Buy First or Sell First??

Buyers often need to sell their current home in order to finance the purchase of a new home. I’m often asked if I recommend buying first or selling first. It would be ideal to close on the home that you are selling in the morning and close on the home that you are buying that afternoon. However, the precise timing is often out of our control.

You’ll want to avoid covering two mortgages simultaneously.To reduce the element of risk, I recommend being prepared for your search. That means:

1) Hire an experienced real estate attorney in your area. Not your uncle who is a tax attorney and not your college roommate, who is a real estate attorney in another a state. A good attorney can structure a contract which gives you time on either end and anticipates most scenarios.

2) Pre-qualify for a mortgage.

3) Know the market. Before listing your current home, browse some Open Houses, so you have a realistic sense of what your money will get you.

4) Begin “decluttering” your home and do any necessary repairs before putting it on the market.

5) Most importantly, sign with a broker who you like and trust. That doesn’t necessarily mean the broker who has the most listings or the biggest team. It means the broker who is going to make you a priority. Buying and selling homes is stressful, and you want to make sure that your broker is responsive and sensitive to you and your financial needs.

The average Manhattan listing is on the market for 6 months. Don’t wait until you are in contract to buy a new home to list your current home. If you need to sell quickly, list your apartment below market price.

Good luck!

Investing in East Harlem

I looked at an investment property in East Harlem yesterday. In the past,I have not been bullish on East Harlem. As a social worker in the early 1990s, I often visited indigent clients who lived there, and let me tell you, it was a scary neighborhood.

Now, as a real estate agent, my clients have more disposable income and view East Harlem not as the home that they wished to escape, but rather as an investment opportunity.

So, does East Harlem represent a good investment opportunity?

As prices in the desirable Manhattan neighborhoods, such as the Upper West Side and Tribeca, skyrocketed from 2000-2008, “fringe” neighborhoods, such as Williamsburg, Hamilton Heights, Long Island City, and yes, East Harlem, became the “new frontier”. The idea was to give middle class New Yorkers and the artist community an affordable home in or accessible to Manhattan.

However, in a downturn, the “fringe” neighborhoods are the last to recover. When prices on the Upper East Side and Chelsea drop, many middle class New Yorkers and artists prefer to move into these more established neighborhoods, with coffee shops and supermarkets easily accessible.

That’s the prejudice that I carried with me to East Harlem yesterday. What I found on the streets surrounding the new Costco on East 116^th St. was some impressive gentrification. Absent were the drug dealers so prevalent in 1990s and perhaps still prevalent on other blocks. It is clear that money and hope have been invested for a better future for East Harlem.

So, this question is: If I had $3 million to invest, would I buy a building in East Harlem?

While I am less pessimistic about East Harlem’s future than I was a year ago, I’d still recommend a more diverse portfolio, purchasing a few 1 and 2 bedroom condos on the Upper West Side or in the West Village, where you can enjoy a nice rental income and the knowledge that your investment will increase in value.

First-Time Home Buyer's Tax Credit

First-Time Home Buyer’s Tax Credit

If you are IN CONTRACT to buy a home by April 30, 2010 you may be eligible for an $8,000 tax credit.

What that means:

1) There is still time to take advantage of this offer. If you find the apartment of your dreams, I can have you in contract within two weeks of making the offer. You must close by June 2010.

2) Even if your income is above $125,000 for single taxpayers and $225,000 for joint taxpayers, you may still qualify for a tax credit amounting to less than $8,000.

3) Already own a home? You may qualify for the Move-Up/Repeat Home Buyer Tax Credit, if you’ve lived there for more than 5 years. For more information, http://www.federalhousingtaxcredit.com/faq2.php

Please speak to an experienced and certified accountant for information related to your individual situation.

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