What You Need to Know About Buying a House In New York

Buying a home is not only the most significant, and likely the most expensive purchase most people will make in their lifetime, but it also involves the law of real property.  

Buying a home in New York City is exciting, but can be a daunting task because it can be a complex transaction that could bring many challenges and legal consequences.

Whether you are purchasing your first home, second home, vacation home, or an investment property in New York, here are some crucial things you should know:

First of all, learn about the pricing of real estate in NY.  The median sales price in Manhattan is around $1.1 million; in Brooklyn $808,000, and in Queens $573,500.

Yes, the prices in the cultural capital of the world are certainly not low.  But, the good news is, New York is experiencing a building boom, which means more supply than demand, and real estate brokers see it as a buyer’s market.

There are several types of homes you could buy in New York; to make the best decision based on your specific needs, it’s important to get educated on what each option holds.  

Condos

Buying them means you have full ownership of the apartment, and some part of the building’s common areas. Though the condo building has a board, it’s not as involved as a co-op board.  You have a freedom to rent or sell your condo, and this is usually a good option if you’re not looking for a long-term investment.

Townhouses

They can serve as your single-family home or you can have multiple apartments within it.  Townhouses often have backyards and rooftops, and offer more privacy than a condo, so they also tend to be pricey.

Fully Detached Homes

Are harder to come by in the city, especially in Manhattan, since many have been converted into smaller units, or commercial spaces.  If you’re looking to buy a fully detached home, you’ll have a relatively easy time finding it in outer-boroughs neighborhoods.  

Loft

Typically, these are spaces in former industrial or manufacturing buildings that have been converted into residential spaces, but you can find an original one in neighborhoods like Tribeca, Soho, and Williamsburg.  Many new lofts have been built to recreate the atmosphere of the original ones, notable for their high ceilings, large windows, wide open spaces and layout. 

Co-Ops

You get a share in the co-op association, where owners and all the shareholders together own the building and its units.  Co-op boards play a big role in determining who gets to own in their buildings, if a unit you purchased can be rented, and even if major changes to the apartment can be made.  They are more plentiful in the city, generally older than condos (and less expensive), and some have celebrity owners.  Co-ops can be a great option if you’re looking to make a long-term investment in a home.

As far as timing, the ideal time to buy real estate in New York is usually between April and June, and September through October.  Many new developments, including condos and co-ops, typically enter the market, which means as a buyer you’ll have more to choose from.  It’s generally a more competitive time, meaning you are likely to score better discounts in the fall.

Before you start to get more serious about searching for your home, make sure you have secured a Down Payment.  While a 20 percent down payment is considered the benchmark, it’s possible to find homes with lower percentage of down payment, especially for some of the new condo buildings in the city.  Being able to put 20 percent down will greatly increase your chances to acquire a loan and lessen your interest rate; with lower down payments you’ll have to consider other factors, like getting a private mortgage insurance to bail you out in case of a default.

Thanks to Federal Housing Administration (FHA) loans, you can even pay as little as 3.5 percent.  However, know that there aren’t that many FHA-compliant buildings in New York City, as most are located in the outer boroughs.

Also, in December 2017, the city introduced new programs to make homeownership more affordable in the city.

Unless you are paying cash, getting Pre-Approved is another crucial step in the process of purchasing a new home.  Sellers, particularly co-op boards, are looking for strong financial records – and the most important factor is your bank’s approval.

Considering the highly competitive market in New York, it can truly help to get a real estate agent or broker.  Your broker will help you secure the best possible deal, assist you in bargaining for concessions, and be especially helpful when looking to purchase in a co-op building.

Getting a real estate lawyer is even more critical – unlike many other parts of the country, if you’re a buyer in New York you need to draw up a contract in order to finalize a sale.  Unless you are very familiar with the law, this can be a very challenging task.  Your real estate attorney will also be able to better advise you about potential concerns in your new building or home, such as building violations, as they review the paperwork for the property.  Typically, both the buyer and seller of real estate have legal representation in New York City.

A seasoned NYC real estate lawyer will assist you in preparing all complex negotiations and contracts, take steps to ensure that you are aware of any legal particulars in this state, and help ensure a real estate transaction proceeds smoothly.

Finally, many factors can play a role in the amount of time it takes to secure your home – such as getting pre-approval from your lender, buying a condo versus a co-op, the real estate broker and lawyer you’ve hired.  

The Levin Law Group’s law firm can assist individuals and business entities in a broad spectrum of residential and commercial real estate transactions throughout New York State and New Jersey.

Take steps to ensure your interests are protected – contact our skilled and trusted New York real estate lawyers today.