02/28/2020
EVERYTHING YOU NEED TO KNOW BEFORE YOU BUY
APARTMENT IN NY. PART 1
Buying a home in New York City is unlike purchasing a place anywhere else. Expensive? Competitive? Complicated? Absolutely! But reward is epic! Here are the steps to NYC homeownership.
How Much Does an Apartment in NYC Really Cost?
When preparing to buy a home in NYC, it’s important to know the most common types and their relative prices.
• Co-ops are most common and typically found in buildings constructed before 1980. Require buyers to interview with the co-op board, and they come with stricter rules around financing and ownership. Note: Co-op owners don’t own real property, but rather shares of the corporation that owns the building.
• Condos: Condos are also popular. But, unlike co-op owners, condo owners actually own their apartments outright. Condos are often more expensive to comparably sized co-ops
• Single-Family Homes: These include townhouses and freestanding abodes. Townhouses, especially in Manhattan and “brownstone Brooklyn” come with tons of cache and are very expensive.
Unexpected Fees When Buying a Home
In addition to a property’s listing price, you should factor in the closing costs which usually add another 3% to 5.5% to the purchase price. There are also co-op maintenance fees or condo common charges and property taxes
Is There a Best, or Cheapest, Time to Buy a Property?
Understanding the flows of the real estate market might benefit your bank account. Inventory in NYC typically peaks between April and June and then bubbles up again in October.
First-Time Home Buyer Down Payment Tips
Before setting your budget, it’s crucial to assess your financial health.
• How much do you have saved up? As a rule of thumb, you should have three to six months of living expenses saved as a backup. It will help you cover your housing costs and other basic needs if you face an unexpected medical event, a sudden change in employment, or the need for a significant home repair.
• What’s your credit score? It’s crucial to check your credit score because that’s what lenders use to determine your loan amount and interest rate.
What’s the Average Down Payment on a Home in NYC?
The smaller your down payment, the larger your monthly payments will be — and vice versa. In New York City, the standard down payment amount is 20%. There are, however, financial assistance programs for first-time buyers that can reduce your down payment.
What’s the Best Type of Mortgage Loan for You?
There are many different kinds of mortgage loans and lenders out there. We recommend familiarizing yourself with the differences between getting a mortgage from a mortgage broker or a commercial bank. There are also several mortgage assistance programs for a first-time home buyer which can help you cover the cost of a down payment.
Get Preapproved Before You Start Shopping
You don’t have to lock in your mortgage before beginning your home search, but you should get preapproved for a loan. It gives you a good idea of how much you can afford, and it tells sellers that you’re serious.
How to Pick the Best NYC Neighborhood for You
To kick-start your search, consider transportation options. Then think about the neighborhood’s safety, access to green space and public school options if kids are part of the equation. Walk the neighborhood’s main commercial avenues to get a sense of the local shops and restaurants. Test out what the commute will be like and spend a night out in the neighborhood to see what it’s like after dark.
Who Do You Need to Hire?
Legally, you don’t need to hire an agent when you buy a place in NYC, but it doesn’t hurt. First-time buyers, especially, can benefit from hiring a local agent. An agent’s job is to provide undivided loyalty, shepherd you through the entire process, and negotiate on your behalf. What’s more, their services are entirely free
How First Time Home Buyers in NYC Can Save Big
Before starting your apartment search, consider these tips for cutting costs
• Think about your must-haves versus your nice-to-haves.
• Opt to live five blocks removed from the action. The closer you live to a neighborhood’s action, the more you’ll pay.
• Search for homes with recent price cuts. An excellent sign of a motivated seller.
So You’ve Found the Perfect Place to Buy?
Before putting in an offer, it’s important to be thoughtful about your decision.
• Talk to the neighbors. Talking to your potential neighbors may reveal insight about what life is really like in the building or on the block.
• Visit the apartment at night. If you work a traditional 9-to-5, you’ll likely spend most of your time at the apartment in the evening, so it’s crucial to get a feel for the place after the sun sets.
• Consider your future needs. The apartment might suit your needs now, but what about in the future?
