If you are looking at buying a home in New York, one of the first things you should do is learn about the nuances involved in buying property in New York state. Not knowing the process could delay your real estate transaction and cost you unnecessary time and money.
But don’t let that discourage you, New York offers one of the widest variety of cities, suburbs, towns, and property types, making it easy for you to find a place that suits your lifestyle and personality.
8 Thing You Should Consider When Buying a Home in New York
1. Use a trusted real estate agent.
If you are unfamiliar with buying property in New York, a real estate agent will help understand your needs, and identify appropriate listings for you to see.
While a lot of buyers are concerned that realtor commissions add to the price of a home, a trusted realtor will help you find a home that’s not only right for you but also fits your budget. Need not worry about paying the relator as the commissions are typically paid by the seller. Knowing the market well, a good realtor will help negotiate a good price for you, facilitate showings and inspections, and overall protect your interests while guiding you through the buying process.
While every home has a “listing agent”, a listing agent is often looking after the seller’s best interest so it is important to work with a trusted realtor.
2. A house purchase involves a contract
It’s important to remember that when you buy a home, you are the customer. What you need and want are important and need to be taken into consideration by the listing agent and the seller.
When you buy a house, there are a lot of documents to sign. Many of those papers are contracts that could seem wordy or complicated. A real estate contract is a written agreement between you, as a buyer, and seller that guides the entire transaction. In New York, the relators will negotiate the terms of the transaction, however, the contracts are prepared and legalized are negotiated by the attorneys involved in the transaction.
3. Hire a good real estate attorney
Buying a home is an important investment, especially in New York. When you are finally ready to buy your home, you want to make sure everything is done right, and that nothing is missed or skipped.
Even though a legal professional isn’t required by law when buying property in New York, a real estate attorney will help the entire transaction go smoothly, educate you on the buying process, and protect your best interest.
If you are new to buying real estate in New York, a real estate attorney will not only help negotiate the contract on your behalf but also create a purchasing arrangement that is tailored to your needs and will review your real estate contract to ensure all the i’s are dotted and all t’s are crossed.
4. Don’t buy for the life you have today, think ahead
Buying a home in New York is not only an important investment but also a long-term commitment for you and your family (or future family). It’s one of the biggest commitments you will make in your life.
Before buying what appears to be your dream home, think about your future plans. Are you planning to stay at your current job, are you planning to get married or have kids, are you planning to have a car, etc.
It’s important to know that, depending on the interest rate of your mortgages, your monthly payments may not start making a serious dent in your equity until 7-10 years. Thinking about your future plans will help you choose a home that is perfect for you and will allow you to grow, without needing to repeat the entire process.
5. Look beyond the paint
When you’re looking for the right home, it’s very easy to lose interest in a property that has an old kitchen, a poorly modeled kitchen, old bathrooms, and so on.
But keep in mind that, unless you are building a home from scratch, it’s unlikely that you will find the perfect home that matches all your criteria. However, painting, fixing cosmetic issues, and even basic remodeling are easy and relatively inexpensive.
“Looking beyond the paint” means seeing a home’s potential and seeing if you can create what you consider a dream home with what you have.
Some aspects of a home are not just “paint” issues. For example, if you want to add a bathroom or another bedroom, that can get expensive. When looking for your home it is important to take this into consideration as well.
6. Buy a house you know you can afford
You may be surprised to see that your bank or lender has approved you for a loan 2-3 times bigger than what you need or expected. That doesn’t mean you can afford it.
Before buying a home, set your budget based on what you can comfortably pay off each month. Think about your reserves as well and make sure that, should you need to take 2-3 months to find a new job, that you will have enough reserves to continue the payments on your home.
If you are finding yourself trying to squeeze your future monthly payments into your monthly budget, you may need to reduce your expectations. Most home mortgages take 30 years to pay off, make sure that your monthly mortgage payment easily fits into your income and monthly expenses.
7. Think beyond the purchase price
Earlier I said to “look beyond the paint”. This is similar but in reverse.
When you are buying a home it’s very easy to get fixated on the home’s purchase price. But that initial price is just one cost associated with your new potential home. Looking beyond the purchase price refers to taking into consideration all the costs of that future home.
This could be insurance, loan insurance, homeowner association costs, annual real estate taxes, maintenance costs such as roof, air conditioner, and so on. You can also calculate into this the costs of fixing up your home to make it like you want it to be.
For example, a nice condo with a large monthly HOA fee may be priced lower than other homes on the market, but once you buy it you may find yourself paying more than you expected. Lastly, keep in mind that HOA fees, property taxes, and insurance premiums go up each year.
The whole idea of your home is to provide a comfortable living space.
8. For newly graduated students: consider your student loans
If you are a student who recently graduated and are now looking for your first home, take into consideration your student loan debt. Following the last housing crisis, student loans are no longer just an annoyance that you can continue to differ, they are now treated as actual debt.
When thinking about your mortgage payments and even when applying for a home loan, take your student loan into consideration. You may want to rent or share an apartment until you have your financial status under control before jumping into a home purchase.
What Is The Most Important Thing When Buying a Home in New York?
In New York, you can find any kind of property to fit any kind of preference. And, also that, there are many factors to consider when buying a home in New York. However, by survey, the most important factor is location.
Many people say that there are three most important factors when buying a home, location, location, location. It sounds cliché, but it’s especially true in New York. A slightly imperfect home is still wondering if you love the location.
Here are some common factors people look at when choosing a location:
- Your location preference, such as waterfront, city apartment, suburban, etc.
- The neighborhood’s character.
- The daily commute to work but just in terms of time to travel, but easy of travel.
- The property value, the value of properties around your future home, and general potential for an increase in value.
- Nearby amenities.
- For people with kids, the home’s school district.
Preparing to Buy Your Home in New York
Buying a house can be an exciting process, it can also be time-consuming and emotional. Before starting your home search, you will want to understand the ins and outs of buying a home, especially in New York. Even knowing a few basics will empower you to make the best decision for you, your family, and your budget.
If you are looking at buying a home in New York, here are some things to consider:
Find out, is now a good time to buy a house? Things like inventory, mortgage rates, and demand all play a part in answering this question. At the time of this writing, while mortgage rates are at an all-time low, home prices are soaring due to low inventory and high demand. Buying now could mean overpaying for a home, while waiting too long may mean getting priced out of the right location or home for you.
Your personal plans and details also play a role. How urgently do you need a home and are you willing to wait to find the right one, at the right price? How stable is your position at work and can you afford the future payments on a mortgage? What are your plans, are you planning to have kids, get married, and so on?
Somewhere between the market’s position and your personal plans and needs, you will find balance and the right answer to the question “is it the right time for me to buy a home”.
Should I buy a home?
It’s nice to have your own home, and homeowner ships give you a sense of pride and freedom. But is it right for you?
To answer this question, you should take into consideration the above two factors plus a third:
- The market’s position
- Your personal plans
- Your long-term financial outlook
Buying a home is an important investment and a long-term financial commitment. When buying a home, your long-term financial status and outlook should be clear. If you plan to put down your roots, then buying a home seems like the right choice. Consider all factors and decide if it is buying a home is the right option for you.
What are the steps to buying a home in New York?
If you have decided that you can and should buy a home in New York, it’s important to have a general idea of the home buying process. Here are the general steps you will be taking when buying a home:
- Check your credit and mortgage potential.
- Check your financial plan and create a budget for your new home, a minimum and maximum asking price taking into account monthly payments you can comfortably make.
- Prepare to pay a down payment and closing costs. While most of your home will be paid by your loan, you will be required to have a down payment in cash and pay the closing costs on your home.
- Find the best bank or lender for your loan. Different lenders have different rates and mortgage plans. Do some shopping and find the one that best fits your budget and needs. You should check with several lenders and ask for pre-approval letters. Most lenders can create a letter without dinging your credit.
- Find a real estate agent you like and trust. Establish your plans, future goals, as well as needs, and try to nail down an ideal home and location. Your realtor will help find homes for sale in New York that fit your criteria.
- Hire a real estate attorney. In addition to making the entire real estate transaction smooth and easy, a real estate attorney will make sure your best interests are considered and that you and your investment are protected.
- See multiple homes. Shopping for a home is totally different than shopping for a car or anything else. Work with your realtor to see as many homes as you need until you find the right one.
- Once you find the right one, make an offer. After the offer is accepted, this is where you will work with your real estate attorney to ensure you are protected and the contract includes all the agreed-upon terms.
- Negotiate. The seller may want to negotiate your offer by changing the terms of the agreement, the price, the timing, and so on at the time of the contract. It’s important to remember that you do not need to enter into a real estate contract that you don’t feel comfortable with. A real estate attorney will help you ensure you are protected and the deal works for you.
- Do a home inspection. Once your offer has been accepted, you will have a period of time to do a home inspection to check the critical factors of the home. Depending on what you find you will be able to choose whether you want to withdraw your offer, move forward with the sale, or negotiate any repairs or lower the price considering the repairs that will be needed. Again, if needed, work with your real estate agent to negotiate based on anything that needs repairs to make sure you still get the deal. The real estate attorney will ensure those items are included in the contract with a Repair Rider.
Secure your financing. Once you have passed the inspection stage you will start the process to obtain your financing from the bank or lender you chose.
- Final walk-through. Prior to closing, do one final walk-through with your realtor.
- Closing. The closing will be a legal meeting with you, the seller, the seller’s attorney, the bank attorney, the title closer, and your real estate attorney. Here is where you will sign all the final documents to purchase your home. The result of the closing is you will own the home!
The Importance of Having a Real Estate Attorney When Buying a Home in New York
New York real estate can be confusing. Many do not realize that it is much safer to buy a home when you use a real estate attorney. A Realtor will help you find the right home and will help you make an offer and have it accepted. But after that, the legal process starts. A real estate attorney will help guide you through this often-difficult buying process.
In most states, including New York, having a real estate attorney involved is strongly recommended. Real estate attorneys can help with:
- Drafting a contract that secures your best interests.
- Dealing with the contract negotiation process.
- Addressing liens and other title issues.
- Getting filings right the first time.
- Expediting the entire real estate transaction and process, making it smooth.
As one of New York’s premier real estate law firms, Piccinnini Law offers expert real estate representation to help protect you, your family, and your investment