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Buying a home is one of the most significant purchases you’ll ever make, so it’s important to know the ins and outs of becoming a first-time homebuyer in New York. From the best boroughs to the ideal properties and the prices involved, The Empire State offers a ton of options for first timers in the market for a new home. To take a bit of the confusion out of the home buying equation, here is a brief guide to buying real estate in New York.

Venturing into The Big Apple to buy your first city apartment can be a daunting idea. However, the advantages of owning a piece of New York far outweigh the challenges of coming to grips with the city’s real estate quirks and idiosyncrasies.

The following tips are your armament as you head into the NYC real estate battlefield:

Get to Know the City

Getting to know an area before you commit to buy an apartment is always a good idea, and this is especially important when moving to New York City for the first time. Each borough and neighborhood has a different mix of cultures, characteristics, and subtle nuances that make each of them unique.

If possible, spend some time in your desired area and speak to the residents. Find out the prices available apartments are going for, what the residents are like, and their feelings about the neighborhood.

Choosing the Right Borough

Manhattan, Queens, Brooklyn, the Bronx, or Staten Island? That’s right, choosing the right neighborhood for you is the first step in owning a home. Although it seems a bit daunting, making a list of the pros and cons of each neighborhood will help you narrow your search.

Break your list into columns that include everything from price and location to population and taxes. Think about what defines each borough as well. Manhattan is a metropolis, whereas Staten Island offers a suburban feel. Once you tally the pros and cons and narrow your search to one or two spots, it’s time to figure out your budget.

Taking Care of the Preliminaries

Before you go searching for your first dream home, you have to figure out exactly how much you can afford. If you are taking the home loan approach, then you’ll need to check your credit score. Your credit score has everything to do with the type of loan you’ll qualify for.

Once you know your score, it’s time to calculate how much you can afford. This is where being honest with yourself counts. In other words, be as realistic as possible with your finances, and don’t forget to include the down payment, closing costs, and other fees associated with the purchase.

Condo or Co-op

Condos and co-ops are very different forms of housing ownership. Each offers its own set of benefits and drawbacks.  What may be a buyer’s perfect apartment in a building with a condominium ownership structure may not be worth purchasing if it were a co-op.  Likewise, a co-op offers owners levers of control over the future of the building that many buyers insist on.

The financial structure of the two types of buildings differs in substantial ways.  A co-op has an ownership structure closer to that of a public corporation than a typical apartment building.  Instead of owning a particular apartment, like in a condominium, those that live in a co-op own a share of the company that owns the building.  The more valuable the apartment, the larger the percentage of the company the resident owns.

While most buildings being built in New York City today are condos, 85% of all the apartments available for purchase are still cooperatively owned.  While some analysts predicted years ago that co-ops would soon begin restructurings themselves as a condominium, the bylaws of most cooperatives require a supermajority, or 66%, vote of approval by the owners to allow this to happen.  Many even need a super-super majority, or 80% vote.  This explains why recent history has made it clear: Co-ops are here to stay for the foreseeable future.

So, which type of housing is right for which type of buyer?

Generally speaking, co-ops offer one significant advantage for some buyers: A more thorough screening process for potential buyers.  The screening process is an arduous task for potential buyers  Often just the interview with the board of directors will take up significant amounts of time, which is to say nothing of the various credit requirements to be met and paperwork to be completed.

However, once a buyer moves into the co-op, the social makeup of their neighbors tends to be much more stable and homogeneous. This can be either an advantage or a disadvantage, depending on what the buyer is looking for.  For those looking for a place to retire or to raise a family, the knowledge that the social and physical environment of your building will not change for a long time offers a great feeling of security.

These same tight screening processes and regulations that make most co-ops a reliable, unchanging environment, however, also make them more difficult to sell and often quite impossible to sublet.  This is particularly disadvantageous for buyers that do not plan on living in one place for an extended amount of time.

Indeed, the co-ops’ regulations give condos a relative value increase on the market:  Investors and more mobile homeowners prefer condos. This additional demand for a much smaller supply makes condos the logical choice for most buyers.  A recent study suggested that were the average co-op to convert to a condominium ownership structure, an average net gain in value of $15,500 would be added to each unit.

Finding a Buyer’s Agent

Buying a home without representation and the help of a real estate buyers agent is doing yourself an injustice, so it’s important to find a broker that specializes in buyers. Buyers agents can help with everything, from finding your dream home and facilitating the sale to mortgage pre-approval, negotiations and contract finalization, and every home buying need in between.

Get One Cheap

New York apartments are not typically considered as cheap. If you are willing to make certain sacrifices, however, you will be able to land yourself a nice bargain.

  • Look at bigger apartment buildings – Buildings with around 30 apartments are much more likely to be rent-stabilized and more financially appealing as a result.
  • Search in the winter – There is less activity in the market during the winter months, and as a result, landlords are generally willing to deal with any vacant apartments they have.
  • Help out with the work – Some landlords have properties on their list that could use a little work. Offer to share the costs of repairs, and you can likely negotiate heavily on the price.
  • Check lesser talked about areas – Less publicized areas which are not as in demand can have nice cheap apartments which landlords are desperate to offload.

Save Some Room in Your Budget

There is no such thing as a perfect apartment. However, once you have secured the keys for one that closely matches your expectations you will have the freedom to perfect it. This is one reason it helps to have a budget that will allow you to make the purchase and have some funds left over for necessary renovations.

Even brand new homes can require some post-purchase spending. Factor in decorating or possible repair costs so as not to find yourself in a situation where you have to leave your new apartment to deteriorate.

Buying your first apartment in NYC might be one of the most challenging things you have to face thus far in life, but it can also be one of the most rewarding. In the end, it is not as daunting as you think.

Making an Offer

One of the most exciting and nerve-racking steps of buying your first home is making an offer. Counter offers aren’t uncommon in the home buying game, so it’s important to prepare for a second and sometimes third offer that’s within your budget.

If you choose to go with a real estate agent, they will handle all the negotiations and even make counteroffer suggestions. With a market as competitive as New York, multiple offers from different parties is a large possibility, so keep this in mind when it comes to your offer.

Getting the Right Mortgage

Congratulations! Once your offer is accepted, it’s time to find the right mortgage for your needs. Whether you choose an adjustable or fixed-rate mortgage, many tax advantages are specific to first time home buyers in New York, so it’s important to weigh all of your financial options before choosing a home loan.

When you’re ready to call yourself a homeowner, use the information above to help you along the way.

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