Table of Contents
Latest posts by Gea Elika (see all)
- Buying vs. Renting – 13 Reasons on Whether You Should in NYC - March 23, 2018
- Due Diligence for NYC Real Estate Purchases - March 20, 2018
- 10 Things to Know about Buying Investment Properties in NYC - March 17, 2018
Purchasing a home is rewarding and requires a long-term commitment. You need a professional team who can handle the buying process without losing sight of your individual needs. Here’s how the step-by-step process of buying a New York City home can work for you.
1: Making the Decision
Buying a home is a big decision from a financial and emotional perspective. Home ownership is the American dream. Yet owning a home must be your dream. The decision to purchase a home must make sense for you at this moment. Purchasing a home is a huge commitment. If you have your finances in order and find a good deal, home ownership is the best investment you will ever make in your lifetime.
Advantages of Homeownership
- Freedom. You have the freedom to do with your property as you please make it truly your home
- Build Equity. Rent paid will never be seen again. A mortgage payment allows you to build equity
- Appreciation. Between 1998 – 2007 NY home prices saw gains of over 150% on average
- Tax Breaks. The US Tax Code allows you to deduct mortgage interest, property taxes plus more
- Predictability. Unlike rent, your mortgage payments should remain steady over the years
- Stability. Become part of a community, establish roots and lifelong friendships
2: Find a Buyers Agent
Find an agent who works for you – the home buyer. Real estate agents make sure that buying a home is an efficient process and stress-free experience. Find a local, knowledgeable buyers agent that is an advocate for your best interests.
Real Estate Buyers Agents
- Listen and analyze your needs and preferences
- Keep you updated on current market conditions
- Locate apartments and homes matching your criteria
- Refer a team of professionals – attorney, inspector etc – on your behalf
- Perform a Comparable Market Analysis
- Negotiate with the seller’s agent on your behalf
- Prepare documents and submit Condo or Co-op applications
- Handle any additional issues
- Assist with post-closing services – Movers, Insurance Companies etc
3: Arrange Financing
Lenders pre-approve home buyers for a specific amount of financing. Home buyers must feel comfortable with the amount of the monthly mortgage payment terms. If the figure strains your budget, monthly payments could become unmanageable over time. Ultimately, it is your decision but make it a wise one. Overstretching your budget can lead to unwanted stress.
How to Finance a Home
- Select a Mortgage Broker or Bank
- Submit a loan application and receive pre-approval
- Determine a suitable payment and choose a loan option
- Forward an accepted purchase offer contract to the lender
- Receive an appraisal and final commitment letter
- Get funding at closing
4: Locate Your Dream Home
How do you find your dream home? Once you are pre-approved for financing, you can begin to search for the perfect home. Looking on your own can be a confusing and an overwhelming experience. Your personal buyer’s agent can pinpoint homes that match your needs and preferences.
- Choose your preferred neighborhood(s)
- Prioritize the facilities and services you would like in your neighborhood. (schools, transportation, fitness center,…)
- How much space would you like and need in your new home? Which type of space? (dining room, closets,…)
- Is your priority the neighborhood or size of home?
- 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?
Tip: Preferences may change as buyers go through the process of purchasing a new home.
5: Organize and Submit an Offer
When you find your dream home, it is time to make an offer. Buying a home is an emotional purchase but it is a significant investment. Your real estate agent can help you estimate the fair value for a particular apartment by researching market comparables. Agents will check out similar neighborhood properties, determine market value, and get you a fair price.
6: Inspect & Insure
When you find your dream home, it can be hard to see beyond the superb interior design or spacious rooms. Yet potential home buyers 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.
Home buyers should attend the inspection to gain a better understanding of the home. The inspector might unearth minor and major issues. Small issues can be fixed easily – even delayed for a period of time. Big problems, however, require calling in a specialist to examine the issue. A professional can advise whether you should fix the problem or walk away from the deal.
New buyers must purchase a homeowner’s insurance policy. This coverage protects homeowners against loss or damage to property as well as liability in the event that someone gets hurt in your home.
Purchase Offer Components
- Price – a pre-approved amount that meets your approval and you are capable of paying
- Terms – other factors (financial and timing) in the offer
- Contingencies – clauses allowing 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 property etc ). Contingencies specify any event that must occur for the contract to be formed and enforceable.
- Once agreeing on a price and signing a contract of sale you will then need to submit an application to the board of directors of the co-operative or the condominium building. The documents are generally the same, but the review is different.
7: 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.
- Keep control of your finances and credit
- Stay in contact with your real estate agent and lender.
- Return phone calls and complete documents in a timely manner.
- 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 agent.
- Prior to closing, confirm with your attorney, home insurance official, and lender that the settlement statement, certified funds, and evidence of insurance are in place
8: Moving In
Your dream home awaits its new owners. Congratulations! You can move into your new home.