When you are buying a property in NYC there are three real estate services that you will need to have:
- Real estate attorney (contract of sale)
- Mortgage broker or direct lender (financing)
- Title insurance (insurance)
- Home owner’s insurance (insurance)
Real Estate Attorney
Possibly one of the most important decisions you can make when buying a house in NYC is to hire the right lawyer. You’ll need a lawyer who is a real estate specialist as opposed to a general lawyer.
It’s important that you speak to a few and find one that you gel with and has the specific expertise you need. There are many real estate-focused law firms, ranging in size from the very small (1) to the fairly big (50). If your transaction is on the simpler side a smaller firm should be fine, if there are complexities a larger firm can offer a team of lawyers with different skills, eg. contracts, tax, co-op boards, offering plans, landmarks, leasing, commercial, mixed-use, and more.
Mortgage Broker or Direct Lender
The personality of a mortgage broker or direct lender is less important than that of a lawyer. The personality of the mortgage, however, is crucial!
If you have stellar credit, a great high paying job, and a lot of money in savings you shouldn’t have an issue qualifying for a mortgage. Most banks will be willing to do business with you.
However, if you are self-employed, have so-so credit and limited savings, you’ll want to seek out a lender that has the best loan program for you. Generally, mortgage brokers are better for more nuanced loans as they offer a wide selection of loan products for you to choose from.
In NYC, there are many lenders to choose from, including large national banks, to more regional lenders, to local community banks. However, if you are buying in a new development, you must look carefully at the percent of units that have been sold. If the number is lower than 15%, many lenders may not be able to lend. Others may not be able to lend below 35% sold, and some below 50% sold.
Title Insurance Company
Title insurance is the least well-understood service you need to acquire. Many people let their attorney or mortgage company pick the title company for them and don’t realize that you can pick the title company. Depending on the size of your transaction, it is possible that title insurance can be the single largest closing cost.
After you have selected your real estate attorney, you should ask them which title companies they work with. Remember, just like legal fees the cost of title insurance is negotiable and you can shop around!
Home Owner’s Insurance Company
Home owner’s insurance protects you and in the event of a problem — fire, flood, or other damage — and helps your lender gain confidence in your ability to repay your loan.
There are vast options for home owner’s insurance in today’s market and like for mortgage’s these include both brokers and direct insurers. You can easily shop for price and benefits, buy a separate policy or bundle it with other coverages.