Gea Elika's Blog, page 99

A Buyer’s Agent Rebate You Can Do Without

You may have heard about buyer’s agents providing his or her client with a commission rebate. It is a bit confusing since the seller pays the commission, which is split between the listing and buying brokerages according to a pre-arranged formula. The respective individual agents further spit the commission. However, under a rebate situation, the buyer’s agent agrees to forgo part of his or her commission, returning it to his or her client.

Since everyone wants to save money, this is tempting and may cause you to sign on with an agent. However, there are many downsides that you should carefully consider.

Inexperienced agents

An inexperienced agent, looking to build his or her business, might offer a prospective client a rebate. This is an astute move in a competitive business. However, you do not want your agent to learn and gain experience at your expense. After all, this is likely the most expensive purchase you are going to make in your lifetime. The city’s median purchase price was $630,000 according to the Real Estate Board of New York (REBNY). However, in Manhattan and Brooklyn, it was nearly $1.1 million and $755,000, respectively. This is for all properties. A condo costs more.

Part-timers

The real estate industry has a number of people attempting to work on a part-time basis. This agent may offer a rebate to compete with full-timers. This balancing act does a disservice to buyers. This is a profession that demands one’s full-time attention. A part-time agent may not give his entire thoughts to his or her client. Additionally, he or she may not fully understand the market.

Lack of relationships

Those just starting out and part-time agents likely lack relationships that can hurt the buyer. A more experienced agent knows many listing agents and boards, building up relationships and gaining each other’s trust through the years. These can facilitate a sale. Alternatively, a lack of industry relationships can hurt your chances to buy the property.

There are also many services a real estate agent can refer to his or her client. These range from the mundane, such as a locksmith to the other key players in the transaction, such as a home inspector, contractor, lender, and lawyer. An experienced, full-time agent has built up a list of competent people for you.

Rebates can cost you

As with other things in life, in real estate, you often get what you pay for. All else being equal, of course, buyers should want a rebate. However, these are often given by inexperienced or part-time agents, meaning you are not benefitting from a venerable agent’s experience and extensive network of experts.

Think about why a real estate agent is offering you a rebate. If the agent had a solid client base and enough business, he or she would not need to discount his/her commission.

This is an industry where 75% of agents leave after the first year on the job, according to one estimate. The high turnover indicates this is not the profession for everyone. Successful agents are driven, motivated, smart people who have excellent communication skills. These are the agents that can help you the most.

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How to Decide When it’s Time to Sell Your Home

How long someone spends in their home before selling will be a lifestyle choice. For some, it’s all part of the “five-year plan” to purchase a home and live in it until they’ve outgrown it, and then sell it to pay for a larger one. For others, it’s part of a retirement plan to fix it up and sell immediately. Then there are those who must sell for unexpected reasons. Whatever the reason might be there is an ideal time to sell.

So how long should you live in your home?

According to research by StreetEasy, the tipping point at which owning a home becomes more financially viable then renting is 5.6 years. This fits with the usual “five-year rule,” but at this point, you’re probably only breaking even. Also, a true break-even point isn’t merely what you originally paid for the home. It also includes the costs associated with buying and owning, the closing costs when you sell and the listing agent’s commission. Because every neighborhood and building is different, you’ll need to break the numbers down to see what your true break-even point is. Then decide how much longer to wait to make a decent profit. Start by:

Adding up the total costs of your home purchase – original purchase price plus closing costs.
Calculate the costs of owning your home – maintenance, repairs and any renovations.
Figure out the costs of selling your home – commission for both agents, sales taxes and attorney fees.

Next, take account of the following subtractions:

Any equity on your home.
Tax refunds you received from owning your home.
Appreciation increases.

There will be a degree of guesswork to figuring out how much you can make from a home sale. But doing a Comparative Market Analysis (CMA) will give you the closest approximation. The more equity you can build on your home the more of it your own. This is the main reason for the five-year rule is that it takes time to build equity on a mortgage. Most of your monthly payments for the first few years go towards paying the interest rather than the principle. You’ll also want to see your home appreciate nicely. This is good news for NYC as appreciation rates have been above average for the last ten years.

When is it time to sell?

So assuming you’ve put at least five years into the relationship there might be other personal reasons why you want to sell now. See if you check off on any of the following:

Your family has grown, but your home hasn’t

Perhaps the most common reason for a family to sell and move is when their family has expanded. It might have been the right home when you were expecting your first child, but now that you have a new arrival or two, the space isn’t there anymore. It can be painful having to give up a place with a lot of memories but if tight living quarters are making you stressed it’s probably better to move on. Other life changing events like divorce, a death in the family or serious illness are other reasons for making a change in life. But let’s not think too seriously. Sometimes it’s just a desire for a change in scenery and lifestyle.

Expenses are becoming too much, so you need to downsize

Not every homeowner sells to make a tidy profit. Some underestimate the costs of homeownership or suffer a change in their financials such as losing their job. Their mortgage payments and property taxes have become too much, and they need a way out to find a more affordable home. High common charges or maintenance costs are another reason for wanting to sell.

There’s currently a boom in the housing market

Even if you don’t feel any pressure to sell it should be considered if there’s a booming seller’s market. Knowing whether the market is experiencing or about to experience a boom requires a careful study of current trends. Look at properties in your neighborhood and see what you can find. Is the average sales price going up? Is the average number of days on the market decreasing? Also look at current developments. If a lot of properties are being bought up and converted into new condominiums that could indicate that the local market (and property values) is about to expand.

Summary

Deciding when to sell is a very personal decision and should not be taken lightly. At the very least you should wait two years to avoid paying capital gains taxes. If you want to build up equity without going through costly renovations, then you’ll need 5-7 years. These are all good benchmarks, but you’ll also want to keep an eye on the market. If there’s a buyer’s market, then it may be better to wait until things stabilize.

On the other hand, if you can play things right, you could be able to walk away with a happy sale. Seek consultation from an experienced real estate agent before making any decisions. They can provide you with all the necessary information so you can make the best decision possible.

The post How to Decide When it’s Time to Sell Your Home appeared first on ELIKA Real Estate.

Thinking of Buying Without a Buyer’s Agent? Think Again

So you’ve weighed the pros and cons of renting or buying and decided to buy. Well, you better get yourself ready because you’re in for a long process that can be confusing. Buying a home is rarely as straightforward a purchase as other things. There will be a lot of legwork involved as you scope out different properties on the market, assemble a mountain of paperwork, compete with other buyers, and a host of other challenges to overcome before you get your hands on the keys to the front door. All of this can get very stressful. Having the right agent by your side to act as a guide and confidant can not only reduce the stress and time involved but also save you a lot of money. This is where a buyer’s agent comes in.

Things have changed a bit in the real estate world in the last few years. Many listing websites and apps now make it much easier to find a property without the need for a buyer’s agent. But the problem with many of these sites is that they can’t differentiate between a desirable property and a lemon. It takes in-depth market knowledge and an understanding of a good floorplan versus a bad one to weed through all the listings on offer to find your dream home. If you’re still not convinced that you need a buyer’s agent, then let’s go through the whole buying process and see what you can expect if you go without an agent.

The search

There are many listing sites available now where buyers can use an advanced search to find properties to their liking. StreetEasy is probably the best in NYC, but it still suffers from the same problems as others. Mainly that you’ll have to comb through hundreds of different properties which have all the bad mixed in with the good. You’ll have to make a shortlist based on your wish list, preferred neighborhoods, and budget. Even if you can narrow down a list of 10 or 20 properties to call, you’ll then have to find the time to visit each one and evaluate them. All of this isn’t hard, but it can be time-consuming, especially if you’re unfamiliar with the neighborhoods, streets, and buildings.

When you hire a buyer’s agent, they will do all the searching and calling based on your needs and budget. They can then schedule appointments to view properties which they feel fit what you’re looking for. If you’re working full-time and don’t have a lot of free time this alone can be invaluable. When viewing properties together, they can explain the pros and cons of each to help you decipher which is the right one. All this saves you time and ensures that you find a desirable property with great long-term potential that matches your needs and budget.

Negotiations and making an offer

The vast majority of listed properties in NYC are represented by listing agents who you will deal with rather than the sellers. Without a buyer’s agent to represent your interests the listing agent will assume dual agency. This means that while the listing agent will help you with any questions you might have, their loyalty will be to the seller. Their job is to sell and for the highest price possible. Therefore, in negotiations, they will always lean towards favoring the seller. Unless you have a lot of experience handling negotiations on your own, you could be in for a rough ride. There may be counter-offers and other interested buyer’s which without good negotiation skills could see your offer rejected.

A buyer’s agent can handle all of this and make suggestions on how best to answer counter-offers and deal with a bidding war. If you’ve chosen a good agent, they will know the neighborhood, current market prices and perhaps something about the seller’s motivations. Also, keep in mind that in NYC real estate contracts are not binding until both parties have signed the contract. The sellers have the distinction of being the last to sign. This means that even if they gave a verbal agreement to accept your offer, a better offer might come through and lead to them canceling yours. Unfortunately, there is little you can do if this happens but at least if you have an agent, you’ll be better prepared.

Other ways a buyer’s agent can help

Once you have an accepted offer and a fully signed contract the agent’s job is largely done. Your real estate attorney will handle the due diligence, closing documents and schedule for the closing day. But your buyer’s agent can still help in a few other areas that will ensure a smoother sale.

Recommend other professionals – Buying a home requires the help of a range of different professionals. You’ll need a home inspector to ensure there are no problems with the property. A real estate attorney to handle due diligence and arrange everything for the closing day. A mortgage lender to underwrite and approve your mortgage. And a contractor if you plan to do any renovations after the sale. Your agent can provide tried and tested ones that they’ve worked with before or had recommended to them. All this helps you get through each step of the process and lead to a successful sale much faster. 
Help you secure financing – Mortgage financing can be very complex and confusing. If it’s your first home purchase, it can be very hard deciding which mortgage type is right for your circumstances. A buyer’s agent will help you navigate through this stage. They’ll help you understand each of your options and help you to secure a mortgage through your chosen lender.
Help you overcome setbacks – It’s rare for a home sale to go completely smoothly with no road bumps. The home inspectors report may come back with issues that need to be addressed. If that happens, your agent can advise you on how best to proceed and handle any renegotiations. If negotiations become deadlocked at any point, it can be reassuring to know you have an agent standing between you and them.


They can act as an emotional filter – Buying a home can be a very stressful time. At such times it’s easy for people to allow emotions to cloud their judgment and make rash decisions. Since a buyer’s agent isn’t emotionally attached to a property you’re interested in they can help keep you on track and see the pros and cons.

How to find a good buyer’s agent

All the benefits covered above can be had when you hire a good agent. But as with any professions, there are good apples and bad apples. To ensure you get the services and professionalism you need, take your time in choosing the right agent for the job. Don’t just go for the first one you choose. Instead, it’s best to interview at least three agents and ask them a series of questions to determine if they’re a right match for you. Also, watch for any signs that you may have made the wrong decision.

Ask about what neighborhoods they specialize in. If they don’t have experience in your favored neighborhoods, then they’re not the right choice.
What are their schedule and availability? You’ll want an agent that is available when you need them and is committed to working for you.
Ask about their negotiation style and experience. You’re more likely to get along with them and work better as a team if their negotiation style matches yours. Knowing their level of experience will also allow you to judge their competency. However, don’t necessarily dismiss less experienced agents, they may have other perks up their sleeve.

For more questions to ask a prospective agent make sure you see our full article on the subject.

Discount/Rebate brokers

When doing your search for a buyer’s agent, you may come across agents who are willing to rebate a part of the fee back to you. Before jumping at the chance for this, it’s worth looking a bit closer to see exactly what you’ll be getting. Agents must have a reason for doing this such as a chance to drum up business. If they’re inexperienced, you may not get all that you expect with this such as a Comparative Market Analysis (CMA). This determines what the offering price should be, so you don’t offer more than the place is worth. An experienced agent will know how to put all the variable together to create the best offer price. If you go with a discount broker, you may be losing out on this and end up losing money rather than saving it.

Sign the agent/buyer contract

Once you’ve found your ideal agent, you’ll usually be asked to sign an Exclusive Buyer Agency Agreement. This outlines your agent’s duties and compensation (covered below). This agreement will also make this agent your sole representative, so you can’t work with other agents. However, some agents, like Elika Associates, don’t require long contracts that lock you in for several months. All we ask for is a two-week commitment. If you’re not happy with our service by that time you’re free to seek alternative representation.

How much does a buyer’s agent cost?

If you needed any more reasons to go with a buyer’s agent how about that fact that you won’t be paying for them. This is because their commission is built into the purchase price. If you choose to go without agent representation, you’ll still be paying that 6% commission. It will just go entirely to the listing agent. If you go with a buyer’s agent that 6% will be split between them 50/50. As such it makes little sense to go without representation as you have little to lose by it.

The post Thinking of Buying Without a Buyer’s Agent? Think Again appeared first on ELIKA Real Estate.

Buying a Home that Will Appreciate in Value

It is easy to dismiss the idea that your home purchase is an investment. After all, there is an emotional attachment you make when you live someplace. While we recognize that this is an essential part of the process, and the memories you create are priceless, the fact is that a home purchase is likely the biggest purchase that you are going to make in your lifetime.

Although the signs are clear the market is slowing, there are still items you can look for that your property is poised to increase, particularly if you take the long-term view.

Location is the single biggest determinate in housing prices. It is a cliché, but that does not make it less true. However, this oversimplifies the matter. What makes one location better than another one?

School district

Some important factors determine a good location. Many look for a top school district. A municipality that is focusing more on education is a positive sign.

You can turn to various rankings, but keep in mind that school administrators are getting savvy about the ratings. It is an excellent place to start, but then you should do your research by reading posts and talking to parents in the district. If you can, check the school district’s meeting minutes to understand the issues and priorities.

A smaller property

Taking a purely economic perspective, it is better to own a smaller home in a more upscale neighborhood than a larger one in one that located in a more modest one. If you buy the smaller home, others raise your property value. Homeowners making additions should prove beneficial to you. Purchasing a larger home in a more modest area means you are lifting the surrounding homes’ value.

A quiet street

Homes on a quiet street are more desirable than those on a busy one. People pay more for a quiet, serene life than one in the middle of a lot of noise and congestion.

Near the good things

People want to live close to things they desire. This includes nice shops, entertainment, and recreation. Those close to transportation, either public or roads, depending on where you live, have shown a tendency to do well.

Access to quality healthcare is also desirable. After all, who wants to drive far for routine medical matters, much less an emergency situation?

You should watch for changes to your city or town. Monitor social media and other sites to see what is going on. Perhaps things are changing for the better, boosting your quality of life and home value.

Undesirable factors

Certain factors will suppress the value of your home. You may pay less for a comparable home if these are present. However, it makes it more difficult to sell your home, and you may very well find the appreciation is not as sharp as other areas.

Realtor.com has put together a host of such items. We can add several things to the list. These include high crime neighborhoods, those that are crowded and noisy, and commercial/industrial towns and cities.

A downtrodden neighborhood may prove a mixed bag. If there are signs it is on the upswing; you may see a sharp increase in home values. This would include signs of investment, such as more upscale new condo developments and shops. You have to balance this against the risks and weigh whether you want to live through the sometimes long process of the neighborhood changing.

The post Buying a Home that Will Appreciate in Value appeared first on ELIKA Real Estate.

Unsold Listings: Bargain or Beware?

While New York City is a desirable place to live, some listings linger. This is the case no matter the market’s condition. The key, from the buyer’s perspective, is whether or not there are valid reasons that have scared off buyers. You may swoop in and purchase the unit at a bargain price. However, this warrants caution since there are pitfalls.

High monthly costs

A co-op or condo charges shareholders and owners a monthly fee. Co-ops refer to these as maintenance fees, and a condo calls it common charges. If these are unusually high compared to other buildings, buyers are likely to balk. This could suppress demand, causing the listing to linger.

You have to decide whether you want to bear a higher monthly cost. All else equal, the answer is obvious. However, if you can purchase the unit at a low enough price, a lower mortgage payment could offset the higher monthly charges. However, you should investigate why the common/maintenance charges are higher than other buildings. If the board of directors has mismanaged the finances, it is best to stay away.

Large assessment

Condo and co-op boards may impose a special assessment to fund a major project. These include replacing the roof or boiler. A board could have a reserve fund, or it could impose a charge to unit owners and shareholders for a specific period of time.

You need to think about whether you want the extra expense. If the assessments occur irregularly, you can have more confidence that the board will not impose another special assessment for some period of time.

The seller is not serious

There are sellers that are not serious. Often, people think buyers are the ones being too casual and not ready to make the purchase. However, there are sellers that push the process beyond reasonable limits. In this case, potential buyers may have made offers, but the seller turned him or her down.

Sellers have their motivation for doing so. Perhaps he or she is stubbornly sticking to a certain price, unwilling to budge. Alternatively, it is an emotional process, and there are certain people who are not ready to sell.

Your exclusive buyer’s agent can help you. He or she knows the market and has an ear to the ground. Additionally, your agent can talk to the listing agent to uncover if the seller is not serious.

In any case, the best advice is likely to stay away from these situations once you realize what is happening. Otherwise, you will end up frustrated and having wasted your time.

Priced too high

If a listing price is too high, the unit is likely to sit on the market. Sometimes, sellers are swept up in the moment, or perhaps misinformed by press clippings that have not yet reflected the market reality.

Some sellers ignore the market. He or she is unwilling to see the lack of demand meaning that he or she priced the unit too high. There are many reasons this might happen.

In this case, you might bargain with the sellers for a lower price. It depends on how long the property has been on the market and the seller’s level of motivation. You can certainly try to put in a reasonable offer, but back it up. Including recent comparable sales will help your case.

Poor marketing

Sometimes, a listing agent has done a poor job marketing the unit. Perhaps this is due to inexperience. For instance, a poorly staged apartment could turn away buyers. In this case, once you get past this initial impression and use your imagination, you can use the lingering listing to gain a bargaining advantage.

Run!

If there are significant issues with the building or apartment, you should probably not bother going forward. The unit/building could have plumbing or electrical problems, for instance. Of course, if the issue is minor, such as a paint job, then you may wish to make an offer.

If buyers are having trouble getting a mortgage due to issues with the building, you should turn away. You don’t want to waste your time in these situations.

The post Unsold Listings: Bargain or Beware? appeared first on ELIKA Real Estate.

Start Now If You Want to Buy a Home in 2019

So after thinking it through and deciding if now is the right time you feel you’re ready to take the leap from being a renter to a homeowner. But a quick look at your finances shows that it just isn’t in the cards, at least not yet. Buying a home will be one of the most expensive decisions of your life, especially in a place like New York. You’ll need at least enough to cover a down payment and if you want a good interest rate you should aim for no less than 20%. If that looks out of reach now, then adopting a few useful habits now could make it a reality in 2019.

The market in NYC currently favors buyers so the sooner you can reach your financial goals the better position you’ll be in. Here are four habits you can start right now if you want to buy an NYC home in 2019.

Set up a savings account as your “house fund”

The recommended 20% down payment you’ll need to secure a mortgage with the best rates call for some serious saving. For an $800,000 home that’s $160,000, you’ll need in the bank. Unless you’re expecting a hefty inheritance or a winning lottery ticket to fall in your hands then you better start saving sooner rather than later. Most people dramatically underestimate their down payment so try not to be too conservative in how much you think you’ll need.

A quick way to start saving now is to automate your checking account to set aside a small percentage of your paycheck into a separate account as your home fund. You now have an easy way to predict how much you’ll have saved by a certain time. You’ll also want to have a certain amount set aside for any maintenance or unexpected repairs needed after the sale. Maintaining this takes discipline so remind yourself of its importance every day.

Start building a clean credit history

Even with that down payment saved you’ll still need to secure a mortgage. Lenders like to see a good income and savings in the bank but they can still deny you a mortgage if your credit history is bad. Stay on top of all your college loans and credit cards and if you’re behind aim to get caught up as fast as you can. But don’t mistake a clean credit history for an empty credit history. Without any loans, you won’t have a credit history or any way to prove you can (or can’t) keep up with payments. In short, pay your bills. If you also need to rebuild your credit score, then start taking steps towards that end as well. Those with a credit score above 700 will qualify for the lowest rates while the very lowest is available for those above 750.

Start budgeting your lifestyle

Want to increase the amount you can put away each month in your house fund? Then start cutting costs and following a strict budget. Make a list of all your current expenses and look for areas you can cut or completely eliminate. Aim to adopt a more conscious approach to spending. If you’re used to eating out once a week then reduce that to once a fortnight and eventually once a month. For example, you could swap your gym membership for some weights and good running shoes. Or look into potential renegotiations on mobile, internet or utility contracts. If you want to take it a step further, sell your car and put the proceeds straight into your house fund.

Start researching the market and what you can afford

The housing market rewards preparation so make studying it your new hobby. If you already know what neighborhood you’re interested in, then stay informed about current prices and any new developments that could change the market value. Also, check up on other potential neighborhoods to buy in. it’s more likely that the market rather than your personal preferences will dictate your choices. The better the sense you have of market prices and local amenities the easier it is to predict what you can afford. That way you can avoid disappointment when it comes time to start home hunting.

The post Start Now If You Want to Buy a Home in 2019 appeared first on ELIKA Real Estate.

4 Habits to Start Right Now If You Want to Buy a Home in 2019

So after thinking it through and deciding if now is the right time you feel you’re ready to take the leap from being a renter to a homeowner. But a quick look at your finances shows that it just isn’t in the cards, at least not yet. Buying a home will be one of the most expensive decisions of your life, especially in a place like New York. You’ll need at least enough to cover a down payment and if you want a good interest rate you should aim for no less than 20%. If that looks out of reach now, then adopting a few useful habits now could make it a reality in 2019.

The market in NYC currently favors buyers so the sooner you can reach your financial goals the better position you’ll be in. Here are four habits you can start right now if you want to buy an NYC home in 2019.

Set up a savings account as your “house fund”

The recommended 20% down payment you’ll need to secure a mortgage with the best rates call for some serious saving. For an $800,000 home that’s $160,000, you’ll need in the bank. Unless you’re expecting a hefty inheritance or a winning lottery ticket to fall in your hands then you better start saving sooner rather than later. Most people dramatically underestimate their down payment so try not to be too conservative in how much you think you’ll need.

A quick way to start saving now is to automate your checking account to set aside a small percentage of your paycheck into a separate account as your home fund. You now have an easy way to predict how much you’ll have saved by a certain time. You’ll also want to have a certain amount set aside for any maintenance or unexpected repairs needed after the sale. Maintaining this takes discipline so remind yourself of its importance every day.

Start building a clean credit history

Even with that down payment saved you’ll still need to secure a mortgage. Lenders like to see a good income and savings in the bank but they can still deny you a mortgage if your credit history is bad. Stay on top of all your college loans and credit cards and if you’re behind aim to get caught up as fast as you can. But don’t mistake a clean credit history for an empty credit history. Without any loans, you won’t have a credit history or any way to prove you can (or can’t) keep up with payments. In short, pay your bills. If you also need to rebuild your credit score, then start taking steps towards that end as well. Those with a credit score above 700 will qualify for the lowest rates while the very lowest is available for those above 750.

Start budgeting your lifestyle

Want to increase the amount you can put away each month in your house fund? Then start cutting costs and following a strict budget. Make a list of all your current expenses and look for areas you can cut or completely eliminate. Aim to adopt a more conscious approach to spending. If you’re used to eating out once a week then reduce that to once a fortnight and eventually once a month. For example, you could swap your gym membership for some weights and good running shoes. Or look into potential renegotiations on mobile, internet or utility contracts. If you want to take it a step further, sell your car and put the proceeds straight into your house fund.

Start researching the market and what you can afford

The housing market rewards preparation so make studying it your new hobby. If you already know what neighborhood you’re interested in, then stay informed about current prices and any new developments that could change the market value. Also, check up on other potential neighborhoods to buy in. it’s more likely that the market rather than your personal preferences will dictate your choices. The better the sense you have of market prices and local amenities the easier it is to predict what you can afford. That way you can avoid disappointment when it comes time to start home hunting.

The post 4 Habits to Start Right Now If You Want to Buy a Home in 2019 appeared first on ELIKA Real Estate.

Benefits of Buying a home in Your 20s

It’s in your 20s that many major life decisions are made. Your life partner to settle down with, your choice of what to study and make a career in, and how to lay the foundations for long-term investments and success. Buying a home is another major choice to be made and, understandably, it’s the one that many millennials balk at. Many are burdened by student loans while others have doubts about homeownership as a lifestyle choice. But when you examine things closely you can see that buying a home can lead to many benefits. Especially so if you do it in your early years. To help you decide, here are those benefits you’ll get from buying a home in your 20s.

You’ll be investing in your future

A purchase now means an investment that will grow with the future. The sooner you can start that the better the return is. Home values in NYC have increased by 30% since their lowest point in 2011 and look set to continue for at least another year before the market stabilizes again. So the sooner you buy, the better chance you have of getting a good price as it looks like home prices are only set to continue rising. The good news is that NYC is currently in a buyer’s market. Meaning you have a better chance of negotiating a lower selling price. After a number of years when you’re ready to move on you can then sell to provide the down payment needed for a larger home.

You’ll build your credit

Buying a home at a young age means you can get an early start building your credit history. A longer credit history will be more impressive to future lenders when you next need a loan. Regular monthly payments on your mortgage will also ensure you have a high credit score so when it comes time to upgrade you should have little trouble securing a loan. Granted, to first buy a home and start building credit you’ll probably need a mortgage loan. Fortunately, there are ways to increase your credit score over time. The sooner you can start building a good credit history the better your future prospects will be.

You’ll learn better spending habits

It may be something of a cliché but buying a home at a young age really does make you more responsible. You’ll face many more challenges in the years ahead so the sooner you can build good spending habits the easier you’ll make everything else. Having that monthly mortgage to pay for, plus utilities and other maintenance costs will help keep your spending in check. You’ll learn the importance of investing in your future and how to manage money which is a skill that takes time to acquire. In a city at notoriously expensive as New York, it really helps to be smart with your money.

You’ll receive tax benefits

The costs of becoming a homeowner may look beyond your means but when you look at the long-term benefits it can actually cost you less than renting. For a start, there are the tax credits you’ll receive as a homeowner which will lower your tax liability. Meaning you’ll have to pay less money in taxes each year. Then there’s the fact that, at a certain point, it’s cheaper to buy than rent in NYC. Research by StreetEasy found that this tipping point is 4.9 years. So if you plan to stay put for at least 5 years or more it makes sense to buy rather than rent.

You’ll enjoy more freedom

It’s not easy having to share a tight apartment with a roommate in NYC. You’ll have to take account of their needs and concerns when making any changes to the property but also mold your lifestyle for the sake of civility. But when you own your own apartment you can do what you wish without anyone’s permission. Getting this at a young age is sure to increase your self-esteem and courage to continue building a bright future. Now there will still be neighbors and the building’s board to take account of but compared with a renter, you’ll have much more freedom in what you choose to do with the property.

Becoming a homeowner in NYC is a big decision and not one you should take lightly. Make sure to consider all your options and decide if now is the right time to buy. Even if you can’t buy just yet you can still put a plan in motion to do it before the end of your 20s. Buying a home might cost a lot of money upfront but when you consider the long-term benefits you’ll see how that investment can pay off.

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What are the Benefits of Buying a home in Your 20s?

It’s in your 20s that many major life decisions are made. Your life partner to settle down with, your choice of what to study and make a career in, and how to lay the foundations for long-term investments and success. Buying a home is another major choice to be made and, understandably, it’s the one that many millennials balk at. Many are burdened by student loans while others have doubts about homeownership as a lifestyle choice. But when you examine things closely you can see that buying a home can lead to many benefits. Especially so if you do it in your early years. To help you decide, here are those benefits you’ll get from buying a home in your 20s.

You’ll be investing in your future

A purchase now means an investment that will grow with the future. The sooner you can start that the better the return is. Home values in NYC have increased by 30% since their lowest point in 2011 and look set to continue for at least another year before the market stabilizes again. So the sooner you buy, the better chance you have of getting a good price as it looks like home prices are only set to continue rising. The good news is that NYC is currently in a buyer’s market. Meaning you have a better chance of negotiating a lower selling price. After a number of years when you’re ready to move on you can then sell to provide the down payment needed for a larger home.

You’ll build your credit

Buying a home at a young age means you can get an early start building your credit history. A longer credit history will be more impressive to future lenders when you next need a loan. Regular monthly payments on your mortgage will also ensure you have a high credit score so when it comes time to upgrade you should have little trouble securing a loan. Granted, to first buy a home and start building credit you’ll probably need a mortgage loan. Fortunately, there are ways to increase your credit score over time. The sooner you can start building a good credit history the better your future prospects will be.

You’ll learn better spending habits

It may be something of a cliché but buying a home at a young age really does make you more responsible. You’ll face many more challenges in the years ahead so the sooner you can build good spending habits the easier you’ll make everything else. Having that monthly mortgage to pay for, plus utilities and other maintenance costs will help keep your spending in check. You’ll learn the importance of investing in your future and how to manage money which is a skill that takes time to acquire. In a city at notoriously expensive as New York, it really helps to be smart with your money.

You’ll receive tax benefits

The costs of becoming a homeowner may look beyond your means but when you look at the long-term benefits it can actually cost you less than renting. For a start, there are the tax credits you’ll receive as a homeowner which will lower your tax liability. Meaning you’ll have to pay less money in taxes each year. Then there’s the fact that, at a certain point, it’s cheaper to buy than rent in NYC. Research by StreetEasy found that this tipping point is 4.9 years. So if you plan to stay put for at least 5 years or more it makes sense to buy rather than rent.

You’ll enjoy more freedom

It’s not easy having to share a tight apartment with a roommate in NYC. You’ll have to take account of their needs and concerns when making any changes to the property but also mold your lifestyle for the sake of civility. But when you own your own apartment you can do what you wish without anyone’s permission. Getting this at a young age is sure to increase your self-esteem and courage to continue building a bright future. Now there will still be neighbors and the building’s board to take account of but compared with a renter, you’ll have much more freedom in what you choose to do with the property.

Becoming a homeowner in NYC is a big decision and not one you should take lightly. Make sure to consider all your options and decide if now is the right time to buy. Even if you can’t buy just yet you can still put a plan in motion to do it before the end of your 20s. Buying a home might cost a lot of money upfront but when you consider the long-term benefits you’ll see how that investment can pay off.

The post What are the Benefits of Buying a home in Your 20s? appeared first on ELIKA Real Estate.

Why Buying a New Development is Worth Considering

Do you have your dreams set on acquiring a slice of the New York property pie? It is a great time to buy now with the current buyer’s market and considering how much NYC has recovered from the Great Recession home values look set to keep growing over the longer term. As you look through your purchase options, you’ll undoubtedly come across the phrase ‘new developments.’ These are buildings that have just been completed or still under construction and condos can be purchased before completion. Here’s why you should consider buying a new development in NYC.

Everything is brand-new and modern

You’re either one of two buyers. A person with nostalgia for old styles and architectural details like those found in pre-war buildings. Or someone who loves everything to be brand-new and modern. When you choose a new construction building that’s what you get, the latest and greatest. For many millennial buyers, this is precisely what they’re looking for. A building with all the most recent finishes, amenities, and smart technology. For investors who plan to rent out the unit, this can be a big selling point. Best of all, the building will still be regarded as ‘new’ for many years after the purchase. Which means it will command a high price per square foot and be able to compete with other new properties on the market if you buy the right one of course.

There’s an oversupply of inventory

Changes to zoning laws and new tax incentive programs have seen the number of new developments significantly increase over the last few years. This is seen throughout Manhattan and in the most gentrified Brooklyn neighborhoods such as Downtown Brooklyn, Dumbo, and Williamsburg. All of which have seen a dramatic change from primarily commercial/industrial areas to residential areas.

While units in these buildings do command higher prices, the current oversupply of inventory means that buyer’s hold an advantage. A slowdown in the number of sales this year that will likely last until the 2020 election, as well as the oversupply, is making sellers far more open to negotiating. If you encounter a building that will not negotiate today, there is a good chance they will come around sooner than later. The opportunity for price reductions can only increase as sellers/developers look for a way to compete as more new developments come online.

Just like all properties, there are great new developments and then there are lemons. Don’t get caught buying a lemon. – Gea Elika, Principal Broker at Elika Real Estate

The opportunity for tax abatements

With new construction comes the chance for tax abatements. Due to incentives, the developer gets their taxes reduced which then gets passed on to the buyer in the form of lower monthly carrying costs. Up until 2016, it was the 421a tax abatement that created this. Now it’s the Affordable New York Housing Program that will ensure lower monthly carrying costs for several years down the road.

The chance to buy into pre-construction

When looking at new developments to buy one of your options will be pre-construction. This is when the developer has filed plans with the attorney general, has an approved offering plan and is selling units off the plan and through a showroom. With pre-construction buyers have the chance to put money down on a unit well ahead of closing. What’s good about this is that you can take advantage of a buying at Schedule A pricing. Most quality developments see 3-6 amendments before selling through thus when buying at schedule A there is an excellent chance of yielding a paper gain on your purchase. Keep in mind this won’t be as cheap as older buildings, but it will be less expensive than the price once construction is finished.

Depending on the rate of annual growth you may be able to close on the property, put it back on the market and flip it for profit. However, the downside of this is that the building’s completion could be delayed and tie up your invested capital. Also in reality flipping is never a good idea in New York and often does not work due to the high closing costs when buying and selling. In New York flippers often get flipped, the best strategy is to buy and hold.

High return on investment

For investors, new developments offer the chance for substantial gains. They will still be classed as ‘new construction’ for some years after their completion which makes for a great selling point. Also, they have all the latest amenities and designs which buyers (particularly foreign buyers) want to see in an NYC property. However, if you’re going to buy as an investor then (as with any investment) you need to do your research to ensure the best chance of a good return. So long as you think micro, choose the right location, the quality, and finish of the development is of high caliber and you time your resale at the right time you should see a solid return on your original investment.

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