Want to buy an apartment in the city, but aren’t sure where to start? Check out these insights from NYC real estate broker Karen Palacios on what the cut-throat city real estate market is really like.
In this article:
1. Identify Neighborhoods and Narrow Down Your Wish List
Don’t run around without knowing your area of interest. Sometimes buyers will ask for a 1-bedroom apartment, from anywhere between 160th Street and the Financial District. This will only end up making the search process more stressful. It’s better to identify a specific neighborhood or two you would like to buy in. Make sure to exhaust all options that fit your wish list in the area, and then pick a second or a third option. If location isn’t your biggest stipulation, plan similarly with the other items at the top of your wish list, whether it’s a building with a doorman or a room with a great view.
2. Obtain a Commitment Letter
When deciding to buy an apartment, you’ll need to know your purchasing power. This entails getting pre-approved by a bank, a process that usually only takes 24 hours. It’s also a good idea to shop around; your bank might not necessarily offer the best home loan based on your credit score.
Once you know your pre-approval, it is very important to obtain a commitment letter from the bank you wish to get your loan from. Commitment letters take work. You will have to gather all your tax returns, financial information, and relevant paperwork – but they are worth it in the end. Once a bank gives you a commitment letter, they will not be able to back out and reject you when you officially apply for the loan they pre-approved you for.
3. Line up a Manhattan-based Attorney
The Manhattan real estate market is much different than others in the country. For one thing, co-ops make up roughly 75% of the city’s housing inventory. Attorneys based anywhere outside the city will not have the same experience dealing with the many more stipulations that co-op buildings require, such as maintenance fees, tax returns, and proof of job security. In a competitive market, the more time it takes your attorney to figure out and navigate the co-op world, the more likely it is for another buyer to swoop in and make an offer on the place you have been eyeing. Manhattan-based attorneys are also likely to already have relationships with one another, which always simplifies the process.
4. Fill out a Financial Form
A real estate agent’s dream buyer is one who fills out a financial form. Naturally, many buyers are hesitant to disclose all of their relevant personal and financial information. It will, however, help both of you in the long run if you are upfront with what you own and your amount of debt. Your agent will then be able to help you narrow down the type of property you will realistically be able to afford. This is especially important in the co-op world, as some co-ops will ask for this information up front and require proof that you will have money left in the bank after purchasing to pay your maintenance fees. Since co-ops are membership-based, potential members must interview with members of the board as well as pass the financial stipulations. It is best that you and your agent are on the same page as to what you can realistically afford before beginning the long process.
5. Plan ahead
It takes at least 1–3 months to close on a home in NYC. The time it takes depends on the type of property you choose and whether you’ll take out a mortgage. For example, if you make an offer on an apartment in a cooperative (co-op) building and your offer is accepted, you might not be able to move in for at least 60 days. Co-ops have an application process that often adds 30 days to your timeline. Your real estate agent and attorney can investigate these details ahead of time to help you plan accordingly.
Newly-Listed Starter Apartments
Would you like to tour any of these properties?
Just complete the info below.
Or call us at (212) 755-5544
Would you like to tour any of these properties?
Just complete the info below.
Or call us at (212) 755-5544
Would you like to tour any of these properties?
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
