How to buy property in Manhattan: A step-by-step guide
Posted by Wei Min Tan on September 20, 2023
Manhattan is one of the most desirable places to live in the world, and its property market is notoriously competitive. However, with the right preparation and knowledge, it is possible to buy property in Manhattan and own in perhaps the most coveted location in the world.
The below are the high level 7 steps to buying property in Manhattan.
Step 1: Get pre-approved for a mortgage
Before you start looking at properties, it is important to get pre-approved for a mortgage. This will give you a good idea of how much money you can borrow and what your monthly payments will be. You can get pre-approved through a bank, credit union, or mortgage broker. By the way, U.S. lenders do provide mortgage to foreigners.
Deal example: Client’s new 2 bedroom in Battery Park. Great deal because of the price point and rental yield.
Step 2: Find a buyer’s agent
A buyer’s agent can help you find the right property based on your needs and price point, and they will also negotiate on your behalf. In the U.S., the commissions of both seller’s and buyer’s agents come from the seller. However, the buyer’s agent works in the interest of the buyer.
Step 3: Start looking at properties
Once you have a buyer’s agent, you can start looking at properties. Working with your buyer’s agent, you can start your search online or by visiting open houses. When you find properties that you are interested in, your buyer’s agent will schedule private showings or preview the properties to further filter the list.
Deal example: Buyer client reserved the below 2 bedroom condo at pre-construction stage, waited for completion and rented out immediately. We sold the apartment a few years later. Buy decision driven by location opposite the new Google downtown headquarters (the glass building opposite).
Step 4: Make an offer
Once you have identified the right property, you will need to make an offer. Your buyer’s agent will help you determine a fair offer price based on comparable sales in the area. The seller may accept your offer, reject it, or make a counteroffer. If you and the seller can agree on the price and terms, you will move on to the next step of the buying process.
Step 5: Sign a contract
Before you sign the contract, it is important to have a home inspection done. A home inspection will identify any potential problems with the property. If the inspection reveals any major problems, you may be able to renegotiate the purchase price or walk away from the deal altogether.
Once you and the seller have agreed on the price and terms, both will need to sign a contract. The contract will outline the terms of the sale, including the purchase price, closing date, and any contingencies. A ten percent contract deposit is required with signing of the contract.
Step 6: Obtain mortgage commitment letter and board approval
After the contract is fully executed, you will need to obtain a mortgage commitment letter from your lender and board approval from the condominium association.
To obtain a mortgage commitment letter, you will have to submit a mortgage application and provide your lender with documentation on your income, assets, and debts. The lender will then order an appraisal of the property to confirm its value. Once the appraisal and underwriting are complete, the lender will issue a commitment letter.
Concurrently, your buyer’s agent will help you submit a board package to the condominium association for approval. The board package will include your financial information, personal references, and a copy of the purchase contract. With a condo, the board will 99% approve because if they decline, the board is deemed to exercise the right of first refusal which means they would need to buy the property from the seller at the same terms.
Step 7: Close on the property
Closing on the property, the final step in the buying process, involves signing all the necessary paperwork and transferring the balance of the purchase price to the seller. Once the closing is complete, you will become the official owner of the property.
Buying property in Manhattan can be a complex and challenging process, but it is also incredibly rewarding. By following the steps outlined above, you can increase your chances of success and find the perfect property for your needs and price point.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale