Feeling anxious about first-time home buying? Say no more!
We've connected with Real Estate Expert, Samantha Germano, who knows what it takes to successfully purchase a home in the ever-changing market of New York City.
Below are Samantha’s insider tips and tricks for how to navigate through this exciting *not scary* new chapter of your life!
The biggest misconception that many first-time buyers have is that they’ll have to pay to use an agent to help them find a home. Let’s set the record straight here, using a buyer’s agent is FREE. Using a buyer’s agent will save you a lot of time and money in the long run. I always make a joke to my clients that they have their jobs that they’re experts at, so let me do my job and alleviate the stresses of home buying for you! Not only are we trusted authorities in the real estate market, but we know all the right questions to ask during showings to ensure you’re making a safe investment. A lot of first-time buyers don’t understand the nuances of a land lease building, don’t think to ask about assessments, or ask the percentage of real estate taxes in the maintenance charges of a co-op building. Along the way, we advocate to seller’s agents for buyers, negotiate on their behalf, make fast and direct introductions to trusted attorneys, inspectors, contractors, etc. and get you everything you need to make the entire process from searching to closing clean, calm and seamless. We’re like the fairy-godmothers of Real Estate!
One of the most important tips here! First and foremost, decide whether you’ll be taking out a loan or paying all cash. If you are financing, consult a mortgage broker who will factor in your income and credit history and tell you how much the bank will lend you. The reason why this is so crucial is that it allows you to set a budget that is aligned with what the bank can loan you. Once you’ve been pre-approved, make sure your pre-approval letter approves you for your maximum budget. Otherwise, you’ll be left running back to the bank asking for a new pre-approval letter if you’re putting in an offer for an apartment above that price. Having your pre-approval letter handy allows listing agents to know how serious you are as a buyer and helps expedite the offer process.
Before starting your home search, make a list of what you absolutely need in your home and then a list of what you’d like to have in your home, but aren’t complete deal-breakers. I always tell clients my job is to check off all of their need boxes and most, if not all, of their want boxes. That way, they’ll feel much more comfortable and confident putting pen to paper when you sign a contract. Making a needs vs. wants list helps people understand what’s truly going to matter to them and affect them on a day-to-day basis. Wishlists are great, but compartmentalizing it will save you time and make your search more strategic.
While many first-time buyers go into their search with a budget in mind, it’s important to consider the incremental costs that will come up along the way to avoid any surprises. In a standard real estate transaction, you’ll want to factor in the costs to use an attorney, the board package fees, insurance, and any government-related fees. If you’re financing there’ll be fees associated with taking out a loan as well. The three “taxes” to be aware of are mansion tax, transfer tax, and mortgage recording tax. If you’re purchasing a home of over $1M, there’ll be state and city taxes associated with that transaction and if you’re purchasing an apartment in a new development that’s being sold from the sponsor, you’ll need to pay the transfer tax on that as well. If you’re purchasing a condo there will be a tax associated with documenting the loan transaction within the state. And don’t forget about the costs of the maintenance or the common charges for the apartment! Not to worry though, just be sure to have this conversation upfront with your agent so there is full transparency in the process.
When you purchase real estate in New York City, you’ll most likely be buying an apartment in a condominium or a cooperative building (condo and co-op for short). Within New York City’s housing market, co-op’s make up 75% and condos make up 25% of it, so it’s important to know the nuances of each of these types of buildings. The most notable difference between the two is the price; co-ops are typically cheaper and condos are usually more expensive. The reason being is that when you purchase a condo, you’re buying real property that you have direct ownership of and own all the rights of. On the other hand, when purchasing a co-op, you’re buying shares of that corporation that’s run by a board. Some of the factors to take into consideration when deciding which way you’re going to go is whether or not you’ll eventually want to sublease or sublet it, undergo a rigorous approval process to apply for the apartment, or be in a building that is all owner-occupied or renter and owner-occupied.
A lot of first-time buyers go into the home search process with their “list” and forget to factor in their lifestyle or think about the neighborhoods they naturally gravitate towards. Understanding the areas you want to search in are so important. I always ask buyers to share with me what a typical Saturday looks like for them, where they find themselves, why they’re drawn to go to those neighborhoods, etc. Most of the time, they’re not neighborhoods they thought to consider and later purchase a home in. Things to think about are whether you like to live in more residential or commercial areas, do you want to be in an up-and-coming neighborhood or one that’s already established, or do you find yourself wanting quiet at the end of the day and don’t want to be in an area where there’s constant foot traffic. Or even from an aesthetic perspective, are you someone who wants to be surrounded by cobblestone streets and independent businesses or new developments and highrise buildings? These are very important questions to ask yourself when buying a new home!
There are some buyers who need 3+ months to find an apartment and there are some who need a week. Everyone’s home buying journey is different and as the saying goes “when you know, you know”. I know it sounds cheesy, but trust us on this one. Many times, buyers fixate on certain things they don’t like about an apartment, which is fair given that purchasing a home is a huge investment. However, I always say that if it’s something that can’t be changed, for example, a loud and long construction project across the street, then that’s one type of conversation, but if it’s a matter of thinking outside the box and adjusting a few things within the apartment to get it to where you need to be, then that’s another type of conversation.
If an apartment has good bones and a strong foundation and there are certain cosmetic things you can do, for example installing the dream tub you’ve always wanted but the apartment doesn’t have, then it’s worth fighting for! Nevertheless, I always encourage clients to go with the apartment where they walk in and feel something because that’s the feeling you’re going to be getting every day in that home.
Most importantly, be patient! The housing market is fluid and ever-changing so just because your dream home isn’t available now, doesn’t mean it won’t come on the market the following week. This is where a buyer’s agent comes in handy - we tap into our network of trusted agents who may have an off-market listing or an apartment that’s about to hit the market. We scour the NYC real estate landscape to do just the job that got us into this industry in the first place; to find you the New York City apartment you’ve always dreamed of.
Photography by: Courtesy Samantha Germano, Courtney Cook, Phillip Berndt, Glen Carstens Peters, Scott Graham, Maria Ziegler, Austin Distel, Photo by Brad Javernick of Home Oomph