Tips for First-Time Homebuyers
The spring buying season is upon us, as both veteran and rookie homebuyers are in the process of finding new properties to call their own. For all first time buyers, going through the process can be a daunting task. For the first time buyers in the ultra-competitive real estate market that is New York City, it can be unnerving and almost feel impossible.
Ian Katz, Principal Broker of the Ian K. Katz Group, knows the challenges and obstacles that first time buyers face in New York City. To better navigate the process, Katz has provided his tips to help first time buyers understand the ins and outs of buying a home.
“Buying in Manhattan and Brooklyn is hard for anybody. For first time buyers who are not even sure where to begin, it can be a challenge unlike anything else they’ve ever faced,” says Katz. “They’re pressuring themselves to get a deal done while being overwhelmed with numbers and figures that leave them uncertain of which step to take next. Clients look for someone who deals with this on a daily basis and knows the process inside out, and my goal is to make it as simple for my clients as I possibly can.”
Top 10 Tips For First Time NYC Homebuyers
1. Hire a buyer’s agent. It’s fairly common practice for traditional brokerages to represent both the buyer and seller in a real estate transaction (also known as dual agency), which can often lead to conflicts of interest and can result in clients not knowing who to trust. Be sure to work with a buyer’s agent who is focused solely on your side of the transaction.
2. Determine your budget and stick to it. Coming in to the home buying process knowing how much you’re willing (or able) to spend will help you determine homes that fit into your price range. Be sure to include in any potential closing, moving, or renovation costs that could be tied to the property.
3. Get pre-approved for a mortgage, then look for a home. Tying in to the previous point, getting pre-approval will let you know how much you’ll be able to borrow, solidifying your price range. This can also mean the difference in your offer being chosen over another that did not get pre-approval, as sellers will know you have a lender willing to work with you.
4. Decide co-op vs. condo. Both types of Manhattan housing have their pros and cons, and you’ll need to determine which fits better with your lifestyle and preferences. Co-ops tend to be less expensive than condos, but co-op boards often have stricter rules and more difficult application processes than the condo boards. If you value price first and foremost and have no issue with adhering to the rules, a co-op would be a great fit for you. However, if you want more liberty with sublets, LLC-owned purchases, financing rules, etc., you might want to go with the condo route.
5. Visit open houses—and then schedule private visits for top picks. Open houses are great to get a gauge on a home and determine if it’s worth devoting time to with a serious offer. However, with the hustle and bustle of foot traffic, you won’t get the opportunity to see and hear everything up close. Schedule a private revisit of any homes you liked with your agent to examine anything you may have missed during your initial visit.
6. Be thorough. Know exactly what you are getting in to with this property. Has there been any construction or violations with the property? What did other apartments in the building sell for? Are there any warning signs of future issues? Check every nook and cranny and leave no stone unturned when scrutinizing the property. Spending the time now to be thorough will save you the money and the headache later on down the road.
7. Hire an attorney who specializes in local residential real estate transactions. A real estate attorney will be your best asset in interpreting the brokerage and purchase agreements, as well as being able to explain any other questions you may have. You are going to want an attorney that will examine any agreements word for word to assure that everything is covered. Attorneys can provide legal counsel that brokers cannot, and as another party representing your best interest, will help avoid potential conflicts of interest.
8. If buying a single-family home or townhouse, hire an inspector independent from the deal. Do not take the seller’s agent’s disclosures as the final word. An independent inspection performed by someone of your choosing will give you assurance that they are viewing the home with your best interest in mind, not the seller’s. Hiring an inspector can reassure your love of a property, help you understand repair or renovation costs and timing, or can warn you to get out before it is too late.
9. Shop around for your mortgage. Do not assume you will be getting the best rate from the bank where you keep your money. Shopping with multiple lenders is relatively simple, yet it is fairly common for buyers to not do so, thinking the first offer they get will be the best. Taking the time to shop around could result in a better rate that can make the difference in being able to land your dream home on your terms.
10. Don’t be attached to an exact closing date. Buying a home is a process, one that can unfortunately take longer than anticipated. Your mortgage lender may take longer than expected, the seller may adjourn the closing several weeks, or your co-op board approval may take time. Binding yourself to get a deal done by a specific date can result in a rushed process or missed expectations. Having an end date in mind is fine as a target and negotiating point, but be flexible with it to not force yourself into a purchase you will ultimately regret.