Regardless of your price range, attractive, well-maintained properties never stay on the market long. You’ll want to develop a basic understanding of NYC’s real estate market essentials and tight inventory before you begin. Comprehensive knowledge of the home buying tips and considerations below will enable you to negotiate the best deal down the road. Being prepared reduces your risk of losing out to other bidders or overpaying.
Buying your first apartment is something you will never forget. For some, it is a stressful experience full of buyer’s remorse and pressure. However, that doesn’t have to be indicative of your experience. First-time home buyers have a lot of information to consider. It’s a task that can seem overwhelming, but with the proper advice and information, this could be one of the best experiences of your life.
Table of Contents
- Step 1: Questions to Answer Before Buying
- Step 2: Mortgage Pre-approval
- Step 3: Consider a Buyer’s agent
- Step 4: Choosing a Property
- Step 5: When making an offer
- Step 6: Negotiating
- Step 7: Mortgage Financing
- Step 8: Application Process
- Step 9: Homeowner’s Insurance
- Step 10: Home Inspection
- Step 11: Closing the Sale
- Step 12: Moving In
- Quick Steps to Buying (Video)
Step 1: Questions to Answer Before Buying
Based on our experience working with a wide range of homebuyers, we’ve come up with a list of items we believe everyone should ask themselves before getting serious about buying.
The questions are
- Are you prepared to maintain and repair an apartment or home?
- Are you willing to stay in the same apartment or home for at least five to seven years?
- Do you have a realistic idea of the type of apartment or home and amount of space you’ll need for the next five to seven years?
- Are you relatively sure your financial situation will remain stable or improve over the next several years?
- Are you a disciplined saver who can build up an account for emergency repairs or costs?
Since these are questions you should think about in detail, we encourage you to ponder them for a few days.
Step 2: Mortgage Pre-approval
Get Mortgage Pre-Approval or provide Proof of Funds if paying cash. Sellers are more willing to negotiate with buyers who have proven their ability to purchase a home.
You should shop around not only for the house or apartments but the mortgage as well. We recommend getting a mortgage pre-approval even before buying. Before you find the perfect home, it’s essential to have your finances in order. Most people pay a mortgage when purchasing real estate. It seems logical to find the place you’re interested in and then find the mortgage loan to match, but this is where many first-time buyers encounter issues.
Having the pre-approval sorted out beforehand will help you understand how much you can spend. The lender will look at your credit and other factors to tell you how much you are “pre-approved” for mortgage financing. Once you have your price range laid out, you can look for a home that’s priced well below your budget. You may be surprised how much you could afford. Finding the mortgage before seeing the apartment will make you a serious buyer when you pursue an offer on a property.
Be ready to make a decision. That means knowing what you want and what you can afford. That way, you can recognize and act on any great opportunity when you see it.
Step 3: Consider a Buyer’s agent
Talk to your buyer’s agent regularly to stay on top of new listings as soon as they hit the market. Also, make time to visit properties you are interested in promptly.
While some buyers are bogged down by paperwork when buying a home, Elika buyer’s agents make the process hassle-free. We understand why different properties appeal to different buyers and how to present you with condo apartments that fit your lifestyle. We make sure that our clients understand the purchasing timeline. By doing that, and keeping them informed every step of the way, we keep the process hassle-free.
Being one of the most culturally diverse cities in the world, it’s not hard to see why NYC is such an attractive place. Here you have hundreds of beautiful neighborhoods to choose from and all with their unique selling point. The food options are limitless, the entertainment never ends, and property values continue to remain relatively stable. Since our agents know these neighborhoods so well, you’ll have no trouble finding the right one for you. Whether it’s the initial search, negotiating, financing, or applying, we know our way around the block.
Great buyer’s representation from Elika is far more than a gentle touch. It’s a vital tool that can help buyers deal with stress and get the best deal possible. Without proper representation, the buying process in NYC can months or even years. With an exclusive buyer’s agent by your side, you can expect a far shorter and more comfortable experience.
Step 4: Choosing a Property
A lot goes into deciding on what property is right for you. First off, you’ll have to decide whether or not to restrict your search to one particular type of property. Do you go with just co-ops, or do you include condos in the search? Along with deciding whether the property is right for you, you’ll also have to think about the neighborhood. Does it fit your lifestyle? Is it easy to get around from there? Does it have all the services and amenities that you desire? Dozens of homes are, consider which is why having a buyer’s agent is so essential in narrowing down your choices.
- Choose your preferred neighborhood(s).
- Prioritize the facilities and services you would like in your area. (schools, transportation, fitness center)
- How much space would you want and need in your new home? Which type of space? (dining room, closet)
- Is your priority the neighborhood or size of an apartment?
- Would you prefer to buy a ‘fixer-upper or a ‘move-in-ready’ home?
- How much importance do you place on home value appreciation?
- Do you value neighborhood stability?
- Would a condo or coop be a possible choice?
- Which features and amenities (essential and luxury) would you expect in your home or building?
Be willing to compromise. Whether you currently reside in New York or you’re relocating from another state, most buyers experience a bit of sticker shock when they realize they usually modest size of condo or coop units they can afford. For this reason, compromise is an integral part of the home-buying process in New York City. The question is, just how much should you compromise?
Buy what you need
You don’t want to overextend yourself by buying too big. That said, you also don’t want to be forced to sell down the road because you didn’t allow room for growth. In a buyer’s market, you should accept a place that satisfies 90% or more of your wish list. In a seller’s market, you should buy if a home has 80% or more of what you want. When you make out a list of pros and cons for the places you view, consider including a column for compromises, so you stay flexible in your demands.
On the other hand, depending on market sentiment, it may also be worth paying a reasonable premium to win the property. For most buyers, their home is their most significant investment. Whatever you choose to do, make sure your investment is a sound one.
Don’t Be Afraid to Shop Around
A lot of first-time homebuyers fall into the pattern of limiting their options. Just because you liked the first place you saw, that doesn’t mean it’s the only one you should consider. Whether it’s price, location, or upgrades, decide what is most important to you and your way of life.
When buying a home, the price is a significant factor for most people, but remember it’s not the only thing to keep in mind. As the economy changes, you may find that the kind of home you’re looking for is closer to your price range than you thought. Check the price range of similar apartments or houses in the area you’re considering.
When working with an ELIKA buyer’s agent
As a member of the Real Estate Board of New York (REBNY), we have access to all available NYC real estate listings. Our agents will work to find the right properties for you and keep you updated at all times. We don’t like to waste our client’s time, so we make sure to check up on all potential properties first. Unless it matches what our client is looking for, we won’t waste their time with a viewing. Once an apartment located, that we feel you would be happy with, with your confirmation, then schedule viewings for your convenience. We’ll then provide our clients with all the facts on the property, such as investment potential, market value, and more.
Include Taxes and Insurance
When you’re buying your own home, you are responsible for every dime that goes into it. Insurance included and (the more overlooked) taxes. For a condo or co-op, there are also standard common charges monthly or maintenance fees that many buyers don’t think about enough during the search.
If you’re considering buy vs. rent, you will need to figure out your monthly costs after you add taxes and insurance. The down-payment, closing costs, and property taxes are sometimes afterthoughts for new home buyers, but they can increase your total payment to nearly twice the amount. If you’re not sure of your full-price range in this area, using an affordability calculator will help.
When buying a co-op or condo, you must consider some extra fees. You will be responsible for paying a share of costs for running the entire building, that being a maintenance fee or standard monthly common charges. It’s a small percentage of your overall payment, but it can raise the total substantially.
It’s essential to consider these fees when narrowing down your apartment search. If you keep your options open and remember the cost, you will not only find the place of your dreams but the most practical one. Buying the first house is a beautiful journey. Enjoy the experience because you only get one shot at your first time.
Step 5: When making an offer
Even in a competitive market, protect your interests by insisting on proper inspections. Before you make an offer, do due diligence on the property with your agent. Get sales data on the property you are interested in, as well as on comparable properties in the neighborhood. Develop a three-tiered price target:
The lowest price you could reasonably offer without offending the seller, the offer price that you and your agent think the seller most likely to accept, and the maximum sales price you’re willing to pay for the property. Make your offer based on the lower price target and stick to your limits if the negotiation takes the sales price beyond that limit.
When working with a buyer’s agent, they help you estimate the fair value of a particular New York City apartment by researching comparative market comps. Agents will check out similar neighborhood properties, determine market value, and get you a fair price. Hesitate, and you could lose the deal to another buyer.
Purchase Offer Components
- Price – a pre-approved amount that meets your approval, and you are capable of paying.
- Terms – include financial and timing in the offer.
- Contingencies – clauses allow you to escape the deal under certain circumstances ( a problem that did not exist previously or of which you were not aware at the time of the contract, also perhaps a mortgage contingency should the lender not approve such a property, etc.). Contingencies specify any event that must occur for the contract of sale to be formed and enforceable.
Step 6: Negotiating
In most cases, the negotiating process will go something like this. After deciding on a reasonable offer price, you’ll make your bid, usually accompanied by several contingencies. These are terms of the deal that will protect you against ending up with a lemon. They may also include a request for certain repairs that the seller must fix before the deal can go forward. The seller may come back with a counteroffer, leading to a bit of back and forth that can go on for several days or weeks. An Elika buyer’s agent will give you advice on the best offer to make and help move things along the negotiations get stuck. Thanks to our agents performing a comparable market analysis, you’ll know approximately what the property is worth and what the right offer should be.
We’ll also make sure that any counteroffers are fair. Because we know NYC real estate so well and know the fair value of any one apartment, you can be confident with our advice. We only provide buyer’s representation, and we have a strong incentive to help you get the best possible deal on your new property. Once the negotiations are complete and both parties have signed an agreement, we’ll help you through the rest. Buying a home means dealing with a lot of paperwork, and our agents will help you navigate the red tape and get you organized.
Step 7: Mortgage Financing
For most people, buying a home means getting a mortgage. Mortgage applications tend to be the most challenging step in the buying process. You’ll need to consider what lender to choose, the type of mortgage, and compare them for the best deal. A point when a lot of buyers undergo a great deal of stress and confusion. But with an experienced buyer’s agent at your side, that needn’t be the case. We’ll help you choose the right lender, give advice on the best mortgage for you, and explain anything in question. We can even help you start this process while negotiations are still going on. Meaningless time to complete the purchase and more time in your new home.
When financing ask for a mortgage contingency
If financing, ask for a mortgage contingency clause, but if you’re in a competitive bidding situation, consider dropping it. It may give you an advantage with the seller. Don’t place restrictions on the sale, such as a delayed closing date, or a contingency clause on the sale of your existing home. If your home hasn’t sold, talk to your lender about a bridge loan to cover both mortgages for a short period.
Be accommodating to the seller by offering him the opportunity to choose a closing date at his convenience. Some sellers haven’t lined up a new place to live by the time their house sells. When it comes time to make an offer, don’t panic if the seller rejects your first offer, or if it turns out, you’re in a very competitive market. Buyers tempted to buy a property at any price; if they lost a bidding war in the past. While you want to make your offer as attractive as possible, don’t work against your interests.
Step 8: Application Process
New York City buyers usually face a lengthy application process unless purchasing in a New Development, as each cooperative’s Board of Directors decides whether to approve a new building resident. The Board may deny a buyer who has insufficient proof of income or for other reasons, depending on the building’s rules.
Filling out an application correctly, is often a time-consuming process, especially if you’re not sure what to include. However, approval from a Board is one of the final steps that buyers need to take to purchase properties in New York City successfully. As with all other steps in the purchasing process, a real estate agent can help.
You can plan better for an application if you know what to expect. That’s precisely what Elika Associates buyer’s agents will do by keeping you informed so you can apply successfully. You’ll need to include two years of tax returns, personal and professional information, proof of financing, a signed purchase contract, and other detailed financial documents. Depending on the policies of the Board of Directors, you may have to submit further documents.
We will help you assemble an attractive application package and submit it to the building’s managing agent. Co-op applicants will also need to perform an in-person interview with the Board of Directors. Elika buyer’s agents will help you prepare for your co-op interview by eliminating much of the associated stress and improving the chances of a fast, successful purchase.
Step 9: Homeowner’s Insurance
New buyers must purchase a homeowner’s insurance policy. This coverage protects homeowners against loss or damage to property as well as liability if someone gets hurt in your home.
- Keep control of your finances and credit
- Stay in contact with your real estate agent and lender.
- Return phone calls and complete documents promptly.
- Contact your agent or attorney at least once or twice a week.
- Verify with your lender that the mortgage funding steps have reached completion
- Do a final walk-through of the home with your real estate buyer’s agent.
- Before closing, confirm with your attorney, home insurance official, and lender that the settlement statement, certified funds, and evidence of insurance are in place.
Step 10: Home Inspection
When you find your ideal New York City apartment, it can be hard to see beyond the superb interior design or spacious rooms. Potential homebuyers must dig deeper to discover possible hidden issues such as structural damage (water damage, bad construction, etc.) A property inspector can help find those issues for you.
Homebuyers should attend the inspection to gain a better understanding of the home. Just in case the inspector finds minor and significant home repairs. Small issues can be fixed easily – even delayed for a period. Essential problems, however, require calling in a specialist to examine the effect. A professional can advise whether you should fix the problem or walk away from the deal.
Step 11: Closing the Sale
When you have an accepted offer, mortgage commitment, and have completed a home inspection and a walk-through, you are getting closer to moving into your dream home. Just a few pre-closing duties will ensure that you do not risk your closing date or mortgage.
Step 12: Moving In
Your dream home awaits its new owners. Hire a reputable moving company to help you move into your new apartment. Congratulations!
Are you ready to purchase an NYC apartment and become a homeowner? By this point, you’ve doubtlessly made some significant changes in your life and taken a long, hard look at your finances.
Quick Steps to Buying (Video)
- Contact a Bank and get pre-qualified for a mortgage, if financing
- Team up with a Buyer’s Agent and a real estate attorney to represent your interests
- Determine what you are looking for and build a wish list, choose neighborhoods and apartment types. Your buyer’s agent will shortlist the best available properties
- Once you find the ideal apartment, ask your buyer’s agent to perform a comparative market analysis to estimate its fair market value
- Ask your buyer’s agent to submit a written offer to formalize your intention to buy
- Upon receipt of a counteroffer, your buyer’s agent will negotiate for you until an agreement is reached and offer accepted.
- Next, Your Buyers agent and attorney will receive a deal sheet from the seller’s agent
- After that, your attorney will negotiate the contract of sale, perform due diligence on the property, review the building’s financials and board minutes as well as outstanding liens, if any. This process generally takes 5/7 business days
- It is now time to sign the contract and pay the deposit, which is usually 10%-20% of the sale price. Once the seller has countersigned, you are now officially in a binding agreement.
- Next, your buyer’s agent will prepare and submit the purchase application to the co-op or condominium Board
- Following that, you will be scheduled to attend an interview in the case of a co-op. Or Schedule and prepare for closing in case of a condo.
- Finally, take a final walk-through with your buyer’s agent on the day of closing, proceed to close to finalize and get the keys to your dream home.
Remember to buy the right home for the right price.