Is It Hard to Find a Place in New York City on My Own Versus Using a Broker?

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Q & A with Dottie Herman
 
Question: I am relocating to NYC from California. I am learning about the NYC market and trying to decide if I need to hire a broker. If we do this, how much can we expect to pay in broker fees? Also, is it much more difficult to find a place on our own?
 
Answer: I'm glad to hear that you're moving to New York-this city is truly unlike any  other in the world, and I hope you love it as much as I do. Especially considering that you and your boyfriend will both be new to New York, I highly endorse engaging a real estate professional to help you with your apartment search. You will learn not only about the various neighborhoods, but will also benefit from your professional's expertise in guiding you through the process, which may differ from those in your respective regions.
 
If you are renting, in most cases, you will be responsible for paying the rental brokerage commission fee, which is customarily 15% of the first year's rent. If you are purchasing, the seller usually pays the brokerage commission.
 
Question: I'm recently retired and thinking of selling my home which I've lived in for over 30 years.  What's the first step?
 
Answer: Do your homework.  Chances are that you've not followed the market closely in recent years and since your home is an important asset, it is important to update yourself on the local market.  Go online and look to see the sales and listings that are similar to your home in your local market. 
 
Question: How much money do you have to put down to purchase a $1 Million dollar home? Is it still 20%? Are there any benefits to putting down more than 20%?
 
Answer: There are programs available that let you put as little as 10% down on a million dollar home.  The interest rate would likely be better if you put down 20%. With 10% down there are financing options that allow a borrower to take a first mortgage at 80% and second mortgage for 10% of the purchase price.  This allows the borrower to avoid paying mortgage insurance.  Some lenders will also offer one loan with mortgage insurance up to 90% of a 1 million dollar purchase.
 
Question: Can you get a mortgage on a second home? My husband and I want to purchase a summer home in the Hamptons, but can't pay all cash and we need some financing, especially since the home needs work. Is it possible in today's market to get a loan for a second home purchase?
 
Answer: Thankfully there are mortgages available on Second Homes including Jumbo Mortgage financing. When financing a second home purchase, the lender may require a slightly larger down payment than a primary residence, and all of your monthly debt including any rent, or other mortgages will need to be taken into account when qualifying you for the financing. Your best bet is to get pre-approved to make sure you are ready to make an offer on that vacation home of your dreams.
 
Question: I recently had a few credit issues, which have been resolved, but they have lowered my credit score. Is there a number where you can't get financing? The score is in the 500s at the moment, and how long do I have to wait for it to go back up?
 
Answer: Most lenders want to see a minimum FICO of 620. Since interest rate are based on FICO scores, improving your credit score as much as possible will make a big difference in the interest rate that you will pay. Every month that you pay your bills on time will slowly improve your score. Keeping low balances on your credit cards will help as well.
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