First Time Home Buyer Mistakes to Avoid in NYC: Calculate Your Buyer Closing Costs:
Buying a home for the first time can be a daunting challenge. Make sure you watch out for these common traps, mistakes and pitfalls.
Should I hire my friend as my buyer’s agent?
No. One of the biggest first time home buyer mistakes is being guilt tripped into working with one of your agent buddies. Not only will this cost you the opportunity to earn a buyer agent closing credit, but your friend could cost you significantly more from poor advice, misaligned incentives and a general lack of knowledge.
Here’s a fact. Your buyer’s agent friend will earn 3% of the sale price in commission!
The typical real estate commission in NYC is 6% of the sale price, payable by the seller at closing. The commission is co-broked by the listing agent and shared equally with a buyer’s agent, if the buyer chose to have representation.
So don’t ever be duped by your agent friend that he is helping you as a favor for free. That’s simply not the case. You are ultimately paying for the commission as you are the one purchasing the house right? Therefore, do not let your agent friend pretend that you’re just doing him a small favor that doesn’t cost you anything. Nothing could be further from the truth.
Should I assume that the listed square footage is correct in NYC?
Absolutely not. Blindly assuming that the square footage advertised is correct is a common mistake. The sad truth is, square footage is often exaggerated even for condo apartments which are much easier to fact check than co-op apartments where the square footage is usually a mystery.
Should I trust my lawyer to handle all of the due diligence in NYC?
No. Even though lawyers traditionally handle both legal and financial due diligence on behalf of their buyer clients, it’s a common mistake to assume they’ll be extremely thorough in their research. Even though lawyers have a fiduciary duty to serve your best interests, the fact of the matter is they are only getting paid a flat fee of typically two to three thousand dollars for the transaction.
Should I figure out what closing costs are before making an offer?
Absolutely. A common mistake to avoid is forgetting to ask your buyer’s agent what closing costs are. Most first time buyers won’t even think about closing costs until it’s too late. And most buyer’s agents barely have any idea of what closing costs are to begin with.
Should I work with a discount broker who will give me a rebate?
No. Once buyers get the idea that they can take home some of the commission themselves, they’ll sign up with the first discount broker they find.
This is one of the most dangerous mistakes to avoid because a broker who openly discounts will be resented by the wider broker community, and this lack of cooperation could seriously undermine your chances of securing a home.
Consider working with one of Hauseit’s highly rated, brand name partner brokers instead who will not only provide you with great advice, but who will also discreetly hand you a rebate check at closing. It’s truly the best of both worlds!
Should I consider listings that have been on the market longer?
Absolutely. You have much more negotiating power with sellers of aged listings, typically defined as properties that have been listed for 90 days or longer. Often times, it will be obvious that you are the only bidder. This will be a huge advantage as you’ll be able to actually negotiate with the seller and can avoid having to compete in a best and final offer process.
Reduce Your Buyer Closing Costs in NYC:
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