New York City is recognized worldwide for its culture, sightseeing, and opportunities. For this reason, many people aspire to own a home near the city.
But there’s a handful of information that you need to keep in mind before doing so. We’ve put together a short guide that details what you should know before you buy a home near NYC.
Decide What Type of Home You Want
As you might guess, one of the first decisions that you’ll need to make is determining what type of house you would like to purchase. In the NYC suburbs, you have a handful of options at your disposal.
Lofts - These are great for individuals who want a unique living experience, as they are located in formerly industrial buildings.
Townhouses - Although townhouses aren’t notably wide, they are often three or four stories tall and may come with rooftop access.
Detached homes - Those who want a conventional living experience should look into detached homes, which provide plenty of privacy and outdoor space.
Co-ops - As the name suggests, owners of a co-op have partial ownership of the co-op association of the property.
Condos - Similar to co-ops, those who purchase a condo are also able to secure partial ownership of various common areas of the facility.
Understand the Costs
It’s no secret that the region around New York City is a desirable area to own property. This means the housing market tends to be competitive and property ownership comes at a higher price tag, especially given the recent surge in buyer demand and historically low federal interest rates. But this hasn’t stopped thousands of buyers from closing deals on new homes.
The types of homes available to you will depend highly on your budget. You should be realistic with yourself about what you can expect to pay. The best way to determine a realistic budget is to speak with a lender and get a mortgage pre-approval.
And while properties in the NYC suburbs might come at a premium, the good news is that property near New York City will always be in demand, so you will likely have plenty of potential buyers if you want to sell your home in the future.
Understand the Best Time to Buy
Historically, the best time to purchase property near New York City is during spring or fall when inventory is highest. However, buyers often find that searching for a home during spring is more competitive, as there is usually a period of low inventory over the holiday and winter season, which leaves many buyers waiting until the warmer months to jump upon new listings.
If you are on a particularly tight budget, you can often find better deals during the fall. Inventory leftover from earlier parts of the year is likely still available at a better price.
If possible, it’s best to avoid purchasing a home during the winter. There are far fewer listings, which means that prices could be higher. Yet some buyers prefer to buy during this time as there is less competition.
Consider Your Down Payment
Due to the high cost of property around New York City, many people struggle to come up with a sufficient down payment. While putting down 20% is ideal, it’s not required. In fact, the average first time home buyer puts down just seven percent.
There are certain benefits to putting 20% down. Not only will a higher down payment make it easier for you to find a lender, but it will also drastically reduce the amount that you pay in interest. Lower down payments also come with the responsibility of securing private mortgage insurance (PMI). This is put into place to protect the lender in case you stop making payments on the money that you borrowed. More specifically, you will have to pay for this insurance until you have accumulated at least 20% equity in your home. To avoid PMI, it is best to get as close to putting 20% down as possible before moving forward.
For those who don’t want to put down 20%, there are still many options available. Speaking to a lender can help you determine what down payment amount makes most sense for you.
You May Get Into a Bidding War
As previously mentioned, the real estate market near New York City is highly competitive. So, you shouldn’t be surprised if you get into a bidding war with another buyer. Although you can’t always combat the situation, being flexible as a buyer can cause a seller to be more interested in working with you.
Although this can seem intimidating to handle, bidding wars are simply part of the process. Working with an agent can help you navigate this part of the process and ensure you are submitting your most competitive offer.
Work With a Professional
There are many nuances associated with buying a house, and there are plenty of others that are unique to the area around New York City. So, it’s in your best interest to use an agent when navigating the real estate market. As a buyer, a real estate agent’s services will not cost you anything, as commission fees are paid by the seller.
We hope the above information can help make your home buying journey go far more smoothly. Want to learn more about what we have to offer? Feel free to reach out to us today and see how we can help.