Honest Home Buying Experience From A 25-Year-Old During COVID-19 In New York City

Buying my first home in New York City has always been on my mind for a very long time, but I could never make it a reality until this year. We have been observing the real estate markets for over a year, but in March of 2020, just when the NYC lockdown started, my girlfriend and I finally decided to start condo hunting seriously. We thought it would be great to start looking at condos and townhouses at the beginning of the new year, but then COVID-19 came along.

DISCLAIMER

This article is not a guide in what you need to do when buying a home. This is just my experience of buying a home during the pandemic in New York City. Please talk to a real estate agent, mortgage lender, or a real estate attorney near you for any questions you may have on the process. Your process may differ based on city or state and local COVID-19 restrictions.

How COVID-19 Affected Our Home Buying Process

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Photo by Victor He on Unsplash

At the start of the pandemic, the real estate market was on hold for a few months. Thanks to the delay, we spent most of our time looking at condos online using online tools like Compass, StreetEasy, and Zillow. I highly suggest looking at all the homes you are interested in first because the property sometimes does not look like the ones in the photos — some photos may look bigger thanks to the wide-angle lens or how it “would” look like when renovated. Before we can start looking at the condos in person, it became mandatory to get a preapproval first and then sign a COVID-19 Liability waiver via DocuSign. The new rules were implemented to limit the number of people from entering the property simultaneously. After checking out the first three condos, I found it less pressuring since we get to spend more time looking around instead of being distracted by other competitors around us. Overall, the extra caution was not a big issue, and we were able to spend more time to look around the property.

Our Experience Getting Preapproval

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Photo by Tierra Mallorca on Unsplash

When it comes to getting a preapproval letter from a bank, we decided to shop around specifically to compare the interest rates. We were looking for a 30-year fixed and the best rates. Please note the rates depend on your lender and the state of the economy, so make sure you shop around for the rates and programs that best benefits your own financial situation. As an introvert, I found it easier to talk to the lender agents on the phone instead of meeting in person. The process was very straightforward. From our experience, every lender had asked for the same information to be uploaded on their bank site — recent pay stubs, bank statements, W2 form, and tax returns. If you want to start checking out the homes right away, shop around first then go with one bank for the offer.

The Seller’s High Expectations From Buyers

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Photo by Emiliano Bar on Unsplash

The pandemic has made many sellers more cautious of who they do business with due to the high rise of unemployment, which is forcing the buyer to get a preapproval first before searching for a home. Luckily, we were serious about looking for a new home, so the process was no issue for us. Last month, we put an offer on a condo located in Cobble Hill; however, we were bidding against another buyer with better finances than us. We ended up losing to the other buyer. After all, the seller felt more comfortable because the other buyer had more money in their bank account at that time. It may seem unfair to others, but from the seller’s perspective, it makes logical sense to go with the buyer that has a higher chance to close — especially with the current pandemic that makes it hard to tell what will happen in the future. We were a little sad that we lost the chance of getting the condo, but it is not the end of the world, so we kept looking at other condos. What I learn from this experience is never to put too much hope in one condo. It will be devastating when it falls through.

Our Experience During Contract Signing

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Photo by Cytonn Photography on Unsplash

After viewing eight different condos, we finally decided to go with one that we liked a lot and fit our finances in Brooklyn with the down payment, property tax, and common charges. At this point, we needed to start looking for a real estate attorney, as this was a must for New York. Once we put in an offer, it took a few days until we heard back. After both sides are happy with the offer, we called our attorney to begin doing their due-diligence — I suggest you hire a reliable attorney specializing in your area by asking around your friends, colleagues, or your real estate agent for their recommendations. To vet for attorneys, make sure to ask any questions you have about the process and about their terms, but also to see if they are qualified. After retaining an attorney, the attorney will start the process by engaging with the seller’s attorney and sending over the contract to us — we signed it after a few days. From there, we waited for the seller’s attorney to send us the escrow account information to wire the 10% of the downpayment as earnest money. I would suggest going to your bank branch or by phone call. For me, I was using American Express Personal Saving (High Yield Saving Account) that contained the amount for the downpayment. If you are in the same boat as me, then note that you must initiate a wire transfer by phone call only. During the process, we notice the seller’s attorney did not give us all the information that we needed to complete the wire transfer, so below were everything that the bank required from me, so check below for all the information you might need —you can thank me later! A few days later, the sellers signed the contract, and we were now ready to talk to the loaner.

  1. Escrow Company Bank Account Number
  2. Escrow Company Name
  3. Escrow Company Address
  4. Escrow Phone Number
  5. Bank Routing Number
  6. Bank Name
  7. Bank State
  8. Bank Address
  9. Bank Phone Number
  10. Escrow Number/File Number/Reference Number
  11. Property Address You Are Purchasing
  12. Escrow Agent Name (Optional)

The Bank’s Mortgage Closing Process And the Board Application

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Photo by Precondo CA on Unsplash

After both parties signed the contract, our contract gave us 60 days to 90 days to close. Since we are getting a mortgage for the condo, we went through the loan process with our lender. We ended up proceeding with JP Morgan Chase. Our lender went through the loan estimates and the whole process with us on the phone. The Chase’s My Home mortgage portal had everything online containing the tasks that we need to do and allowed us to upload the necessary documents. The rest of the mortgage process is the same old procedure — Applications received → Processing → Underwriting process → Approved and clear to close → funds received. During the underwriting process, we noticed that our documents for some tasks kept getting rejected with no explanation of why, so when that happens, make sure to discuss with your lender so that any issues will be resolved right away.

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The process from my experience

At the same time, we worked with our real estate agent on providing all the documentation, signed forms, and certified checks for the board application. With condos, co-ops, and townhouses, they have HOA boards that review board applications upon the purchase of a home within the building.

The Overall Experience

COVID-19 made the process a bit inconvenient for us as it was terrifying to go outside during those first few months of 2020. We also had to sign a waiver or get a preapproval in advance before seeing the properties in person. The overall process was mainly through email, texts, and phone calls with the lender, real-estate agent, and attorney. Throughout the process, I have learned a lot so trust me that I was a complete amateur with no understanding of the terminologies until I talked with my real-estate agent and attorney. Also, I will recommend having additional cash excluding down payments such as the closing fees, attorney fee, and the board application fee. You also want enough money for moving and new furniture as well!

My girlfriend also has a YouTube playlist of three videos at the time of writing this article documenting our experience! It will explain what we were looking for, our process, placing an offer (then losing it), eventually getting our offer accepted, and video tours of condos we were looking at! More videos to come when we finally close, move, and make the condo our home!

I hope my experience will help some of you, and I hope you all the best!

New Yorker | Technology Consultant | Code for Fun!

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