How To Buy A House In New York

Can A Foreigner Buy Property In New York

Yes, absolutely! Foreigners from all over the world buy property in Manhattan, New York as part of their asset diversification strategy. Manhattan and London are deemed the worlds most global cities, at the rating of Alpha++, by the GaWC. Foreigners buy in New York because they want stable price appreciation. Manhattan is a landlocked island so supply of property is very limited. That is a reason behind the stable appreciation in Manhattan. Investing in Manhattan property, profiting and repeating is the foundation of many real estate dynasties in New York.

Read about Wei Mins style inBest Manhattan property agentsand Role of a buyers broker.

Ithaca Neighborhood Housing Services Due On Sale Assistance

This grant program provides up to $30,000 for down payment and closing costs. Funds are provided in the form of a no-interest loan, but the full amount must be repaid if the property is sold. In addition to meeting general eligibility requirements, the property must be located in Tompkins County , cost $165,000 or less and pass an inspection by Ithaca Neighborhood Housing Services.

Cost Of Renting In New York

The high cost of living in NYC starts with its crazy housing market. According to a March 2019 report from Apartment List, the median rent for a two bedroom apartment is $2,499 in New York city. Studio and one bedroom apartments come in at $1,889 and $2,098 a month, respectively.

Each of these rents are far more expensive than not only the U.S. median, but most of the worlds large cities. Apartment Lists data has the national median rent for studios, one bedrooms and two bedrooms at $827, $947 and $1,175, respectively. Thats a $1,062 difference for a studio apartment, a $1,151 deviation for a one bedroom apartment and, lastly, a $1,324 split for a two bedroom apartment. Needless to say, New York is ridiculously expensive to rent in.

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Capital Gains Taxes In New York

The most important tax issue to be aware of when buying or selling a home in New York is capital gains. Capital gains are defined as the profits you make as a result of a real estate or property purchase. You can think of it as the difference between the selling price and the purchase price.

The amount of capital gains tax on your sale depends on various numbers and conditions. They include everything from the condition of the property to whether or not the buyer is a legal resident of the United States. Each different adjusts the percentage. There are also plenty of deductions available, including the fees paid for the origination of the loan application, closing costs, and points paid back on a loan to get a lower rate on the mortgage.

Generally speaking, capital gains taxes are around 15 percent for U.S. residents living in the State of New York. If the hose is located within New York City, you have to account for another 10% in NYC taxes. However, its possible that you qualify for an exemption.

If the house was the sellers primary residence for at least two years within the last five years, capital gains are limited to $250,000 for an individual and $500,000 for a married couple.

One of the key takeaways from all of this is that it benefits the owner to live in the residence for at least two years before deciding to sell the house. If you do, you will have more time to reinvest the capital gain from the sale of the house.

What Is A Starter Home

A starter home is a house that is the first property a person or family can afford to buy. Essentially it is an entry-level property for first-time homebuyers. These homes are usually smaller, costing on average $150,000 to $250,000 and can be bought with their savings and mortgage.

The concept of a starter home is for buyers to live there a few years before purchasing a larger, more expensive forever home.

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Perform A Home Inspection

When it comes to buying property in NYC, as part of your offer, youll definitely want to include a provision stating that the home inspection must pass before entering into contract.

A home inspection is an assessment of a homes condition. Home inspectors not only identify problems with houses, they can give buyers information that will help them with the upkeep. In fact, if you ask any realtor or attorney, a home inspection is one of the most important requirements to buy a house in NY.

In performing a home inspection, the first thing you need to do is research the home inspector youll be using. In addition to hiring a home inspector that is certified, youll want to ask the inspector

• How long have you been inspecting homes?
• How many inspections have you done?
• What are your qualifications, certifications and training?
• What was your job before you were a home inspector?

Another good tip when it comes to home inspection is to be personally present at the inspection. Simply reading the inspection report isnt enough to give most homeowners the full picture. If you dont see the problem and be present for the inspector to physically show it to you, you most likely wont comprehend the full scale of the problem with the home.

Buying A House In Nyc Vs An Apartment

Why are you buying a house in NYC vs an apartment?

Is it because youve heard or experienced horror stories about overly nosy or bossy neighbors in co-op buildings? Are you buying a house in NYC because you want your own private backyard? Or is it because you want some rental income on the side so youre looking at multi-family townhouses?

Are you aware of the additional responsibilities involved with buying a house in NYC?

Do you realize that youll be solely responsible for the condition and maintenance of an entire building? That means fixing roof leaks and broken boilers.

Are you an enthusiastic do it yourself kind of person? Do you have a handyman in the family or your circle of friends? Give yourself a few moments of introspection and really think about why you are buying a house in NYC vs a co op or condo apartment.

There will generally be a lot more apartments for sale, depending on where in NYC youre looking to purchase.

For example, most of Manhattans inventory will consist of apartments and you will rarely find a free-standing house. While you will be able to find some attached townhouses, they will generally be exorbitantly expensive in Manhattan. However, many parts of the Upper West Side and Harlem close to the Hudson River will indeed have rows upon rows of townhouses, though they will still be expensive.

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Costs For A Foreigner At Purchase:

To keep it simple, transaction costs at purchase is about 2 percent of property price for an all-cash purchase. 1 percent goes to mansion tax, 0.5 percent goes to title insurance and the remaining 0.5 percent goes to all others .

If there is a mortgage involved, the costs are about 6 percent of the mortgage loan. Notice I changed it from a function of property price in the above example to now a function of loan in this example. Reason is that, with a mortgage, there is a mortgage tax of 2 percent of loan. Hence if we convert everything to a function of the loan, it works out to about 6 percent of loan.

Deal Example: Greenwich Club in FiDi. Building is one block south of the World Trade Center, hence benefiting from demand coming from employees working at the WTC. The WTC comprises 4 buildings and a performance center is in development. The area has transformed since buyer client bought the apartment. Dual West/South exposures and double height, 17 feet, ceilings. Always rented with premium rents to owner due to the dramatic views and high ceilings.

Know Youre Not Legally Bound Until The Contract Is Signed

If youve made a verbal offer on your new home, youre not legally required to follow through with the transaction. In New York state, its not until you sign a contract of sale that youre legally bound to purchase the property.

However, once you sign the binding contract, assuming all contingencies have been met, you must buy the home or forfeit your earnest money deposit.

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How To Buy A House In New York City

Buying a home in New York is a big challenge. We are here to help you through every step of the process. Let’s get started!

Buying a home in New York Citybe it a co-op in Manhattan, condo in Brooklyn, or a house in the Bronxmight seem like an impossible dream. But get this: According to U.S. Census numbers, 54% of New York City’s housing is owner-occupied. If half of New Yorkers can buy a house, its entirely possible that you can afford a mortgage and buy real estate here, too.

But first-time home buyers should know that buying real estate in a New York neighborhood is different from anywhere else. This market operates by its own rules for loan down payments, mortgage brokers, estate attorneys, common charges, real estate taxes, and more. Thats where realtor.coms Guide to Buying a House in New York City can help, highlighting info about Manhattan co-ops, Brooklyn condos, Queens townhouses, and beyond. Read on to learn what first-time home buyers in New York need to buy their first home.

Home Down Payment Assistance Grant Program

This program is designed to help offset the cost of buying a home in Albany County. The Albany County Rural Housing Alliance, or ACRHA, provides funds in the form of a 10-year forgivable loan. The amount of assistance provided depends on applicant need and income. In addition to meeting general eligibility requirements, applicants must be able to contribute $1,500 of their own funds. The propertys purchase price cannot exceed $190,000, and the home must be located outside the city of Albany.

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What Salary Do You Need To Buy A Home Today

There are a lot of variables that come into play when it comes to figuring out how much house you can afford, and the only way to know for sure is to talk to a lender to review your actual salary, cash, credit and rates. But we crunched some numbers in order to give a general snapshot of the earning power required to become a homebuyer in 24 different U.S. metro areas.

Using the median home price in each city , a 20 percent down payment, and the current 30-year fixed-rate interest rate, and Bankrates mortgage calculator, we were able to determine the total salary required to afford the base cost of owning a homethe principal, interest, taxes and insurancein each area.

Heres how it shakes out nationally:

Be Prepared To Make A Down Payment At Signing

Regardless of whether youre getting a mortgage, you must make a down payment at signing. This down payment, which is typically 10% of the purchase price but can be lower, acts as your earnest money deposit. You pay it when you sign the contract of sale to demonstrate your intention of following through with the purchase.

If the seller accepts your offer and signs the contract, this down payment is applied to the purchase price of your home. However, if the seller doesnt accept your offer, the funds are returned to you immediately.

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Housing Opportunities Foundation Grant

Offered through the New York State Association of Realtors and the Community Foundation for the Greater Capital Region, this grant program provides $2,000 to help first-time home buyers cover their down payment and closing costs. The grant is a gift, and if awarded, theres no obligation to repay it. The grant is available only to buyers in New York state who are working with a real estate agent. Grants are awarded through a monthly lottery of qualified applicants. Those who are denied can apply again the next month.

Visit The State/area Youre Interested In Moving To

In light of the pandemic, visiting your potential our-of-state dream home has taken a markedly different turn. Instead of in-person visits, virtual visits have become the norm on many home listing sites. According to a recent report from Redfin, approximately 63% of buyers made an offer on a home they hadnt seen in person. In 2019, that total was just 32%.

To research the area youre thinking of moving to, a good resource may be the citys website. There you may be able to get a better idea about the everyday municipal operations, including news about services, events, parks, and zoning ordinances which may affect improvements to your new property. Check out local news to get a better idea about the neighborhoods and surrounding areas.

In addition, do an internet search of what the area has to offer . If youre relocating because of a job, then consider connecting with future co-workers to get a better idea of the region.

Have questions about buying out of state? We’re here to help. Contact us today.

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Unusual Real Estate Offer And Contracting Procedures In The State Of New York

By Christina DeIasi

The procedure for contracting to buy a home in New York State differs from that in many other states. If you’re planning to buy a home in New York, you’ll need to become familiar with the basic steps and terminology, particularly if you’ve bought a home somewhere else before.

For starters, unlike in many other states, when you make an offer to purchase a home in New York and the seller accepts your offer, nothing legally prevents either side from walking away, almost regardless of the reason. You and the seller will not actually be legally bound to close the home purchase until the two of you have signed a formal contract, or are “in contract,” which typically occurs at least one week after the seller accepts your offer.

Another important difference from many other states’ procedures is that, upon signing the contract, you, the buyer, will need to make what’s called a “downpayment,” typically 10% of the purchase price. Don’t confuse this with the down payment that’s likely required by your mortgage lender at the closing, which is typically an additional 10% of the purchase price. This is more akin to the earnest money deposit made in other states, which serves as liquidated damages if you breach the contract and pull out of the deal.

This article discusses the process of getting “in contract” in New York and what happens to your downpayment once you make it.

Rent Vs Own Analysis In Nyc

If youre currently renting, youll want to do a quick rent vs own analysis to make sure that buying a house in NYC makes better financial sense than continuing to rent.

As much as people will try to make this a quantitative science, the reality is that much of this will be subjective and will also depend on your personal desires.

Many people make the decision to buy vs rent because they are tired of being at the mercy of rent increases every year. They simply want some stability instead of potentially having to move every year if they dont agree on a new rent amount with their landlord.

Instead of potentially having to look for and rent a new apartment at every lease expiration, some people choose to buy simply to not have the stress of a landlord breathing down their neck with constant rent inflation.

Furthermore, renters are often peeved at the inability to deduct rent payments from their taxes, while home owners are allowed to deduct mortgage interest.

Renters often decide to buy because theyve had enough of paying down an investors mortgage. They feel that their monthly rent payments are going into a black hole with zero return on investment.

While much of the above sentiment will be shared by current renters and will often be enough reason to embark on buying a house in NYC, you should also consider the positives of renting vs owning.

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Have You Decided Selling Is Your Best Option

Now that you know about the taxes involved when trying to sell your house in New York, its a lot of information and a lot to take in. But if you have decided to sell, you can sell your house as-is directly to a cash buyer like Leave the Key Homebuyers.

Theyll buy your house in any condition or situation. Theyll review the details of your house and find time to meet you at the property quickly. Theyll handle all the repairs so you dont even need to worry about it. Then, theyll make you a fair cash offer based on the value of the house. If you accept, you set the closing date. Then, all you need to do is sign the contract and get your cash.

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