7 Things to Know About New York’s Luxury Real Estate Market

1. You do NOT have to spend a lot of money. (Relatively speaking.)

There are many strategies for those who want to buy luxury real estate in New York City but do not want to spend an exorbitant amount of money. One way is to buy a unit on a lower floor of a luxury building. A second floor unit can cost up to 19% more than a comparable first floor unit. Another option is to look for units with higher maintenance or common charges per month, since they tend to have lower sales prices. Alternatively, some lines in a building may be priced higher than others…for example, a line of units with windowed bathrooms will sell for much more on the open market than a line whose bathrooms are lighted by fixtures only.

2. Get approval from the bank.

If you need a mortgage to buy luxury real estate in New York City, you’ll want to get a mortgage approval letter from your bank stating the amount of the home loan you’re approved for. Smart 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 view a property under bank approval requirements.

3. Know your terms.

In the real estate industry, “terms” refer to the stipulations under which the money is delivered. For ATMs, this relates, among other things, to the number of days it takes to close. For mortgage holders, it refers to their interest percentages, as well as the time needed to obtain the funds from the bank and transfer them to the corresponding TRUST account. In a real estate transaction, the terms are just as important as the cash, because they dictate to the sellers under what conditions they will obtain to recover their original purchase price. Knowing the terms inside and out 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 people start their real estate search online. In New York City, home of the smart shopper, more than 90% of buyers and renters begin their search online. The importance of doing your own research is to stay ahead of your competition – other ready, willing and able buyers. Each New York City luxury building has its own buying rules and its own services to offer. Each area of ​​Manhattan has its own disadvantages, quirks, and advantages. And not all real estate agents or brokers are the same. You’ll want to do some preliminary research to stay ahead of YOUR competition: other ready, willing and able buyers. Which brings us to our next point…

5. The competition IS fierce.

You’ve probably heard this adage before regarding the New York City rental market: bring a certified check from a bank, and be prepared to close on a rental unit you like as soon as you see it, because the next person who sees it you could just clip it under your nose. A similar fervor applies to the New York City buyer’s market, especially for luxury real estate in New York City. International buyers who pay all cash are probably your strongest competition in the New York City luxury market. They can walk in and say “I do,” and cash buyers can close in as little as two weeks. Know your own financial situation and know how quickly you are ready to move into a property you like. The ability to move quickly to ESCROW will give you a significant advantage over other buyers.

6. You NEED a competent broker.

Just because a property falls under the luxury umbrella doesn’t necessarily mean it’s problem-free. Structural issues, such as inadequate weight-bearing pillars and roof issues, evidence of water damage and mold, or plumbing and HVAC issues, are just a few of the issues one can encounter in any property. That’s why it’s integral that one perform a home inspection before signing on the dotted line. Most importantly, make sure your purchase contract includes a home inspection contingency, that is, a statement that allows you to freely walk out of the property if the inspector finds a problem with it. A competent broker will also not waste your time or his own by showing you unsatisfactory properties.

7. The New York City luxury real estate market never really fell.

The New York City real estate market is a market unto itself, comparable to no other in the United States. Play by your own level of supply and demand rules. International demand for luxury real estate in New York City continues to be one of the main reasons why Manhattan prices are so high compared to other areas. REBNY reported that 2012 was the most successful year (over $30 billion in property sales) for New York City real estate since 2008. REBNY also reported that broker confidence in the market has been higher in January than 2013 than any month in 2012. Sales figures at most brokerage firms point to the fact that we are continuing the trend toward a seller’s market, as sellers and cooperative boards continue to be able to choose from a pool of potential buyers. . Know that the New York City luxury real estate market is by no means depressed, and factor this knowledge into your approach to buying.