Buying a home in New York City is not a task often described as easy. The high cost of living can be prohibitive, and the prospect of navigating the co-op process often gives buyers pause. While we can’t make NYC property less expensive, we can make the process less daunting. We’ve compiled an NYC home buying guide to help get you primed and ready to purchase the perfect pad.
Gathering your financials
If you thought renting required an extensive look into your personal finances, be prepared for your mortgage lender to dig into your business as well. Since your finances will be under a microscope, you’ll want to make sure they’re in good standing.
- Determine how much you can afford. As a general rule, your mortgage shouldn’t be more than 28% of your gross monthly income.
- Obtain your credit report and fix any errors. Your credit score can have a serious affect on what kinds of mortgages you’re offered and at what interest rates, so you want it to be as high as possible when you go to apply. You can check out our guide on credit scores here.
- Get your important documents in order. You’ll need to collect your proof of employment, income, and tax returns.
- Figure out what kind of mortgage you want. Check out our guide on mortgage types to help you discover which kind is best for your needs.
- Determine your potential down payment. If it’s going to be under 20%, you need to think about private mortgage insurance (PMI).
- Finally: Get pre-approved for a mortgage.
How to start your search
Localize makes the home search process easy, allowing users to view every property detail from the schools in the area, down to the amount of sunlight a unit gets. Robin, our property search concierge, can jumpstart your home-buying journey.
- Talk to family and neighbors. Sometimes finding a great place is just a matter of luck. For all you know, somebody in your life already knows someone who’s selling their place.
- Start looking online. Use home search sites such as Localize to find homes for sale.
- Dig into the details of listings. Localize has exclusive information about homes that you won’t find anywhere else. Sort your search by what is most important to you to find your dream home faster. Must have tons of natural light? Need to be near a great school? Want a short commute? Localize and Robin can help by sorting listings by your must-haves.
Determining your must-haves
Narrowing down your “must-haves” versus “nice-to-haves” will help determine which attributes of a home are most important. Your preferences may change as you view homes, so be sure to keep your shortlist handy in order to provide feedback to your agent about your likes and dislikes. This could include factors such as:
- Neighborhood preferences
- Number of bedrooms
- Number of bathrooms
- Near public transportation
- Near good schools
- Private outdoor space
- Co-op or condo
Robin, our home hunting advisor, will track the features and attributes you care about most and send curated listings directly to you.
Assembling a crew of real estate professionals
Buying a home is a team sport, and you want to make sure your roster is stacked with knowledgeable professionals that truly understand your needs. You may want to ask friends and family for referrals—if they’ve purchased a home in NYC, they can be a great resource. A couple of other tips you might want to consider are:
- Find a buyer’s agent that you trust. Trust is really important in this relationship. Buying a house is a huge investment! You want to make sure you’re in trustworthy hands and working with someone who wants you get you a good home at a reasonable price.
- Shop for a reputable mortgage lender. Getting a home loan is a really daunting process, and sometimes buyers can get overwhelmed by the sheer amount of options out there. However, you’re going to be paying your mortgage for the next several decades, so you want to be absolutely sure you’re getting a fair deal.
- Get a real estate lawyer. You won’t need one until you’re ready to close on a home, but you’ll want to vet candidates ahead of time.
- Consider other services you may need. Other common professionals that home buyers work with include home inspectors, title insurance companies, and additional attorneys.
- Does the place need to be renovated? If so, you’ll want to find a reputable contractor to do the work.
Connecting with a mortgage representative
This process typically includes checking in, confirming your mortgage terms, and providing them with any additional information they may have requested. After getting your information, they’ll work with you to estimate your down payment and closing costs. Additionally, some lenders may also require an appraisal of the property.
Ready, set, bid!
You need to work with your real estate agent to help you put your best bid forward. It’s a delicate balance—bidding at the top of your budget may make it difficult to compete with other offers—but putting in an offer that is too low could leave you walking away empty-handed. Here are some tips for bidding:
- Compare similar properties to determine market value. You’ll want to look at places that have both sold recently and are up for sale. After you understand the value, you’ll be able to determine what price feels good to you based on your specific situation.
- Get advice from your agent about the buying environment. If it is a competitive market, there are other things besides price that may make your offer more appealing.
- Find out what is most valuable to the seller. Sometimes a short closing time frame is the most valuable!
- Strike for balance in your offer. Put together an offer that feels good to you, but make sure that it’s one your agent thinks will be competitive.
Signing the contract
- Go over the document. Have your real estate lawyer review the terms of the contract during a preliminary due diligence period, and identify any changes that need to be made.
- Get home and pest inspections. Address any repairs that need to be completed or negotiated.
- Do a final walkthrough. It’s always good to get one last good look at the place just to see if there’s anything you missed before signing the dotted line.
Buying a co-op? Here are some extra tips:
- Have your paperwork ready to go for the board. Collect copies of all your financial documents to submit with the purchase application and board package. This may also include personal and professional references.
- Go over all the co-op’s information. Have your lawyer review the building’s financial statements, co-op rules and other documents.
- Practice and prepare for the board interview. Treat it with the same importance you would a job interview!
Closing the deal
Bring your best pens and do some wrist stretches because you’re about to sign a seemingly endless stream of documents.
- Don’t forget your ID. You’ll need to bring current photo identification to the closing.
- Work out the logistical details of the purchase. You will need to work with your lawyer and mortgage representative to determine how the funds will be transferred. After this step, obtain any checks you may need for additional expenses.
- Get your keys and celebrate! You are now the proud owner of a new home.
Buying a home is a ton of work, but finding the perfect home for you and your family is well worth the effort. Localize empowers buyers by providing crucial data so that everyone can find their dream home. Happy house hunting—and we hope we’ll be invited to the housewarming party!