Ready to buy a home in New York City? Don’t go in unprepared – it’s a dog-eat-dog world out there. Thankfully, experienced realtor Daniel Geller of the Geller Group has his pro tips for first-time homebuyers in the city that never sleeps.
What do first-time homebuyers in New York need to know?
First, there’s the obvious: the neighborhood, budget, size, etc. Beyond that, four things are crucial:
- Have realistic expectations. A buyer can’t expect to get a 3,000 square foot loft in TriBeca for $300,000 – the actual price would be approximately $3 to 4 million, or even higher.
- Things move fast. If a buyer sees something they love, she needs to be prepared to make an offer quickly before someone else does. Inventory levels are at an all-time low, where demand far outweighs supply.
- Get pre-approved, not pre-qualified. Making an offer with a pre-approval letter carries much more weight than an offer without one.
- You can’t do it alone. It is essential to have a strong real estate agent who understands the math, science, and art of negotiation. Sometimes it’s not enough to just go to the bargaining table. Sometimes it really matters who you bring.
What are some good resources for those homebuyers?
Buyers need to speak with a mortgage banker or mortgage broker to see where they stand in terms of budget and examine their debt-to-income ratio. This plays a big part when purchasing a co-op as opposed to a condo or townhouse, because co-op boards look at the financials very carefully and most times have very strict post-closing financial criteria – sometimes even more strict than lenders’ criteria.
The other resource a buyer needs to have is an outstanding real estate agent. A good way to find an agent is a referral from a friend, colleague, or acquaintance. My business is driven by referrals because my clients understand and appreciate the value I bring to them. An agent is crucial to the buying and selling process in Manhattan, which is the most complex real estate landscape to navigate in the United States.
What are the three most common misconceptions about buying a home in New York?
The first is that it’s easy to buy an apartment in New York City. The fact is, it’s not. The competition for homes in Manhattan is fierce. Then there is the co-op board application, which is a document your broker will prepare with you. It’s like laying your personal and financial life out on the table for a co-op board to judge you on. And if every cent isn’t accounted for, the application it will promptly be returned until it is corrected.
The second misconception is that the longer buyers wait, the less money they’ll have to pay. That couldn’t be further from the truth. Historically, prices rise in Manhattan. Even with the crash of 2008, we didn’t see much price decrease. And, the market bounced back very quickly.
The final misconception is that people think they will find 100% of what they want in a home. I always instruct my buyers that there is no such thing as a perfect home. If a buyer can find a home that matches 95% of their checklist they need to seriously consider buying it.
Is there any advice you’d have for younger home buyers in particular?
I recently had client who is a 23-year-old, first-time buyer with a budget of $600,000 for a 1-bedroom apartment, which is considered small by New York City standards. She was nervous because she was making a huge commitment to her financial future. I told her to take a deep breath and assured her that I would be with her every step of the way.
Buying a home is a big step no matter what age the buyer is. It turned out well for her. I found her a beautiful apartment in a co-op building with low maintenance with an asking price of $570,000. But I negotiated the price down to $495,000. So my advice is simple: come prepared, have realistic expectations, and always make sure you have the best real estate agent possible.