BUYING WITH YOUR HEAD AND YOUR HEART!
Buying your 1st or your 10th New York City apartment will probably be the biggest purchase of your life. In today’s market it’s more important now than ever to understand what your long term goals for purchasing. Are you sick of paying rent to a landlord and purchasing your first starter studio or 1 bedroom? Maybe you have outgrown your current apartment and need that second or third bedroom? An investor looking for a long term investment and tax benefit? Or an overseas buyer looking for a second home here in Manhattan. Whatever the reason might be, the key to a successful purchase and ultimately long term success is to become educated about purchasing and to find an apartment that you can see yourself owning for the long term.
Steps to a Successful Purchase
Understand Why You are Purchasing – Are you looking for an apartment that you can lease once your purchase? Well than a co-op might not work for you and a condominium would be your best option. Are you renting right now and want to find out if it makes sense to buy and stop putting money in your landlords pocket? A rent vs. purchase analysis might show that it makes more sense for you to rent, but the qualitative benefits of owning your own apartment could also affect your decision. How long do you plan on being in the apartment? One year or indefinitely? Right now in this market, you should plan on owning for a minimum of 5 years to see a significant amount of appreciation. The key is to think about what your long term goals are for purchasing because that should dictate what type of property is right for you and how you should go about your search for your next home.
How Much Can you Afford – Speaking with a mortgage broker or the bank of your choosing and having an in depth discussion of how much you can afford will have tremendous impact on your purchase. Because lending isn’t what it was a year or even 6 months ago, guidelines changing, conforming loan rates changing, having an up to date understanding of where you stand obtaining a mortgage is essential to a successful purchase.
Becoming Market Educated- Currently Manhattan is a changing market. How much is an apartment worth today? One market report says that median prices went up a few percent, but another report says that the transactions are down 70%. Who to believe and what does it mean to you? Looking at the city as a whole will give you a macro-perspective, but the key in my opinion is to follow the price point and neighborhoods that you are going to purchase in. A one bedroom condominium in the West Village and a Classic 6 in a Park Avenue co-op are not apple to apple comparisons, so reading a report that says prices are down 20% citywide, may not be indicative of the type of property you are looking for. The way I see things is that right now, an apartment is worth the price a buyer is willing to pay and whatever the seller is willing to accept. I find market reports extremely useful, but the key is to break them down for the micro-search that you are doing.
Go with your Gut Instinct- Most of my customers know the apartment they will buy when they step their foot in the door. Ask yourself the question, do you love the apartment, can you see yourself living there? The perfect apartment doesn’t exist, because it is usually out of our price range, but first impressions are very important. Once you have educated yourself and understand the variables of your purchase you will be ready when you see the right apartment.
