1- Determine if you will finance the property or buy cash. If you are financing, then obtain a pre-approval letter. You can visit your own bank or your real estate broker can make a recommendation for you. Bank guidelines can be very strict these days so this will be an important step. If you have been with your current employer for a few years or at least in the same industry, have good credit and down payment in the bank, that's a good start.
2-Decide on the area you are interested in and size of apartment or house.
3-Start viewing properties and be ready to make an offer. Currently the market inventory is still near all time lows so the competition for property is fierce. Talk with your agent about ways to make your offer stand out above the rest. Consider a no mortgage contingency if financing though this is risky.
4- Have a real estate attorney familiar with the market standing by so that as soon as you get an accepted offer the due diligence step can begin and be finished quickly. Once you have an accepted offer, the attorney for seller will send over the NYS contracts to be reviewed. The last 2 years financials and other financial paper work will be sent over as well. Encourage your attorney to do their efficiently and quickly. In the current market, sellers are not patient to wait and if this process drags, other buyers can continue to see the property and make offers which may exceed your offer.
5- Sign the contract and put down a deposit of 10%.
6- Apply for your loan with the bank. The quicker and more responsive you are in gathering the paper work needed for your loan application, the quicker you will get approved and be able to close. Once you have a commitment, then submit your condo or coop application.
7- Once you are approved by the coop/condo then the closing will take place. 24-48 hours prior to closing you will go to the property and do a final walk through to make sure that everything is as it was or in working condition depending on the wording of the sales contract.
Closing Costs for the Buyer
Real Property Transfer taxes- These taxes in the case of a new building or a sponsor sale are most often paid by the buyer. In some cases, even non-sponsor owned property, the tax will be paid by the buyer. This is typically the case when it's a seller's market like now.
NYC transfer tax
Property under $500,000 1% of the price
Property over $500,000 1.425% of the price
NYS transfer tax is $4 per every thousand dollar of the sale price or 0.4% of the sale price
Mansion tax for properties over $1,000,000 is 1%
Attorney fee $1500-$3000
Bank related fees like the appraisal will be roughly 5% of the mortgage amount
Mortgage recording tax is included in the above estimate
So for example if you financing a property that is being sold for $1,500,000 and your mortgage is $1,000,000 you can anticipate needing about $70-80k in the case where you are paying the transfer taxes or about $50k-$60k if not.
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