“People who just started searching for a property to purchase are really excited and they ask a ton of questions,” states Robyn Giannini, an integral part of the Member Experience Team and a sales specialist at Triplemint. She spends her days talking to homebuyers and answering their most pressing questions. And you should ask! As we all learned in school, asking questions is the best way to gather as much information as possible.
To make it even easier for you to come up with the right questions, we talked to our experts here at Triplemint to find out what the most pressing homebuying questions are.
What Can I Get For My Budget?
Let’s talk about money straight away. For most buyers, the number one factor that decides what kind of apartment they’ll purchase is their financial situation.
“I talk to a lot of people who have specific budgets and expectations and I need to make sure they line up with what the NYC housing market has to offer,” explains Robyn. This process can be heartbreaking at times, she admits, especially for people from out of town who aren’t yet familiar with the New York City pricing and inventory.
Tyler Whitman, Triplemint sales agent and Head of the Whitman Team, names three factors that tie into each other when determining your budget and needs. “It’s all about location, their budget, and the amenities they’re looking for,” he tells us. “New York is location, location, location; it’s the number one variable for pricing for a space. My client and I need to make sure we’re on the same page about where they want to live and if it aligns with their budget.”
What Will My Return On Investment Be?
“As opposed to primary residents, real estate investors don’t look out for location as much, as long as they’ll be able to get a good return on investment,” says Robyn.
Tyler makes sure that his clients know that it usually takes at least five to seven years for a home to appreciate to a point where the purchase was worth it. “A property has to appreciate by at least 10 percent for you to break even, due to closing costs at the time of purchase,” he explains.
However, New York City does have one of the strongest appreciations in value compared to other U.S. cities, which makes it a great place to invest in.
While it’s hard to determine how much your property will appreciate, it’s always helpful to look at the apartment’s transaction history or to compare its sales price to other apartments with similar specs, both Robyn and Tyler suggest.
Do I Need to Get Pre-Approved Before Looking at Listings?
Some of you may shake your head at this question and think to yourselves, “why would I?” However, this is actually a legitimate concern.
Tyler spells it out for us: “The answer is always yes. The real estate market is really competitive. Sellers require you to send in your pre-approval with an offer letter. It happens all the time that buyers lose their dream apartment because they haven’t been pre-approved yet.”
Furthermore, there are always things that come up as a surprise, so some people might be more qualified than they originally thought, and vice versa. “It’s always a good idea to loop in a mortgage professional as soon as possible, to find out what kind of loan you’ll be looking at,” says Tyler.
Robyn has more to add: “Even if you’re an all-cash buyer, a pre-approval will still be necessary for the purchase to go through.” Even if you have enough money to buy, you’ll still have to prove your two-year post-closing liquidity to the seller or co-op board, since you’ll have to pay maintenance fees and taxes each month.
How Long is the Home Search Going to Take?
“In general, it takes about three to six months to find a new home, put in an offer, close it, and be ready to move in,” Robyn lays out for us.
Here are the details: “Closing on a home takes at least three months because it takes a few weeks to negotiate an offer and get the contract set up, plus the time you’ll spend apartment hunting.” That said, it always depends on how committed you are to the search and how intensely you plan on attending a variety of open houses.
Robyn has another hot tip for you. “If you’re moving from renting to buying and you didn’t find a place on time or need more time to move, you can always negotiate with your landlord to extend your lease by a month or even convert it to a month-to-month basis,” she suggests.
Co-Op or Condo?
If you’ve been tossing and turning in bed, trying to figure out whether a co-op or condo is right for you, fear no more. It’s such a broad topic that we decided to answer it in two separate articles, one focusing on condos and the other one on co-ops.
However, we don’t want to keep Tyler’s and Robyn’s insights on it from you: “80 percent of the market are co-ops, so there is much more inventory. Additionally, co-ops are more affordable than condos. Lots of people believe it’s harder to get approved for a co-op, but that’s not necessarily true. If you’re a U.S. citizen and all your finances check out, it won’t be more difficult to score a co-op versus a condo,” says Robyn. Tyler elaborates more on that: “If you have enough liquidity to buy a co-op and you’re using it as your primary residence, there’s no reason not to opt for it. You’ll get so much more for your money with a co-op.”
The reason why he mentions primary residence is the fact that co-ops aren’t as flexible as condos, meaning that many investors go for condos because they can sublet them out. Robyn explains, “If you’re a foreign investor who might have trouble getting through the co-op application process, plus you’re looking to rent the property out immediately, condos will be more flexible. However, that flexibility comes with a premium.”