1. You DON’T have to spend a ton of money. (Relatively speaking.)
Plenty of strategies exist for those who want to purchase NYC luxury real estate but don’t want to spend an exorbitant amount of money. One way is to purchase 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 common 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 instance, 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 purchase a NYC luxury real estate property, 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 properties 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 property 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 as well as time needed to obtain the funds from the bank and transfer 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 purchase 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 purchase 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 property you like. The ability to quickly move into ESCROW will give you a significant advantage against other buyers.
6. You NEED a competent broker.
Just because a property falls under the luxury umbrella, does not necessarily mean 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 property. 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 purchase includes a home inspection contingency, i.e. a statement that permits you to freely walk away from the property if the inspector finds a problem with it. A competent broker also won’t waste your time or their own by showing you properties that aren’t satisfactory.