10 Must Read Tips for NEW NYC Buyers
By Kimberly Noel, Halstead Property Agent & Neighborhood Expert
Manhattan buyers are facing a robust yet tough market these days. The property values keep climbing, promising great ROI*; however, nothing is stopping qualified buyers from going tooth and nail over the slim inventory. These days, even the millionaires are shedding tears over a lost bid, and many of Manhattan’s elite are sourly accepting their second or third choices. Seller’s may not be gloating, but nor are they handing out the Kleenex. According to the data of chief economist, Gregory Heym, sellers are not budging much in negotiations as they continue reap 96.8% of their asking price. This does not mean buyers are at a total disadvantage, particularly for investors, since rental incomes are on the rise with no signs of slowing down. Below are crucial tips to bulk up against the competition and to optimize the chances of coming in first.
1. Know What You Want and Know Thyself: Outline realistically your absolute necessities and deal breakers and consider your gut feelings about the property.
2. Plan For the Buying Process To Take Longer Than You Expect: This is particularly true for Co-Ops and Condos which may take up to 6 months.
3. Even If You are Not Planning to Finance Your Purchase, Meet With Your Financial Advisor Prior To The Apartment Hunt: Half of the inventory available for purchase in Manhattan is still in Co-op buildings, so it is good to plan to confront “the Board”. It is wise to collect your financial records in advance and make sure to plan with an advisor. According to Private Mortgage banker, Judd Derario of Wells Fargo Bank, knowing what assets you can easily liquidate for the down payment is key. Many buyers choose to supplement their liquidity with gifts from family, and while this is typically acceptable, receiving those funds early in the transaction will insure a smooth commitment and swift board approval. Many clients have their assets tied up in various illiquid investments (private equity funds, hedge funds and even private stock in their own companies). Although most clients consider these as part of their net worth, coops may not.
4. If Financing, Seek Pre-Approval Prior To the Property Search: Remember that although all money is green it does not all come that way. Making sure that your bid is favored above the rest, means having all of your financing pre-qualified and in writing.
5. Be Prepared to Act: Make sure you are ready to quickly submit an offer when the opportunity presents itself. If it’s the right place at market price, Go for it! In NYC no bid is final. Better to be aggressive than to lose.
6. Know Your Breaking Point: John Wollberg, Executive Director of Sales Park Avenue, offers good advice for buyers caught in a bid war. He says “Write your proposed bid price on a piece of paper and put it in an envelope overnight. The next day, evaluate how you would feel if you were to lose the apartment based on that price, every night increase that sum only to the point where you can sleep knowing you put in your best offer.”
7. Pay Attention To Taxes: Tax structures can make or break a property sale. A good realtor is knowledgeable of reputable and reliable tax data and professionals in regards to your purchase.
8. Stay Up To Date With Public And Private Developments In The Area: Paying attention to new developments and approved public projects is incredibly helpful. A savvy realtor can be of great reference for providing data not open to the public.
9. Hire a Real, Real Estate Lawyer: Even if you can have a friend work pro-bono, it may be in your best interest to consider using a proper real estate lawyer. Even the best lawyers can run into bumpy situations when it comes to NY real estate.
10. Consider The Resale Value or Investment Potential Even If Buying a Primary Residence: Although many people buy real estate with no intention of a quick resale, data has shown many New Yorkers sell for reasons irrespective of the market. One should always consider the earning potential.
And Lastly: Know when to call in the Professionals….
New York real estate is tricky and competitive. In the era of the internet, many people can and will try to find property without the aid of an agent. However, for those with extremely valuable time, a good realtor can be priceless in preventing frustrating, exhausting and sometimes scarring experiences. As a prior physician in clinical practice, I would say “sometimes you can look up your symptoms online and find the diagnosis, but there are many times when it is best to see the doctor”. Kimberly Noel is an agent in the Halstead Property Park Avenue office with a specialization in investment properties. Learn more here.