7 Things You Should Know About the NYC Luxury Real Estate Market
1. You DON’T have to use a ton of money. (comparatively speaking.)
Plenty of strategies exist for those who want to buy NYC luxury real estate but don’t want to use an expensive amount of money. One way is to buy a unit in a lower floor of a luxury building. A second floor unit can cost as much as 19% more than a comparable unit on the first floor. Another option is to seek units with higher maintenance or shared charges per month, as those often have lower asking prices. Alternatively, some lines in a building can carry a higher price tag than others… for example, a unit line with windowed bathrooms will fetch much more on the open market than a line whose bathrooms are lit only by fixtures.
2. Get Bank-Approved.
If you need a mortgage to buy a NYC luxury real estate character, you will want to get a mortgage approval letter from your bank stating the amount of mortgage loan for which you are approved. Savvy sellers can legally tell their brokers to only show similarities to buyers who are “bank-approved.” A bank qualification letter is not the same as an approval letter, and will not qualify you to see a character under bank-approval requirements.
3. Know Your Terms.
In the real estate industry, “terms” refers to the stipulations under which money is given. For cash-closers, this relates to among other things, how many days needed to close. For mortgage holders, it refers to your percentages for interest in addition as time needed to acquire the funds from the bank and move them into the appropriate ESCROW account. In a real estate transaction, terms are equally as important as cash, because they dictate to sellers under what conditions they will get to recoup their original buy price. If you know your terms inside and out, it will make it easier for your broker or agent to negotiate with sellers for you.
4. You CAN do your own research, and you probably should.
According to the National Association of Realtors, 88% of individuals start their real estate search online. In New York City, home of the savvy shopper, over 90% of buyers and renters start their search online. The importance of doing your own research is to be ahead of your competition – other ready, willing and able buyers. Each NYC luxury building has its own rules for buy and its own amenities to offer. Each area of Manhattan has its own disadvantages, quirks and advantages. And not every real estate agent or broker is equal. You will want to some conduct some preliminary research in order to stay ahead of YOUR competition – other ready, willing and able buyers. Which brings us to our next point…
5. Competition IS fierce.
You’ve probably heard this adage before in regards to the NYC Rental market: bring a bank-certified check with you and be ready to close on a rental unit you like as soon as you see it, because the next person to see it might just snag it from under your nose. Similar fervor applies to the NYC buyers’ market, especially for luxury NYC real estate. International all-cash buyers are most likely your strongest competition in the NYC luxury market. They can walk right in and say “I’ll take it,” and cash buyers can close in as little as two weeks. Know your own financial situation, and know just how quickly you are ready to move on a character you like. The ability to quickly move into ESCROW will give you a meaningful advantage against other buyers.
6. You NEED a competent broker.
Just because a character falls under the luxury umbrella, does not necessarily average that it is problem-free. Structural problems such as improper weight baring pillars and roofing issues, evidence of water damage and mold, or piping and HVAC problems are just some of the problems one can find in any character. That is why it is integral that one conducts a home inspection before signing on the dotted line. Most importantly, make sure your contract for buy includes a home inspection contingency, i.e. a statement that permits you to freely walk away from the character if the inspector finds a problem with it. A competent broker also won’t waste your time or their own by showing you similarities that aren’t satisfactory.
7. The NYC Luxury Real Estate Market never really dipped.
The New York City real estate market is a market unto itself, comparable to none other in the United States. It plays by its own level of supply and need rules. International need for NYC luxury real estate continues to be one meaningful reason why Manhattan prices are so high compared to other areas. REBNY reported that 2012 was the most successful year (over $30 billion in character sales) for NYC real estate since 2008. REBNY also reported that broker confidence in the market has been higher in January 2013 than in any month of 2012. Sales numbers across most brokerages point to the fact that we are continuing to trend towards a sellers’ market, as sellers and co-op boards continue to be able to pick and choose among a pool of possible buyers. Know that the NYC luxury real estate market is not depressed by any method and factor this knowledge into your approach to buy.