Learn about the NYC home buying process from start to finish.
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So You Want to Buy a House in NYC
So you want to buy a house in NYC. It’s a common and understandable dream!
Owning your own house can give you an unprecedented level of independence that you simply can’t enjoy via other types of home ownership in the city. But before you jump in head first, here are some key things to keep in mind if you want to buy a house here in NYC.
Repairs and Updates Are All on YOU
As a homeowner, you’ll have the sole responsibility for maintenance and repairs of the entire building. That’ll include things like (but not limited to) the following:
- Roof repair
- Boiler replacement
- Gas and water line repairs
- Garbage and recycling
- Yard maintenance
- Sidewalk maintenance (if part of the property)
Some of these items can cost thousands of dollars while others will be ongoing costs throughout the course of your ownership (sometimes to the tune of hundreds of dollars per month). Because of this, you’ll want to keep a “building reserve fund” on hand – a chunk of money kept specifically to address any maintenance issues as they come up. Can’t afford to do that? Then you might want to reconsider whether or not a house makes sense for you.
If It’s a Multi-Family, Financing May Be Different
Although two family homes are financed similarly to single family homes, three and four family homes often require higher down payments. Why? Because, in the bank’s mind, more units equals a higher risk of default. As a property owner, you’re likely going to be dependent on rental income to cover the cost of your mortgage. So if someone loses their job and can’t pay rent, you might find yourself struggling to cover your own costs.
Inspections Are a MUST
In co-ops and condos, inspections are often optional because 1) you can get information about the building’s state of repair during due diligence, and 2) any structural issues will be addressed by all owners of the building together, so you share the cost.
But, that’s not the case when you’re the sole owner. Failure to catch structural issues can be extremely costly when purchasing a standalone home. So do not skip on having an inspection!
Certificate of Occupancy Needs to Match Your Use
All residential homes (with a few exceptions, such as very old buildings) have certificates of occupancy (“CofO”) which grants the property owner the right to use it as either a 1, 2, 3 or 4 family residence. If the home you have is being used as a 3 family, but it’s CofO is for a 2 family, you could be in a lot of trouble. Plus, correcting an erroneous CofO can be costly and time consuming. A good real estate attorney will verify the CofO during their diligence process.
Be on the Lookout for Illegal Additions
Does the house have a nice deck that someone put in? Maybe a new level that was built or a new sunroom? Be sure to have your attorney check that the addition was legal. Just because it’s built nicely doesn’t mean it was built legally!
Have more questions about buying a house in NYC? Feel free to contact me! I’m always happy to help!