much attention to that law.  Now it's becoming an issue.  See http://withconfidence.blogspot.com/2011/06/should-soho-and-nohos-artist.html

The mortgage contingency: What difference does it make to a seller whether you finance or pay cash? Plenty. Here's why.

You would expect that, with interest rates lower than they’ve been in living memory, even people worth trillions would finance.

If they finance, they can keep the money and invest it somewhere else.

But a surprising number of people are writing checks for their new homes.

We’re in a sellers’ market. There are many more buyers than there are properties. This is resulting in bidding wars. And in a bidding war, the offer that’s most likely to be accepted is one that doesn't have the word "financing" in it—even if it’s not the highest offer.

But the seller gets all the money at the closing whether the deal is financed or the buyer writes a check. So what's the appeal of all cash?

An all-cash deal involves the least risk to the seller. It also makes a co-op board very happy. And it allows a faster closing, as the parties don’t have to wait for the bank to provide the money. Banks are slow.

When you sign a contract to purchase a property, you accompany the contract with a check for 10% of the purchase price. If your offer, and the contract, is contingent on your ability to get financing and you can’t get it, the contract is void and you get back your 10%.

There are several reasons why you might not get financing, and not all of them have anything to do with you. The building might not meet the bank's requirements. Or the apartment might appraise at less than the contract price.

The deal could die and the seller could be back where he started, with nothing to show for the time lost except bills from the lawyer who drew up the contract.

There is a middle ground. If an all-cash offer isn't possible, the next best thing is a non-contingent offer.

If the contract is non-contingent and the bank doesn’t come through, you either have to pay cash for the apartment or lose your 10% deposit. You assume the risk, not the seller.

While this kind of offer is not as attractive as an all-cash offer, it’s better than one that’s contingent.

The risk to the buyer, however, is real.

Before the crash of 2008, banks had a happy-go-lucky attitude that resulted in large loans being made to anyone and everyone who walked in their doors.

We all know what this led to.

After the crash, banks rotated a full 180 degrees from their pre-crash liberality. For a while, nobody who actually needed a loan could get one.

Since that time, they've loosened up a bit. Somewhere along the line, they remembered that the way they make money is to lend it out and collect the interest.

But it's still not easy. Financing is by no means guaranteed, even if you believe you're well qualified.

There are ways to minimize the risk involved with a non-contingent contract.

First, before you do anything else including beginning your search for something to buy, consult a mortgage broker or a bank's loan officer.

He or she will analyze your financial situation, tell you how much you can afford to spend, and get you pre-approved by a bank for the appropriate loan.

Once you find the condo or co-op you want, have your mortgage broker or loan officer make sure the bank is willing to lend in the building you’ve chosen.

The bank’s willingness to lend in a given building depends on a number of factors: the ratio of owner-occupants to investors in the building, the number of apartments the sponsor still controls, the building’s financials, and also how many loans the bank has already made in the building. Most banks limit the amount of money they will lend in a given co-op or condo.

Third, try to get the apartment appraised BEFORE you sign the contract. This may mean that you have to pay for the appraisal yourself, but it will certainly minimize the risk.

And be aware that even if you’re only financing, say, half the purchase price, the property still has to appraise at the full purchase price or above.

Here’s a link to some excellent information about financing from curbed.com Financing 101: How much home can you afford?