What First Time Buyers Should Know

What I Wish I’d Known

First-time buyers share what they learned the hard way.

That down payment you think is enough? It may not be enough.
Unlike condos, many cautious co-ops now require significantly more than the typical 20 percent plus a hefty cash reserve. “It changes [your] price point,” says psychologist Rebecca Gonzalez. “I had been looking at places that were $650,000 to $700,000, and in the end, we had to find something closer to $500,000.”



Sweat the small stuff.
Hsing Wei, a digital designer who became a homeowner in 2009, focused on the basics, like the building’s location and finances. She didn’t bother with details: where the light sockets were, how a dryer needed to be vented. “These aren’t make-or-break, but they affect how much work you’ll need to do.” You may have to install more lighting, for instance, or completely replace your furniture.



Your must-haves may not be so necessary.
“I wish I wasn’t so set on the obvious neighborhoods,” says beauty editor Alex Samuel, who bought a one-bedroom last year. She wanted Williamsburg and settled on Greenpoint—and loves it. “I gained a sense of community, and because I bought in what’s up-and-coming, my apartment’s already gained $50,000 in value.” Plus a new water-taxi stop nearby, for fast trips to Manhattan.

Looking to buy in a New Development Project?

....You may want to look in Brooklyn

 Developers are rapidly running out of space to build new projects in Manhattan, but brownstone-dotted Brooklyn could be poised for a building boom, according to a new report.

Brooklyn has in the early planning stages as many as 14,000 new residential units in the coming years, compared with Manhattan, where just 5,000 new units are in the early planning phase, according to a new report by Nancy Packes, a consultant to some of the city's largest developers.

That's primarily because Manhattan is running out of new sites that are zoned for residential use, according to Ms. Packes.

Developers, such as AvalonBay Communities Inc., Stahl Real Estate and Douglaston Development already have large new projects planned for downtown Brooklyn and the Williamsburg waterfront in the next few years.

But Ms. Packes said developers need to pay close attention to the demands of tech and creative workers, who make up a large share of the borough's renters.

Her report shows that 34% of Brooklyn renters are tech or creative workers, compared with 25% who are creative and tech workers in Manhattan, according to data provided by On-Site.com, a provider of electronic tenant screening and lease-processing services for landlords.

Creative workers, in particular, spend a lower proportion of their incomes on rent, according to her data. That means they are likely to gravitate toward simple, tasteful new construction at lower price points and away from modern towers loaded with amenities.


"The idea of luxury, it may finally be finished, at least to these emerging neighborhoods," Ms. Packes said.


Average rents for full-service buildings in Brooklyn remain well below Manhattan. The average rent for studios and one- and two-bedrooms in Brooklyn is currently $2,776 a month. In Manhattan, the average rent is $3,888 a month, according to the report, using data provided by StreetEasy.com.

Brokers and developers agree that they are seeing demand in the borough for brownstones or new construction with classic touches, and less interest in shiny modern construction.

"That charming brownstone feel is what people tend to like about Brooklyn," said Anthony Dellecave, a broker with Citi Habitats, who specializes in Brooklyn. "From a developer's perspective, I'd stay away from the modern, luxury high rise and focus on old-world charm and prewar character."

In one recent example, Two Trees Management saw strong demand for its new rental building, Gair 2, on Washington Street in Dumbo. The 106 units in the building rented in about three months at some of the highest prices ever for the neighborhood—about $4,900 a month for a two-bedroom, according to the developer.

"In Dumbo the amenities are the location," said Asher Abehsera, a managing director at Two Trees.

Other similar projects are planned, such as 30 Henry St., a low-rise project in Brooklyn Heights with full-floor units designed to emulate townhouses.

"When you tell people that you live near Union Square, it sounds like a desirable area. In reality, it's pretty overrun by NYU students and old rich people," according to Jeff Baum, a 30-year-old paralegal who recently moved with his wife from Union Square to a neighborhood near Brooklyn Heights and Boerum Hill. Brooklyn, he said, "seemed more of our speed, the type of area we wanted to live in."

Are you a Buyer? Dont make these mistakes...

Most people buy and sell a home just a few times during their lives, so even if you consider yourself a good negotiator, chances are that you’re bit rusty when it comes to acquiring or unloading a co-op or condo.


So with the spring market just ahead of us, we reached out to a dozen or so real estate brokers and closing lawyers to compile this list of top negotiating blunders commited by sellers and their brokers.

1. Don't talk too much in front of the seller’s agent

“Buyers tend to talk too much in the presence of the selling agents about their financial information before they even make an offer,” says Maria Pascal of The Heddings Property Group. “This information is best left confidential and should be handled by their real estate broker.”

The only thing you should be sharing with the seller’s agent is your “apartment needs and wish list," she says. "Ask questions but don’t show your cards."

You may give the agent reason to believe that you can afford more than you initially offer--or, unbeknownst to you, you might disqualify yourself as a buyer by inadvertently underselling your qualifications.

“Presentation is everything and your broker knows how to present your net worth statement properly,” says Pascal. “Oftentimes even the most educated buyers leave out assets that they didn't realize are counted towards their net worth.”


2. Don't make a lowball offer that isn’t--or can’t be--defended

Starting with a really low offer “just to see if a seller is desperate enough to take it" is a mistake, says Bevan Versfeld of Rutenberg Realty. “The broker for the seller will recognize it"--and you may "insult" the seller into refusing to negotiate with you.

Rather than pulling a number out of a hat study comps in the building and elsewhere, talk to your broker, and “make an informed offer" --accompanied by a well-reasoned analysis and comparables--that makes sense to the other side too, even if they don't like it.


3. Don't ask for everything at once

Pick your battles when you make your first offer, says Kevin Kurland of The Spire Group. Making a lowball offer and insisting on closing in four months even though you know the seller wants to close in two will probably not get you very far.


4. Don't present your best offer first

“A lot of times when people negotiate they put everything on the table right away,” says Holly Sose of City Connections Realty.

The problem lies in the fact that most times, the other side assumes that you’re asking for more than you expect to get, she says. They try to chip away at your position; meanwhile, you’re stuck digging in your heels with nothing left to give.

“Nobody appreciates anything they didn't ask for, and if you give it all up at the beginning, they don’t understand you’re being generous," says Sose. “It makes the transaction go so much better if everyone can give and take.”


5. Don't seem too enthusiastic

Stay neutral in front of the seller or their broker: “Stop saying that you picture yourself eating in their kitchen or hanging out in their soaking tub,” says Rodrigo Guzman of Rutenberg Realty. “Be more neutral so the seller and their broker won’t think they can yank on your heart strings during price and concession negotiations.”


6. Don't forget to write a proper offer letter

An offer is more than just a number scribbled on a piece of paper. Your offer letter should be carefully crafted, typed in a Word document on your agent’s letterhead (scanned and emailed is fine) and explain the offer as well as the reasoning behind it, referencing supporting information like comparable sales.

“It communicates a lot more sincerity if it’s a written letter that takes time to delineate the points supporting the offer,” says Wei Min Tan of Rutenberg Realty.

Moreover, he says, “usually if it’s written, the seller’s broker will show it to the seller, and these points will not be lost. A letter also shows that you are a nice person who is taking the time to produce a letter, rather than presenting 10 other offers on other properties at the same time.”


7. Don't sit around twiddling your thumbs if the seller doesn’t respond to your lowball offer

“Patience is important, but unless you are willing to lose the property, this is a very dangerous tactic,” says Lori Ben-Ari of The Heddings Property Group.

“If the property has been on the market for a short time, and there are other offers, chances are the property is priced well,” she says.

“When the seller does not counter, the buyer should go back to the selling broker and get a sense if the other offers have been countered. If this is the case, the buyer needs to come in with a stronger offer, at least within 5% of ask. If the property has been on the market for awhile, the buyers can afford to have more patience, but should still check in with the selling broker on a regular basis," she says.