How to Buy an Apartment in NYC – The Complete Guide (2019) | Hauseit® NYC
Thinking of buying an apartment in NYC? The very first thing you should do is to determine whether it even makes sense for you to buy versus rent. Do you have a sweet deal on a rent stabilized apartment, or are you paying a super low rent while sharing with roommates you get along with? If so, there are some benefits to staying put as a renter and investing your savings in the stock market instead. Most of the time however, buying is the right choice. That’s because paying rent is wasteful and doesn’t offer you any long-term benefits. Buying an apartment also allows you to borrow a large amount of money. You can’t get financial leverage as easily if you’re thinking of investing your down payment savings in the stock market and continuing to rent. Owning an apartment in NYC also gives you a sense of purpose and stability while offering your portfolio some inflation protection and asset diversification. Finally, owning an apartment in NYC is awesome Just think about how many millions and possibly billions of people around the world dream of visiting NYC, let alone owning a piece of the city. What’s the next step once you’ve made the decision to buy? The next step is to figure out where you want to live and accurately calculate your budget. Speaking with a mortgage banker or broker to request a pre-approval letter is the best way to come up with an accurate estimate of what you can afford. Bear in mind that co-op apartments are less expensive than condos, but co-ops often have applicant financial requirements which are stricter than lenders. Co-ops also have other rules, such as restrictions on subletting. Buyer closing costs in New York City are high, so it’s also a good idea to learn about them so you can have an accurate estimate of how much cash you’d need to close To estimate your buyer closing costs in NYC, visit Hauseit’s free and interactive closing cost calculator at www.hauseit.com As a buyer in New York City, it’s always a good idea to work with an experienced buyer’s agent. Buyer’s agents earn commission from a split of the total commission paid by the seller, which means you don’t pay anything to work with a buyer’s broker. Better yet, you can save $20,000 or more on the average New York City co-op apartment by requesting a legal and tax-free Hauseit Buyer Closing Credit. Here’s how it works: we pair you with an experienced, brand name, local partner broker who will not only provide you with great advice but who has already agreed to discreetly credit you back a large portion of the buyer agent commission paid at closing by the seller. Most importantly, our partner brokers never openly discount their services. This means you’ll never have to worry about being treated differently by sellers or listing agents just because you’re receiving a large discount at closing. Once you’re set up with a buyer’s broker, you should start attending open houses. Please remember to sign in using your buyer’s broker’s contact information at open houses. This way, you’ll skip the hassle of being called by numerous brokers and being added to a multitude of newsletters. If a listing doesn’t have an open house posted, or if you’re not sure it’s really available, please send a link of the property listing to your buyer’s agent. Your agent will find out the true status of the property, ask any questions you may have and schedule a private showing for you if it’s available. As you continue searching, it’s a good idea to prepare your offer documentation and select a real estate attorney. Things move quickly in NYC real estate, so you’ll have the highest chance of winning an apartment if you are able to submit an offer quickly once you find the right home. Once you’ve found the right apartment, it’s time to begin submitting offers. It’s important to understand that offers are not binding in New York City until both parties have signed the contract. Therefore, it’s standard practice for buyers to submit multiple offers. After your offer has been accepted, your lawyer will spearhead due diligence on your behalf That means your lawyer will review and negotiate the contract on your behalf and thoroughly review building documents such as the offering plan and the most recent two years of financials. Once your lawyer has satisfactorily reviewed and negotiated everything on your behalf, it’s time to sign the contract and make a customary 10% contact deposit. Once you have a fully executed contract, it’s time to submit your mortgage application and request an appraisal. Once the bank has fully underwritten your loan, they will give you a mortgage commitment letter. Once you have your loan commitment letter, you can finish your condo or co-op board application. It’s a good idea to start on the building application as soon as you’ve signed the contract, as some items such as personal and professional reference letters can take a while to collect. As soon as your purchase application is submitted and reviewed, you’ll be called for a co-op board interview. If you’re buying a condo, there won’t be an interview and the building will simply process its waiver of right of first refusal to allow you to close on the apartment. While co-op buildings can reject any buyer, a condo can only reject a buyer if it agrees to purchase the apartment from the seller under the same deal terms you’ve negotiated. Assuming you are approved by the co-op board, the next step is closing on your apartment. The lawyers will schedule the closing, and it typically takes place at the office of one of the attorneys or the building’s managing agent. The apartment purchase process from contract to closing in NYC usually takes one to two months for a condo and two to three months for a co-op. For more detailed insight into the apartment purchase process in NYC, subscribe to our channel and visit Hauseit’s industry leading blog at www.hauseit.com.