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Buying A House In New York: Get The Facts

Rachel Burris9-Minute Read
January 24, 2022

Is your current hometown getting you down? If so, it may be time to start thinking about your next big adventure – and that might mean moving to a new state.

If you’ve got New York on your mind, you likely know that few states offer the type of exciting lifestyle that so many Americans enjoy in the Big Apple. But while you may have always wondered what it’s like to call New York City home, the five boroughs come with a hefty price tag.

Don’t worry, though: The Empire State has far more to offer than just the bright lights of its most famous city.

In this article, we’ll go over what you need to know about buying a house in New York state.

Is Buying A House In New York A Smart Investment?

If you’re thinking of moving, it’s natural that you’d want to know whether purchasing real estate in New York is a good investment. That all depends on where you’re looking.

In New York City, home values are far higher than the rest of the state, making real estate more challenging to afford. However, the rental opportunities are greater in the city, and due to NYC’s historically high demand, investments have often been considered safer.

Regardless of where in New York you’re interested in buying a house, the value of your investment will be dependent on the local housing market. You must pay attention to whether the area is experiencing a buyer’s or seller’s market.

It’s unwise to purchase property at the height of a seller’s market when demand is high and supply is low. But if you find yourself in the midst of a buyer’s market, it’s more likely that you’ll be able to score a deal in a place where you want to live.

The Top 5 Places To Live In New York State

New York state offers its residents a variety of different lifestyles. The most in-demand cities in New York vary greatly in their amenities, job opportunities and cost of living. However, each of the five cities below has much to offer an individual looking to put down roots in the Empire State.

1. Manhattan

  • Population: 1,628,706
  • Median household income: $82,459
  • Median home sold price: $1,000,000
  • Average commute: 32.1 minutes

Manhattan is not only the most expensive city in New York; it’s also the most expensive city in the country. For decades, individuals from all over the world have flocked to the Big Apple to pursue the American dream.

Manhattan is the ritziest borough in New York City, and for most, making ends meet is a constant struggle. When it comes to buying a house in NYC, the average Manhattanite’s salary is too low to purchase an apartment in the borough’s 22.82 square miles.

If you’re thinking about moving to the area, check out Manhattan Real Estate Listings and the Manhattan Trend Report.

2. Queens

  • Population: 2,253,858
  • Median household income: $64,987
  • Median home sold price: $602,009
  • Average commute: 44.1 minutes

Queens may not historically be considered the hippest of NYC’s five boroughs, but it’s becoming increasingly popular. As people have been priced out of Manhattan and, more recently, Brooklyn, the area has begun to gentrify.

It’s no wonder that home buyers have turned their attention to neighborhoods like Astoria, Long Island City and Forest Hills, given that the median household income in Queens is 16% higher than in Brooklyn while the median home price is 25% lower.

If you’re thinking about moving to the area buying in NYC, check out Queens Real Estate Listings and the Queens Trend Report.

3. Beacon

  • Population: 13,968
  • Median household income: $74,450
  • Median home sold price: $340,000
  • Average commute: 38.2 minutes

As some have begun to move out of the big city, areas in the Hudson Valley have hit the spotlight. With a mere 4.74 square miles, approximately 2 hours away from NYC, Beacon is a small yet dense city with a suburban feel.

Once a profitable manufacturing city, Beacon faced tough times until Dia:Beacon, a renowned contemporary art museum, opened its doors. Now, Beacon is a highly coveted area known for its artistic community and scenic trails.

If you’re thinking about moving to the area, check out Beacon real estate listings and the Beacon Trend Report.

4. Rochester

  • Population: 205,695
  • Median household income: $33,399
  • Median home sold price: $109,306
  • Average commute: 20.1 minutes

Located upstate, on the shore of Lake Ontario, Rochester is the home of the University of Rochester and Rochester Institute of Technology. The two large universities not only bring a wealth of jobs but also a steady stream of well-educated residents to the city.

Although the city has seen hard times, with the suburbs being favored for decades, downtown Rochester has made a comeback. Now, the younger generation is taking advantage of the city’s revitalization.

If you’re thinking about moving to the area, check out Rochester real estate listings and the Rochester Trend Report.

5. Buffalo

  • Population: 255,284
  • Median household income: $35,893
  • Median home sold price: $130,000
  • Average commute: 21.1 minutes

Another upstate city making a comeback, Buffalo suffered from a post-industrial decline until a waterfront development helped to turn the city around. Situated on Lake Erie, the city has found ways to preserve its history while revitalizing the area.

As part of Buffalo RiverWorks – the city’s 9-acre entertainment complex – Labatt Blue repurposed 100-foot-high grain silos to create the world’s largest six-pack. Although Buffalo is New York’s second-largest city, it still manages to have a community feel thanks to its friendly residents.

If you’re thinking about moving to the area, check out Buffalo real estate listings and the Buffalo Trend Report.

Things To Think About When Buying A Home In New York

Each state has its own nuances when it comes to purchasing real estate. Therefore, if you’re planning to relocate, you should first learn about what it takes to buy a home in New York state.

Set A Clear Budget

The amount you’ll spend on a new home in New York depends on where you buy. Before you can choose a location, you’ll need to think about your budget. Consider your savings, your income, your existing debts and where you plan on working.

Remember, buying in any of NYC’s five boroughs will cost far more than buying somewhere else further upstate, so it might be worth seriously considering your options outside of the city as a means of being able to afford more.

Find A Trusted New York Real Estate Agent

If you’re moving to a new part of New York state or relocating from across the country, it’s crucial to work with a real estate agent who is familiar with the area you’re interested in. Agents have the market knowledge and skills you need to purchase property in New York quickly and affordably.

They can help you ask the necessary questions, learn about New York’s real estate laws and make the right offer. A good agent will negotiate with your interests at heart.

Best of all, as a buyer, you get to receive free representation, as their commission is paid out of the purchase price of your new home. If you want to find an agent, Rocket Homes℠ can help. We’ll match you with a highly rated Verified Partner Agent who understands the unique challenges of buying a house in the Empire State.

Understand Your Financing Options

There are some first-time home buyer grants and programs available in New York, and some are even offered to individuals who have purchased a home before. As long as you haven’t owned a primary residence in the last 3 years, State of NY Mortgage Agency (SONYMA) has programs that provide buyers with low interest rates and down payment assistance.

Expect A Property Condition Disclosure Statement Form

In New York state, sellers are required to provide buyers or their agents with a Property Condition Disclosure Statement – more widely referred to as a Seller’s Disclosure – before the buyer signs a contract of sale. This form ensures that buyers are aware of any problems with the property that may exist before they are legally bound to purchase it.

Always review the Seller’s Disclosure in detail before signing on the dotted line. If you have questions about this disclosure, your real estate agent can answer them quickly.

Consider Working With An Attorney

Although you can purchase a home in New York without a real estate attorney, it is atypical to do so. The vast majority of buyers and sellers are represented by attorneys, so if you try to buy a home in New York without legal representation, you’ll be at a considerable disadvantage.

Attorneys can help review closing documents and contracts to make sure the transaction gets completed properly.

Know You’re Not Legally Bound Until The Contract Is Signed

If you’ve made a verbal offer on your new home, you’re not legally required to follow through with the transaction. In New York state, it’s not until you sign a contract of sale that you’re legally bound to purchase the property.

However, once you sign the binding contract, assuming all contingencies have been met, you must buy the home or forfeit your earnest money deposit.

Be Prepared To Make A Down Payment At Signing

Regardless of whether you’re getting a mortgage, you must make a down payment at signing. This down payment, which is typically 10% of the purchase price but can be lower, acts as your earnest money deposit. You pay it when you sign the contract of sale to demonstrate your intention of following through with the purchase.

If the seller accepts your offer and signs the contract, this down payment is applied to the purchase price of your home. However, if the seller doesn’t accept your offer, the funds are returned to you immediately.

Plan To Pay More For Property Taxes

Unfortunately, buying a house in New York means you’re committing to pay high property taxes. The median New York property tax is $3,755, which is 96% higher than the national median. Therefore, if you choose to purchase property in New York, you should keep these high property taxes in mind when determining your housing budget.

How To Buy A House In New York

Although purchasing property can be a stressful process, there are really only seven steps involved in buying a house in any state, including New York. Let’s take a brief look at each one.

  • Save for a down payment. To buy a house in New York, you’re going to need a considerable down payment. The amount of money you’re able to save will also play a role in determining how much house you can afford.
  • Get mortgage preapproval. You should get preapproved for a mortgage even before you start looking for a house, so you know how much money a lender is willing to give you. When getting preapproved, a mortgage lender will review and verify your income, assets and credit history so that you’re guaranteed to be able to obtain a loan when the time comes.
  • Decide what you want in a house. The process of finding a home in your price range is one of give and take. It’s important that you determine your priorities before you begin looking at the houses on the market, so you know what you’re willing to sacrifice.
  • Find an agent. You want a good real estate agent who is knowledgeable about the local market and makes you feel comfortable, so it’s best to interview a few different real estate agents to find one who meets your needs.
  • Tour homes. As your agent sends you listings that closely match your search criteria, you’ll review the photos and descriptions of each home online and choose the ones you’re interested in seeing. When touring homes, you should take photos and make notes of what you like and dislike about each home, as this process can take longer than expected. Pay particular attention to the home’s location and condition.
  • Make an offer. When you find a home you like, your real estate agent will complete a comparative market analysis of the property to determine what its fair market value would be. During this process, your agent will take into account current market conditions and the recent sale prices of similar homes in the area. Your agent will help you select a strong offer, and your attorney will write up a contract of sale. When you sign the contract, you’ll also make a down payment into an escrow account. If the seller accepts your offer, the funds will ultimately be applied to the purchase price of the home.
  • Close on the house. When you get to the closing table, you’ll have to sign a slew of documents and provide the rest of the funds and closing costs. If you’re obtaining a mortgage, you’ll close on your loan, and your loan amount will be transferred to the seller.

The Bottom Line

Learning about the nuances involved in buying a house in New York state is the first step to relocating. New York offers a wide variety of cities, suburbs and towns, making it easy to find a place that suits your lifestyle and personality. If you’d like help finding the perfect house for this next chapter in your life, get matched with a real estate agent today.

*The data presented on median home prices comes from the Rocket Homes Real Estate, LLC trend reports and reflects September 2020 pricing. However, the median home prices for Manhattan, Queens and Brooklyn were taken from StreetEasy’s August 2020 data. The other statistics in each listing were sourced from the U.S. Census Bureau, including 2019 population estimates, 2018 median household incomes, 2014 – 2018 mean travel time to work for those 16 and older and land area.

Rachel Burris

Rachel Burris is a writer covering topics of interest to present and future homeowners, as well as industry insiders. Prior to joining Rocket Companies, she worked as an English teacher for the New York City Department of Education and a licensed real estate agent for Brown Harris Stevens. She holds a bachelor's degree in creative writing from Bucknell University, a postbaccalaureate certificate in psychology from Columbia University and a master's degree in English education from Teachers College, Columbia University.