If you’re thinking about buying an apartment in New York City, you may already know that inventory is limited right now.
Due to higher mortgage rates, we are seeing what is called the “lock-in effect,” where homeowners are unwilling to sell their own homes because they are unlikely to match their current interest rate should they buy a new home. Inventory has dropped year-over-year (YoY) for the last four quarters. Couple that with the fact that last month the market share for cash buyers in Manhattan was 63.4%, the third highest on record, according to the Miller Samuel Report, and you may find yourself asking – in a market with low inventory, higher rates, and more competition, how can I possibly win a bid or find a home that meets my needs?
Now more than ever, it’s important to partner with an experienced buyer’s agent to set you up for success in this market.
A buyer’s agent focuses not just on the logistics of buying real estate but on delivering a personalized experience that centers on your needs, wants, and concerns. This tailored approach ensures that every aspect of your home search is aligned with your specific lifestyle and financial goals. Agents take the time to understand your fears and pain points, allowing them to address these directly in their strategy and communications.
In a city where every square foot counts and every opportunity to buy must be optimized, agents not only provide access to the best properties available but also stand as your advocate, ensuring that your decision to buy an apartment in New York City is as informed and seamless as possible. With their expertise, passion, and tailored approach, buyer’s agents transform the daunting task of purchasing an apartment into an exciting journey toward owning your ideal home.
Do the Prepwork
There are many reasons you might not win a bidding war, but lack of preparation shouldn’t be one of them. If you are financing your purchase, it’s extremely important to get pre-approved before starting your home search. This helps educate you on a realistic budget you can work within – and shows the seller’s team that you’ve done the work to go through the checks and balances and that you’re serious about buying.
Your real estate agent will walk you through all of the paperwork to have prepped before you start touring properties, including the REBNY financial statement. If you’re paying cash, you’ll need supporting documentation to serve as proof of funds.
Whether you’re paying cash or financing, it’s important to get your documentation in order in advance and to make sure that your team of local advisors (attorneys, mortgage bankers, etc) is in place to help walk you through your real estate journey. This is not a market where you can leave a margin for error with online or national vendors who are not familiar with the complicated New York City market.
Have your ducks in a row before you start touring properties so that when you find your dream home, you and your agent are ready to submit an offer same-day if you choose to do so.
Learn About the (Current) Market
Your real estate agent is an expert in what’s available on the market, and what’s coming soon. Having a trusted agent that has good relationships with other brokerages will help you stay ahead of the curve and on top of the limited inventory, as it becomes available – being the first person in the door could position you well to secure the property if you choose to make an offer.
Since inventory in this current market is limited, we suggest taking one weekend to tour all available properties that meet your search criteria with your agent. We also suggest touring properties that may be slightly out of range for your search criteria – whether it be the neighborhood, amenities, or budget. After tours, your agent can help walk you through your likes and dislikes, and evaluate your “must haves” and “nice to haves.” Sometimes compromising on a “nice to have” in a seller’s market is a necessity to “win” in this market.
Touring inventory all at once will give you a better sense of what’s available – and at what cost. Your agent can also run comparables for you to show you what’s been on the market recently, and what it sold for. This will help you determine a price range that makes sense for you when you’re ready to submit an offer – and give you confidence in the numbers. Buyer’s agents are well-versed in current market trends and future outlooks, which is vital in preparing you to make informed decisions, especially in a market with more competition.
Be Prepared to Negotiate – And Know Your Number
Despite the fluctuating dynamics of the New York City real estate market, an experienced buyer’s agent brings a sense of clarity to the “chaos.” When you’re ready to make an offer, have a conversation with your agent about a fair price for the property – and consider the apartment’s value to you.
If it checks every box, and nothing like this has come on the market in a while, you may want to consider paying slightly above current market value, because other buyers certainly will. You should discuss a negotiating strategy with your buyer’s agent that includes your “best and final” number – aka the number at which you would be okay losing the apartment, knowing you left all of your cards on the table and went as high as you were willing to pay.
You should agree on this number before the emotions of the bidding war begin so that you are quite confident that your best and final number is also one at which you won’t feel buyer’s remorse or feel like you overpaid if you do win the bidding war.
If you have a plan like this before starting negotiations, you’ll be set up for success.
Even in a somewhat challenging market like this one, your agent can help you make this an easier process — because we’ve been here before, and we don’t get spooked by tough conditions or tough negotiations.
If you have any questions, or if you’re interested in kicking off your home search – or even if you’re a renter curious about the benefits of owning a home – reach out to Platinum Properties today. We’d love to help you find your next place to call home.
