How to be Prepared When Submitting an Offer for Rent or Purchase

The Weekly Recap

Good morning and happy Friday! Interest rates fell keep falling, more homes are coming to the market amidst rising prices. NYC congestion pricing raked in almost $50m in its first month, US Citizenship now costs $5m for a Gold Card, bitcoin is down 25% from its all time high, pending home sales in January were impacted by all the early year storms and Citi accidentally credited $81 trillion to a client account proving again that money isn’t real and are just numbers on a computer screen.

If you missed last weeks newsletter Why Holding Off On Buying A Home is A Bad Idea, you can read that through the link.

How to be Prepared When Submitting an Offer for Rent or Purchase

For the second week in a row I’m starting this little op-ed section the same way, by reminding you that in real estate, Time Kills All Deals! So the best way to win the deal is to be as prepared as possible and that includes when you are submitting an offer. Here is what you need to do to be ready to submit a well-prepared offer (with your agent of course) to help win in a competitive marketplace. There is no worse feeling as a buyer than when you exhaust the market, find the home you’ve finally been looking for and then lose out because you didn’t have all your ducks in a row.

For Buying a Home:

For all offers we need to submit three things. One, is a pre-approval letter (if you’re financing), two, is information for a real estate attorney and three is what is known as a REBNY Financial Statement.

Pre-approval- This is a super important document to have from your bank if you are going the financing route. Depending on the institution its could take anywhere from 24-48 hours to get this document. The reason why it is so important is because it helps you determine your purchase power by what the bank is willing to lend to you. Since you will also have to provide the bank with financial documents in order to get pre-approved, its a great exercise in aggregating important information that you will need for the REBNY Statement.

Attorney- Having an attorney ready shows the sellers that you’ve already established a team of people who will be representing you and allow for the listing agent to create what is known as a deal sheet. That is then circulated to all parties involved including your attorney where they can begin their due diligence process. DO NOT use your uncle who is a divorce attorney in Ronkonkoma, it is incredibly important that you use an attorney who transacts specifically in the market you are purchasing in and is a real estate transaction attorney.

REBNY Financial Statement- In different markets, this form is referred to as a litany of things, but in NYC this financial statement outlines your assets and liabilities to show the seller how strong of a candidate you are financially to purchase their home. This document is a MUST have if you are purchasing a CO-OP and also important for Condo purchases as well. It operates as a true attestation of what your current financial situation is and your ability to meet certain post closing capital requirements for CO-OPs.

For Renting a Home:

Rental requirements vary from market to market, but here in NYC where the rental market is super dynamic with high barriers to entry and limited inventory, not knowing what to have handy can lose you the apartment of your temporary dreams.

Income Requirements- In NYC especially, all landlord/tenant laws are skewed HEAVILY in favor of the tenant which makes landlords very cautious when reviewing applications. The income requirements are 40x the monthly rent in annual income. If you are looking for a $5000 apartment, you’ll need to show $200,000 in annual income. If you don’t make 40x then you can go the guarantor route. The guarantor must make 80x the monthly rent in annual income. The reason for the increase is because the landlord needs to make sure that individual can care for themselves and you in case you default on payments.

Financial Documentation- Each building or owner will ask for variation of financial documents but the standard practice is having your last two bank statements ready to present with your application. If you are international, you MUST have a US Bank Account with funds in it in order for your application to be approved. Landlords will also ask for your two most recent paystubs or last two years of tax returns if you are self employed.

Proof of Employment- In some instances you may get asked for this from your company and its better to have it and not need it, than need it and not have it. It should state your salary, bonus (if applicable) and your length of employment with the firm. This document will definitely be necessary if you are about to start a new job and do not have recent pay stubs to provide.

Whether you are buying or renting, it is paramount that you work with your agent to make sure you have everything you need in order to submit a well rounded offer. As the market heats up moving into Spring, we will see more competition come in for the same limited inventory and a great way to stay ahead of everyone else is to make sure you’re prepared with the above.

If you’re thinking about buying or renting (or selling), don’t hesitate to reach out to see how we can work together to realize your real estate goals.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past WEEK as well as newly signed contracts in Manhattan.

Mortgage Rate Update

Mortgage rates decreased to their lowest levels in over two months this week. As rates continue to inch downward and with stability returning to the rate market, the modestly improving home inventory environment and increase in buyer activity is an encouraging sign for consumers as we approach the spring selling season.

News You Can Use

• Trump’s SALT Tax Promise Hinges on an Obscure Loophole Bloomberg

• Home Buyers Are Finally Getting the Upper Hand Again Wall Street Journal

• NYC’s Congestion Pricing Pulls in $48.6m in First Month Bloomberg

• US Pending Home Sales Tumble in January Due to Storms Reuters

• US GDP Held Steady While Inflation Marked Higher At End of 2024 Bloomberg

• Fed’s Jefferson says AI is Speeding Investors’ Reactions to Central Bankers’ Messages Reuters

• US Home Prices Increased Strongly in December Reuters

• Bitcoin Down 25% From All Time High Bloomberg

• Home Sales Drop Nationwide, Increase in the Northeast, as Prices Near All Time High CNBC

• Trump to Offer ‘Gold Card’ Visas for $5 Million to the Rich Bloomberg

• Citi Accidentally Credited a Client Account $81 Trillion Bloomberg

• 11 Completely Free Things to Do in NYC in March The Gothamist

The Deep Insight

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Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or to share what you're experiencing in this market. Looking forward to hearing from you!