The current residential market is very familiar: low inventory and pent up demand. Even mediocre apartments are the subjects of bidding wars. We sold all of our inventory recently (not complaining, to be sure) and we have a lot of buyers waiting to pounce on the perfect apartment. I'm telling all of them the same thing: Get Ready!!!!
What does that mean from a buyer's perspective? Let's review...if you need a mortgage, get all your ducks in a row. Speak to a mortgage broker or a bank about how much you'll be able to finance. Get pre-approved if you can for said amount. If you can't get pre-approved, at least get pre-qualified. These days many sellers are able to get all cash deals or at least a non-contingent deal on their property.
What does that mean? That means that you as a buyer are willing to waive the mortgage contingency that's often found in the contract of sale...that you will be on the hook for purchasing the apartment, regardless of whether or not you can secure the mortgage. It means that you need a back up plan if you don't get a mortgage or you risk losing your deposit.
An all cash or non-contingent offer puts a buyer in a much stronger position, assuming that their offer is also competitive. People often misinterpret a cash deal, in that they think they can offer far less for an apartment. While that may be true on occasion, it's simply not going to work in the current market.
What do I mean by current market? NYC seems to have 2 general selling seasons: Spring and Fall. The spring season starts in February, and the market sees a lot of new inventory in March and April. People have gotten their bonuses, kids have been accepted to schools, people want to be moved in before the school year starts, or just after the school year finishes in June. If you go to contact in March or April, June is a natural move out date.
September is the next big push. School has started again, people have returned from their vacations, and they start thinking about a bigger place/different place/better place. The market is very active until about Thanksgiving and dies down again through the holidays.
Back to getting prepared...as a buyer, you need to have a financial form filled out and ready to go showing your income, your assets and your debt. This is usually something that your broker will have to submit when submitting an offer. In my firm, we don't look at an offer with a REBNY financial form. If you want to see what one looks like, go here:
http://www.comitini.com/pdf/REBNY%20Financial%20Statement.pdf
Last piece of advice for a buyer: go see everything you can so that you'll know the right thing when you see it. If you've only seen a couple of apartments, you might let a gem slip away. In this market, that's a big mistake.
Sunday, March 30, 2014
Subscribe to:
Posts (Atom)