8 Essential Tips for Buying a Home in NYC in 2023
Go Back To Previous PageDepending on your price range, buyers face fierce competition. Competitors range from working professionals to foreign cash buyers happy to leave their apartments vacant to park cash in the U.S. Competition for homes up to $2.5 million remains extreme in the city due to the large numbers of working professionals making $500,000+ a year. Those can afford to buy real estate in that price range. Ideally, buy when the market is soft.
However, everyone does not have unlimited cash and timing flexibility. We will deconstruct every piece of advice you can find from people who have never bought an apartment. We will provide our best NestApple Tips for Buying a Home in NYC. From buying a multifamily home in NYC to a foreclosed home in NYC, you will become a pro.
Buying a multifamily home in NYC
1) Get Pre-approved as the first of our Tips for Buying a Home in NYC
The specific piece of advice will suggest getting “pre-approved.” This way, you can sense what you can borrow and afford to purchase. The best brokers will not work with you unless you demonstrate you know what you want as a genuine buyer.
If you need financing, you get “pre-approved” by your mortgage broker. Also, you have a 25% down or more for a downpayment. A bank pre-approval letter remains much more reliable than a simple prequalification letter from a mortgage broker.
A pre-approval means the bank has partially underwritten your home loan. The prequalification letter remains easier to secure, typically as quickly as after a 15-minute phone call, and the lender has verified no documents.
As a result, if you need a mortgage, get pre-approved before you begin your search. If you initiated the process, listing agents would take your inquiries and offers more seriously. And if you plan on working with a buyers’ agent, they will take you more seriously.
2) Find a Great NYC Real Estate Buyer’s Agent
The typical article will suggest you work with someone you trust and ask friends and family for a referral. The primary flaw of this advice is that it does not present the possibility of getting a buyer agent commission rebate. The Attorney General legalized the buyer’s rebates after the Department Of Justice made them legal.
However, it remains frustrating no news articles, real estate newspapers, or blogs mention the possibility of a commission rebate. Even though the services of buyers’ agents are free, home buyers pay for them collectively in the form of higher sale prices.
Just because sellers have to pay the broker fee does not mean they don’t mark up sale prices to account for this cost. It makes sense then to ask for a commission rebate to account for the higher purchase price. We suggest first deciding whether the average $20,000 off your purchase price (in the form of a buyer agent rebate) means something to you.
Congratulations if it does not, and you want to work with someone you know. You probably do not need to spend time reading this article in the first place. If you don’t consider 2% of your purchase price meaningless, you can use a broker to give you a cashback rebate like NestApple.
While unprofessionalism and listing broker discrimination sometimes exist, brokers must co-broke with a member of REBNY, such as NestApple.
3) Condo or Coop?
It is knowing whether you want to buy a condo, co-op, or townhouse in New York City. Generally, condominiums and townhouses remain more popular but trade higher as “real property” with all the traditional real estate ownership rights.
However, buying a coop remains popular for many working families because they remain cheaper than comparable condos. Cooperative apartments contain just shares in a corporation that owns the entire building.
A cooperative owner receives a stock certificate and a proprietary lease with the right to occupy a specific unit in the building. Cooperative boards have much more power than condo boards as they represent the corporation’s Board of Directors. Since you must have a real estate attorney represent you in New York, ask them any questions.
4) Have an Attorney Ready
One of the most common first-time homebuyer mistakes is submitting an offer without hiring a real estate attorney. They must scramble to enlist a real estate lawyer when they inevitably get an accepted offer. This can result in several critical days of delays. Sometimes, the listing agents assume that the buyer is only window shopping.
Real estate offers: non-binding in New York.
This will result in the listing agent continuing to show the property and shopping your offer to other buyers. Unlike many states that do not require real estate lawyers for transactions, New York requires buyers and sellers to involve a lawyer in a real estate sale.
Lawyers, along with your buyer’s agent, mortgage broker, and mortgage lender, remain a critical part of your team and real estate transaction when buying a home.
A real estate attorney will review and negotiate the complex purchase contract and any riders on your behalf.
Your lawyer will schedule an appointment at the managing agent’s office to review the board minutes. Your lawyer will conduct legal and financial due diligence on your behalf by reviewing the building’s financial statements, original offering plan, and other essential co-op documents.
They include house rules, sublet policy, proprietary lease, and bylaws.
The attorney of our choice will guide you through closing and ensure your mortgage commitment letter and other documents are in good order.
Your lawyer will give you a good faith estimate of your closing costs, handle any escrows, and make sure the lender’s fees are correct. He will review the title report or coop lien search. Your lawyer will help you resolve any issues, such as existing liens on the property. Lastly, your lawyer will also prepare all of your closing documentation, calculate how much money remains owed by whom and make sure that all payments get processed at closing.
5) Begin Your Search: Tips for Buying a Home in NYC
First, clarify the advantages at this crucial stage of searching with an agent vs. searching yourself. Working with a buyers’ agent gives you fresher listing data than consumers can access. A buyer will typically use a website like Streeteasy or Zillow to search. However, these websites do not refresh their feeds continuously.
In contrast, real estate agents must update their listings immediately or face stiff penalties. An agent in NYC must update a listing’s status change within 24 hours.
Therefore, agents update their listing data directly to their local inter-broker database. This database refreshes almost instantaneously, and their data becomes, by default, always fresh and most up-to-date.
6) Don’t Reach out Directly to Listing Agents
Among our tips for Buying a Home in NYC, this is one of the most important. Assuming you’ve decided to work with a buyer’s agent, you must respect industry conventions for buying a home in NYC. Don’t directly make the “substantive first contact” with the listing agent.
Doing so may cause the listing agent to refuse to work with your buyer’s agent. He looks at you as a direct buyer. We realize this can be tough sometimes. You want to buy, look at homes online, and have your questions answered immediately.
However, resist the urge to hit “Contact Agent” and instead send a list of your items and listings you want to see to your buyer’s agent.
Your buyer agent will reach out, schedule showings, sign you up for open houses, and get your questions answered. It may seem cumbersome. Still, the upside is you’ll have a loyal, dedicated agent with better data than you. Your agent will schedule, negotiate, and be with you every step of the way.
7) What Happens If I Reach Out to a Listing Agent Directly?
Most real estate agents who belong to REBNY behave professionally. They realize that it sometimes happens that a buyer agent’s client will reach out to a listing agent directly. Most listing agents will not make a big deal out of it, and they will not have an issue with buyers going to open houses and even private showings alone.
This behavior makes the lives of buyers’ agents easier. Also, every listing agent will be a buyer’s agent for another client. Agents need to be able to work harmoniously with other agents to close a deal, and they typically behave professionally to get the same lenient treatment in return.
There will always be examples of harmful real estate agents causing trouble for buyers’ agents who don’t show up. However, this points out to typically small-minded people who don’t do much business. Moreover, REBNY does not require a buyer’s agent to accompany the buyer to a showing.
Some new development “sponsor sales” may have a separate co-brokerage agreement specifying that the buyer’s agent must attend the showing. However, the industry does not often enforce that practice.
8) Who’s the Listing Agent for a Property?
Navigating the ads you see on popular real estate websites is tricky. Most of these search portals rely on advertising. Real estate agents pay to get “accidentally” contacted on listings. In the quest for ever-rising revenue, these real estate search sites have made it even easier for buyers to click “contact agent accidentally.”
Buyers get misled into contacting a random agent who paid to advertise versus the listing agent.
Buying a house will be a headache for you as you will have yet another intermediary. The advertising agent may take a while to respond because they must find answers from the seller’s agent. If the seller’s agent does not know, they must ask the seller or the building’s managing agent.
Working with a seasoned buyer’s agent, such as NestApple, remains critical when buying a home in NYC. Your buyer’s broker will always contact listing agents directly. Your agent can often find out more about the property before you can go due to access to broker databases with more detailed property information.
Better still, by working exclusively with a NestApple buyer’s agent, you will have only one point of contact for your entire property search. This beats getting added to newsletters and regularly called and emailed by dozens of random advertising agents, listing agents, etc.
Perhaps you wish to save your buyer’s agent some time by finding more information about properties directly from the listing agent. For example, you can use a disposable email address or an alias. This way, you can avoid harassment. You do not cause any conflict if you decide to make an offer on the property through your buyer’s agent.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
