For many New Yorkers, cultural diversity, job opportunities, and endless entertainment options are what keep so many of them staying. But with all that also comes high real estate and rental prices. For those who can’t hack it anymore but wish to remain with a job, family or the city itself, a move to the outer suburbs could be the answer.
Those in need of more space, lower housing prices or more quiet time at night will find all that and more in the suburbs. Whatever your reasons are for leaving the city for the burbs, there are a few things you first need to consider.
Decide what NYC suburb is right for you
The good news about any move from the city to the outer suburbs is that you have a lot of choices. Examine the reasons for why it is you’re moving, and you’ll know then what you’re looking for. If you’re planning on still working in the city, consider your commuting time and access to public transport. Do you still want the hustle and bustle of city life? Then find a town where you have more things to do. If it’s peace and quiet you’re after, moving further afield to a smaller town is worth considering. The bottom line is, choose a location that suits both your personality and job requirements.
Research the tax situation as there can be variations from town to town
Escaping its steep taxes is undoubtedly a big reason for moving out of the city. But just know that the tax burden varies a great deal from one area to another and in some places can be quite high. In general, housing prices tend to lower the further you are from the city. The downside to this though is that property taxes tend to be higher. For example, Westchester and parts of New Jersey have notoriously high property taxes.
It largely depends on the infrastructure and size of a town. For instance, Armonk has many businesses so the corporate tax offsets the property tax. As you evaluate the prices and location, don’t overlook the property taxes or you could be in for a nasty shock.
Closing costs will be lower outside NYC
You’ll be pleased to know that closing costs are substantially lower in New York State outside of NYC’s five boroughs. The reason being that while still subject to the NYS mortgage recording tax, you’ll be exempt from the NYC mortgage recording tax. This means big savings as your mortgage recording tax will go from 1.925% to 0.5% on mortgage amounts above $500,000.
You may even be able to completely forgo the mortgage recording tax depending on which suburb you move to. For instance, Connecticut does not impose a state mortgage recording tax. In addition, those making purchases of $1,000,000 or more outside the city limits can avoid the mansion tax.
You’ll have fewer financing requirements
If you’re already excited at the thought of lower closing costs, the news that you’ll also face fewer financing requirements may just seal the deal on a move to the suburbs. Mortgage approval takes far longer in the city thanks to the need for apartment appraisal and building approval. Not forgetting the board approval process either if you’re buying a co-op.
For a single-family house, so long as it passes the home inspection, you can expect approval in as little as 15 days compared to an average of 45 days for a property within city limits. It should also be mentioned that you can be allowed financing of up to 90% for many properties in the suburbs. Which is good news for anyone unable to meet the 20% down payment required for NYC purchases.