Looking to purchase a home in New York City? It may seem daunting, but our agents with extensive knowledge of Manhattan real estate are here to help you make this process go as smoothly as possible.
With interest rates at an all-time low, rents at an all-time high and the sales market on the rise, now the best time in recent history to purchase a home. Ask your 3JM agent to run a customized rent vs. buy analysis for you and explain the tax benefits of home ownership. 9 times out of 10 your net monthly payment on the home you own, with or without mortgage, will be lower than rent on same apartment.
Give Yourself Time to Find an Apartment
Typically, first time home buyers can find an apartment within 30-60 days. Once you find the perfect fit, it usually takes 45-60 days to close. This process could be longer if you decide to take out a mortgage loan or shorter if you plan to make an all-cash transaction. Our agents will help you with all your paperwork to streamline this process as much as possible.
You should try to see as many apartments as you need to feel comfortable that you are getting a good value for your money. On average, a first time buyer can see anywhere from 1 to 15 properties. Your 3JM agent will put together a comparative market analysis for each apartment to show which of the options would a better investment.
Types of Ownership
Co-operatives are the most common type of home ownership in New York City. When purchasing a co-op, you are buying shares of a corporation that owns the entire building. Co-op residents pay a monthly maintenance fee which covers the shareholder’s taxes, building expenses and share of the underlying mortgage on the building. Real estate taxes are generally lower in co-ops. Co-ops generally have stringent requirements for purchasing an apartment and subletting it, but residents enjoy a lower turnover in the building. A co-op board may deny any buyer or renter if it is not satisfied with his or her qualifications. Co-ops are typically more affordable than condos.
Condominiums are considered “real property”, which means that each unit owner has full control over his or her apartment. Each apartment has its own tax lot, enabling residents to pay individual real estate taxes and common charges. A condo board may not reject a buyer or renter, it can only exercise the “right of first refusal”, which allows board members to buy or rent the apartment in question on the same terms as an outside buyer or renter is offered. Condos are generally more expensive than co-ops.
Working with an Agent
Looking for a home without an agent is like going to a trial without a lawyer. As members of the Real Estate Board of New York (REBNY), 3JM agents have access to virtually every property in New York City. Our team works hard to understand your needs and preferences, and uses its experience to save you time and money in this complicated process.
Once the apartment goes into contract, your agent will compile a board package to present your qualifications in the best light to the board and serve as a liaison between you, the seller’s side and your mortgage consultant. Your agent will help you prepare for the board interview and make sure all the paperwork is ready for a smooth closing.
Closing – After the board approves your application, the final step is to close the deal. We usually advise our clients to budget anywhere between 3% and 5% of the sale price for closing costs, depending on the type of property, the price and whether or not they are financing. It is best to consult with your attorney, mortgage banker or accountant for a more detailed estimate.
Up Front Costs – When you finalize the contract and sign it, you are typically required to put down 10% of the sale price as earnest money. Upon closing, depending on your financing, you should expect to put down at least another 10%, as well as covering the closing costs.