The offer is the most critical part of the buying process. Below are the same gems I share with my clients as it pertains to crafting the best offer in any kind of market.

Step 1: Take the seller’s temperature. Before you submit an offer, first understand the Seller’s motivation. This is also why you want to have a Buyer’s Agent early on in the process—while you’re looking at places and getting a feel for things, your Buyer’s Agent is connecting with the listing agent to gather intel so your offer will be received in the best way possible. For example, if it’s revealed that a good offer includes the ability for the Seller to do a post-closing occupancy (and you’re ok with it), your offer should reflect that. Ditto for any other substantial pain points the Seller may have that you can address outside of the price itself. 

Step 2: Get familiar with the comps in the area. Real estate comparables (“comps”) are recently sold homes that are similar to the property you’re trying to purchase. I would say that this is now divided into 2 buckets (pre-covid and post-covid)—anything sold pre-covid, I would personally disregard. Use post-covid ‘in-contract’ and sold comps to determine the right place to start the conversation. Again, something your Buyer’s Agent can assist you with. 

Step 3: Determine what the property is worth to you. This is the real number, aka your “walk-away number.” Aside from comps, does this property check all of the boxes? Are your must-haves covered? A home is worth what a buyer is willing to pay for it, so when you can say, “I’m okay going up to ‘x’ number and if the bidding goes higher than that, I’m okay losing it” that’s when you’ve arrived at your walk-away number.

Step 4: Consider contingencies. My motto here is “less is more,” as a Seller will typically prefer and prioritize a clean deal (with no hair on it i.e. excessive contingencies, seller concessions, etc). However, if you’re in a Buyer’s market, standard contingencies are ok (i.e. financing & inspection).

Step 5: You get a counteroffer—recognize the signal. This is where you get to see where your offer stands. For instance, if a property is $1.5m and you offer $1.2m and the Seller isn’t highly motivated, two things can happen: 1) you don’t get any response or counter-offer (which is a huge signal that you’re way too low) or 2) you get a tight counter where the seller asks for $1.490, which signals that you need to come way up to continue the conversation. It’s really important for both sides to appreciate what is being communicated during a counter-offer. This is also where your walk-away number comes in handy, as you can save yourself a lot of heartache if you know beforehand how far you’re willing to go, to prevent yourself from getting swept up in emotional buying.

Step 6: You receive an accepted offer. This is exciting, however it’s not binding until a contract is signed by both parties. An accepted offer means that “we can keep talking”—at this moment we’ve agreed to your terms, we’re going to allow you to do an inspection, and we expect you to move quickly. You are not safe until the contract is signed (almost always the listing agent will continue showing the property until the contract is signed). You may just be the best offer at the moment—there can always be another buyer that comes along and offers more money and/or better terms than you, which is why too much time passing is the killer of all deals!

Step 7: Time for an inspection. My recommendation is that every property should be inspected (in certain instances, larger co-ops can be exempt). For a resale, the property is being sold “as is” and the carve out is the appliances should be in good working order and there shouldn’t be any active leaks present, to name a few. Things are different for a unit in a new development because you are inspecting a product that is newly constructed. Now, you are looking to verify that every “i” has been dotted and “t” crossed through the use of a punch list. Note that there will be at least 30-50 things that your home inspector may add to the list (this is expected), however that doesn’t mean that you should bring all 50 things to the Sponsor (developer). Make sure to consult with your Buyer’s Agent and inspector to review the hot-ticket items and only share the critical items—this will keep you in the “clean deal” arena

Pro-Tip: Break your punch list up into critical, health & safety, and cosmetics.

The best position for you to be in as a buyer is to have an inspector and an attorney ready on standby when you get the feeling that your offer may be accepted. Once that happens, you can say “Awesome. I have my attorney ready and I can inspect tomorrow. Are you available?”  

Step 8: Both parties sign the contract. Most deals require a 10% deposit which is remitted with the signed contract. The money will stay in the Seller’s attorney’s escrow account until the closing. Remember, nothing is binding until both parties sign. You sign first, and then the seller signs.

This phase of the process typically takes between 2-3 months (However, all-cash deals move faster)

First, you’ll have a bank appraisal. Don’t worry, you’re not involved with this. Your Buyer’s Agent will tour the property with an appraiser (3rd party) who will visually inspect the property and take pictures. Don’t worry, they’re only looking for proof that the place exists in the condition as represented. Your Buyer’s Agent will provide comps to the appraiser to support the price you agreed to pay.

Second, in 30 days or less, you’ll get a loan commitment. This is where it gets serious. The pre-approval is just “we think we’ll loan you the money” and a loan commitment is “alright, we’re going to loan you the money.” 

Third, (for co-op or condos), while the aforementioned is in process, you’re going to fill out a Board Package (purchase application). It can feel a bit overwhelming with all of the detailed information that’s required. Not to worry, your Buyer’s Agent will assist you in preparing it and ultimately submitting it to the building’s managing agent for review (i.e. bank statements, tax returns, reference letters, etc.).

Fourth, (for co-op or condos), the managing agent will review your board package. This is a pretty rigorous process that can be completed in a week or as long as a month’s time. Note: It’s important to find out when the Board meets, so you can time the submission of your package to coincide with that meeting. Otherwise, you could find yourself tabled to the following month’s Board meeting.

Fifth, (for co-op or condos), once you pass muster with the managing agent, your package is forwarded to the board for review and an eventual interview. Your Buyer’s Agent will run you through the basic do’s and don’ts. Just remember, less is more. Answer the questions politely, and succinctly. Don’t ask questions, save them for your Buyer’s agent. Also, dress appropriately and be early if it’s in person.

Sixth and final, (for co-op or condos), after a successful interview, you will get a board approval. Do not ask in the interview if you’ve been approved! Typically, an approval from the Board will be sent to the managing agent in a couple of days.

Take a deep breath, you’ve made it to closing! This phase of the process typically takes between 2-4 weeks.

First, you’ll get a notice that the bank has cleared to close. This means that the bank has made all of their last-minute checks and internal calls and are ready to officially move forward with the deal. 

Second, you set your closing date. This happens when the bank gives you that green light and it’s coordinated between attorneys when everyone is available. 

Third, you schedule your final walk-through. For a re-sale, the final walk-through is where you confirm that everything is as you remember it, typically, conducted the same day as closing or the day before. If you purchased in a New Development, you’ll reference the punch list to verify that all ‘agreed-to-fixes’ have been completed. If they haven’t, there are certain remedies that your Buyer’s Agent can negotiate for you.

Fourth, you officially close on your new property. Warning, you may experience lots of hand cramping from all of the pages that require your initials or full signature. What a great problem to have! You will receive keys upon officially closing or they may be with the doorman of your building, if applicable.

Fifth and final step is to celebrate in whatever way you know how! Pop a bottle of champagne (or soda water for my non-drinkers), indulge in some sweets, whatever helps you take in this very special moment of owning your own property. It’s been a long road, and if you’ve partnered with the right Buyer’s Agent, it should have mostly been a smooth ride.

There you have it—the full rundown of the home buying process in our current NYC real estate market. It’s been a whirlwind and surely a lot to digest in this 2-part series. But the good news is you don’t have to do this alone—the home-buying process is meant to be executed with a winning team (refer back to part 1 “Who’s Your Team” section for a refresher) and I would love to be a member of your team. Let’s work together!

I’m known as The Buyer’s Advocate with a team ready to help you in this ever-changing market. My motto: Hands-on, heart on, wisdom on. Let’s connect: aaron@triplemint.com

Start NOW! It doesn’t matter if you’re looking to buy in a month, 6 months, or a year. It never hurts to just start the process because buying a home can take an emotional toll on you (mentally, it’s a lot) and it’s better to be prepared.

Here are some things you can do to prepare for this process:

1. Check your credit
2. Get your paperwork in order
3. Make sure you have an active driver’s license or passport for identification purposes
4. Make sure your current address is on all of your bank statements
5. Limit large deposits and transfers
6. Make sure you have 2 month’s worth of statements
7. Get a pre-approval and assemble your team 

1. Buyer’s Agent— this is your advocate, and the QB of your team. Use a referral source and reviews to help identify the right fit for your search criteria and personality type. 
2. Real Estate Attorney—ideally, this person does a high volume of contracts every week and is responsive and familiar with the speed of the process. 
3. Lender—going to your bank for a mortgage may seem like the logical choice but can they get you to the finish line? How do you know? It’s important to use a referral, either from your agent or another trusted source.
4. Home Inspector—you need someone who will have your back and make sure that the home is actually what you think you’re buying.

Buying in NYC in the Covid-19 Era (the rules have changed making things a lot more complex)

1. You need a Buyer’s Agent now, more than ever before.
2. They will help you navigate this new normal.
3. The state of your market is going to depend on the neighborhood, the pockets of the city relative to your buying criteria, & price point. 
4. Being safe is top of mind for all of us. Even with those fully vaccinated, there may be case-by-case protocols to maintain a level of safety before viewing a property.

Why do I need one? The primary reason you enlist a Buyer’s Agent is to have an advocate who will represent your best interests. Think of them as the quarterback of your team, making sure everyone works in concert. The road to a successful purchase is littered with potholes and your Buyer’s Agent will make sure to help you navigate them safely. With ‘boots on the ground’ knowledge, they also synthesize all of the information you find online.

Will I get a better deal if I represent myself? You don’t know what you don’t know. Going in blind without actual representation can end up hurting you and your pockets in the long run. 

When should I hire? The earlier the better! Don’t worry about whether or not you have both feet in and you’re ready to go. A major role of the Buyer’s Agent is to serve as a sounding board. Think of it like this: your dream home could be sitting right there and you don’t even know it because you don’t have the access, expertise, and context of the market to identify it. This could go on for weeks, months, or even years. Ultimately, all of this can be avoided with the help of a Buyer’s Agent’s insights. 

How much will it cost me? For most transactions, there aren’t any out-of-pocket costs for the buyer, which is all the more reason to hire an advocate.

There are four (4) primary property types found in the New York City market: co-ops, condos, townhouses, and new development.

Traditionally, co-op’s are about 20% less than a condo because you don’t actually own the unit—you own shares in the company that owns the unit. Many people find that there’s a lack of flexibility here—you have a board interview, limits on subletting or usage (pied-a terre allowed?), and an extensive board package to complete. As a result, co-op’s tend to get a bad rap, however, the reality is this type of property investment is for those who value a sense of community. Essentially, you have a number of people who have agreed to be vetted to the same degree, and as shareholders have a true stake in whether or not this investment flourishes. 

Condos are the epitome of flexibility, with none of the aforementioned requirements, particularly as it relates to renting out your unit or using it part-time (you own the unit). They come with a deed, and as such, are more expensive. If you value a community, a condo “may” pose a challenge if there are too many absentee owners turning your place into a glorified rental building. Ultimately, the premium paid on the entry is for the ease of living and your exit. 

Something to be mindful of in New Development is that certain taxes and fees shift between the Sponsor and Buyer, and are market dependent: ex. if you’re in a prevailing “buyer’s market”, Sponsor and buyer’s transfer taxes—typically paid by the Buyer in a seller’s market— would instead be covered by the Sponsor. Down Payments may also vary. One of the benefits of new developments is that it has never been lived in, however, this can also be considered a concern for some since it also means that it hasn’t been tested. You’re going to have to lean on the reputation of the developer and the quality of construction when making this purchase.

For a Townhouse, the biggest benefit is that there’s no Board to determine your worthiness to buy or sell. Privacy reigns supreme. Private outdoor space is included, so these have been very popular given the pandemic. Also, you have the option to purchase a “multi-family,” which can offer additional income, turning it into more than just a place you live, but an asset that is generating wealth for you and your family. 

Now that you understand the property types available to you, let’s get into what you need to be successful in this market.

1. Adopt a positive mindset. This will put you in a space of abundance and not scarcity.
2. Commit to the process. Things aren’t always going to go as planned, however, keep the end goal in mind.
3. Be open-minded. Have some flexibility when it comes to neighborhoods, price-points, fixer-upper vs. turn-key, etc. 
4. Start slow, finish fast. Honor your process and take your time, but move like the wind when it’s time to secure a place.
5. If you love it, act like it. No matter what market you find yourself in, if you’d be upset if a place went into contract or was sold, then do something about it before that happens!

And for the final two points, (well, actually five), see below for how to manage your search.

Step 1: Determine Your Budget. You have to establish what your buying power is. You start with getting a pre-approval and then you work backwards to get a sense of what your monthly payment would be. This step is crucial because the information gathered from this step will give your Buyer’s Agent the parameters of your search to show properties within your reach.

Step 2: Establish Criteria. Where and what to buy. Many people start here first to get a taste of the market and what they may like. Play with different filters, different size properties, different neighborhoods, etc. Once you know your buying power, this step becomes more focused. 

Step 3: Identify Your Must-Haves. This may look like: a washer/dryer in-unit, private outdoor space, or even an elevator, for some people. A “nice-to-have” could be a finished basement or a fireplace.

Step 4: Get Educated. First online, and then in-person. Ideally, you want to be able to look at the listing and understand what is actually being presented to you. This requires understanding the language the broker is using—for instance, “charming” usually means small. Pro-Tip: Study the floor plan if one is provided as it can help with identifying whether or not your current lifestyle (like having a King-sized bed) can fit nicely in this property.

Step 5: View Properties. Remember that when you are visiting a property, the goal is to try to envision yourself in that space. That’s why referencing the floor plan in advance will help you know what works furniture-wise. It’s also about the neighborhood. When you walk down that block, can you envision yourself going to any of the local shops? Also, this stage in the buyer process has changed a bit with protocols in place like wearing masks even if vaccinated, and removal of shoes so be willing to be flexible on your visits.

My overall philosophy is “Start like a flood light, end like a laser.”

When you’re first starting out, you don’t really know what you want. You may think you know, but until you get out and see places in person you have no idea how that will shape your search going forward. So, start with a wide search and once you have a better understanding of what you want your money to buy you, then narrow your search accordingly. When you honor this process (be it 2 weeks, a few months, or a year) the home of your dreams will manifest.