Being an adult is hard enough with the added stress of home ownership. But according to my Guide to Being A Grown Up, step 3 (after waking up without hitting the snooze button and drinking responsibly) is Buy your First Home. Which is scary, so we asked for help. Meet Maria Velazquez, one of our fave New York City real estate agents who is giving us all the tea on what you need you need to know before you buy.
Buying a home — especially in New York City — is no small undertaking. And we’re not just talking about the price. The paperwork, calculating mortgage rates, learning the lingo and the overall home buying process can often feel next-level confusing. In the hopes of demystifying this undertaking, I’m breaking down seven key things to know about first time home buying, below. Enjoy and happy house hunting!
— Maria Velazquez
1. Save. And Then Save Some More.
Considering that a down payment on an apartment in Brooklyn or Manhattan will generally be 20% of the purchase price, saving as much as you can before you buy is absolutely essential. To put that in numbers, the median sales price in Brooklyn last quarter was recorded at $770,000, which means the median size of a down payment for Brooklyn buyers was $154,000. Meanwhile in Manhattan, the median sales price was last recorded at $999,000, which translates to a down payment of $199,800. It’s also important to consider that closing costs will generally add an additional 3 to 5.5% to the purchase price — and these costs will need to be paid in cash.
2. Get Your Pre-Approval Sorted
So you think you know what you can afford? I hate to break it to you, but you’re probably mistaken. The reality is you can only know what you can *actually* afford after you’ve spoken with a mortgage broker, worked through your pre-approval, and have the necessary cash sitting in your bank account. For those unfamiliar with the pre-approval process: it’s short, sweet and absolutely crucial. In short, a lender will verify your income, run your credit and ask about your existing assets and liabilities. It takes about 24 to 48 hours, and it’s what helps you get a realistic sense of the most amount of money you can afford to spend. Of course, that doesn’t mean you’ll want to buy the most expensive apartment you can — but a pre-approval just lets you know what is actually possible so you’ll have a realistic sense of what type of apartments you should actually go out and see.
3. Do Your Homework
Being informed is key. Following the market trends and the economy is essential in order to make a good choice and have peace of mind when it comes to your purchase. Nowadays there are plenty of websites available to help keep you informed and understand what is happening out there. Here are some of my favorite resources: Velazquez Team Blog, Curbed New York, The Real Deal, Brick Underground and Miller Samuel Inc
4. Remember to Keep an Open Mind
If you’re looking for the perfect place, stop now — you’ll never find it. It’s important to have a wish list of things you really want, but it’s equally as important to be willing to start sorting out your wants from your absolute needs. Generally speaking, finding the right apartment will require a balancing act between location, size and price. The worst decision a first-time apartment buyer can make is to take their foot off the gas pedal, thinking they can’t find the perfect place, and resign themselves to signing another year’s lease. Be open to different neighborhoods and different types of apartments. If you keep your eyes open, you might find an apartment that suits you better than you thought!
5. Keep Your Eyes Open for Tax Abatement
In short, a tax abatement is when the government grants a reduction or exemption from taxes for a specific period in order to stimulate real estate or industrial development. This will save you a lot of money when you are looking to buy real estate in New York. You can read more about New York City’s tax abatement requirements here.
6. Consider a Buyer’s Broker
When you’re dealing with one of the largest investments you’ll ever make (in the near term), it makes sense to have someone on your side that will treat it as such. It makes even more sense when you begin to realize that a buyer’s broker doesn’t actually cost you anything, and is generally compensated by the commission split with the listing broker. Plus, a broker will be able to help you navigate through the entire search and purchase process including submitting your offers, negotiating the price and terms, connecting you with lenders and lawyers, as well as preparing all of the necessary paperwork.
7. Lastly, Don’t Give Up
Demand for apartments in Brooklyn and Manhattan is always high — especially for affordable multi-bedroom apartments. With more supply and a higher share of price cuts than past home-shopping seasons, buyers have reason to remain confident despite all of the competition out there. According to Senior Economist Grant Long, “buyers are in a strong position to strike a deal and can afford to shop around, wait for the right home and negotiate aggressively.” Despite this, it’s important to remember that New York City is nonetheless one of the most competitive real estate markets in the country. Losing out is often part of the process, and while frustrating, it shouldn’t be treated as a setback. Instead think of it as an opportunity to refocus and hit the pavement again, this time with even more determination.
Maria Velazquez came to New York City 15 years ago for a two-week stay and never left. She fell in love with the city and all it stood for, from there she went for her Real Estate license and the rest is history. Maria, who is a seasoned real estate veteran with more than 15 years selling luxury properties under her belt, is more than just a broker. Her success in residential sales stems from her belief that a broker does more than rent the property, she guides her clients to the best possible outcomes suited for their financial and lifestyle needs. In addition to her business, Maria is also a sommelier and a self-proclaimed foodie, she enjoyed cooking, entertaining, and exploring new restaurants. She actually came to the United States from Colombia at the age of 17 to pursue a career in the culinary arts, receiving a degree in Dietetics from Miami Dade College and a Culinary Arts Degree from Florida International University, School of Restaurant Management.