Advice for a first time buyer

430 sounds reasonable. In my experience going down about 10% off the listing price is a fair starting bid. I bid on about 10 places- the only people willing to negotiate with me were the ones where I started at 10%. before that I had been knocking off 15-20%.

consider waiting to buy and potentially saving 25% - 50% more.... any condo for 430K can only be a small place with limited upside. what is the rush?

Advice = don't buy. Any condo you are buying that cheap you can probably rent something nicer for $1800/month.

The place is small but cozy. It's a really nice development when I've seen a lot of crappy build outs.
I am not in a rush to buy, but I don't want to lose out on an opportunity and I feel like paying rent is just throwing money away..
I can definitely be patient and wait it out, but will the market really go much lower??
FYI, I'm interested in the Williamsburg/Greenpoint area..

"I feel like paying rent is just throwing money away."

This is one of the National Association of Realtors' talking points. What they neglect to tell you is that when you purchase a home, the bulk of your expense for many years goes to mortgage interest and, in the case of condos, taxes and common charges. In a standard 20% down, 30yr fixed mortgage, you don't reach the 50/50 point between interest and principal for 18.5 years (month 222).

If you can rent an equivalent apt for less than the mortgage interest and monthlies, minus the tax deduction, plus the opportunity cost of your down payment (in most cases a very easy thing to do in this market), then each month you are actually throwing money away by owning. The exception, of course is a market when both rents and purchase prices are rising, in which case the difference between costs shrinks and you benefit from the home's increased value. The thing is, we're in a very different market now. Search for the New York Times or Housemath rent vs. buy calculator. Notice that when you anticipate modest appreciation (not to mention the current state of deflation) and small rent increases (again, we're currently experiencing decreases), there may be no length of time where buying beats renting, financially speaking. You also have to factor in transaction costs both in and out.

As for Williamsburg and Greenpoint, I'm not putting down the neighborhoods - many people love them - but there is a tremendous amount of inventory available and another tremendous amount coming at a time when we've seen lender requirements become much more restrictive. I don't think you have to worry about lack of opportunity.

thank you everyone for your advice!

"If you can rent an equivalent apt for less than the mortgage interest and monthlies, minus the tax deduction, plus the opportunity cost of your down payment (in most cases a very easy thing to do in this market), then each month you are actually throwing money away by owning. The exception, of course is a market when both rents and purchase prices are rising, in which case the difference between costs shrinks and you benefit from the home's increased value. "

Wrong.

In the long run, you always win when you own, because in the long run, you will eventually pay off your home and OWN it. Renters will continue to pay ever-escalating rents forever.

Here's the X factor nobody ever talks about on these boards - what is your financial situation & have you found a home where you want to live & will be happy. ARe you going into debt that is larger than or equal to your rent?

A couple of years ago I could not afford to buy the same kind of apartment I could afford to rent, so I rented. Now, I can afford a much larger place for the sort of money I have saved. I have to put it someplace, so why not a home I love in a neighborhood I want to live in? Because I am paying in cash am looking for the long haul & not a short flip, my monthly expenses will be down significantly (only maintence, taxes & utilities, which will equal far less than my rent).

NYCMatt, don't fool people. You dont ALWAYS win when you own. People who bought in 2007 and divorced and sold in 2009 LOST a lot of money. Get it?

I really like the place but if I cannot get a good deal on it I will pass on it since I know that there is so much development in 11211 now there's bound to be something(hopefully some quality buildings and not more cookie cutter grey/glass ones..) I'm feeling new2brooklyn's comment about maybe continuing to rent and saving more money and hopefully finding something larger in the future?

From a tax perspective, I believe the seller would prefer the lower price as opposed to higher less closing costs.

The seller would not care for tax perspective. It would end up being the same as they would write off the closing costs as expenses before paying taxes. Unless you're talking about transfer agent fees. Those are only 1% ($30K = $300).

NYC Matt, tenemental is using a 30 year time frame and explains the scenario where renting is ALWAYS better than buying. The amount of money saved and reinvested at a risk-free rate trumps the costs of buying. The numbers speak for themselves from a purely financial perspective. Which explains the complete fallacy of the NAR mantra "renting is throwing your money away"

want2own, i would definitely advise against buying right now in williamsburg. there was another thread recently about the inventory in 11211, which is going to double in the next year. A stroll in the neighborhood would confirm this expectation. they can't all be converted to rentals for hipsters, so the massive increase in supply would dictate a sharp drop in prices in the near future.

i would question the wisdom of buying in williamsburg period. with that kind of inventory glut, prices won't be rising for a long time. it's no secret that the area is overdeveloped. i personally would feel trapped if i'm going into a deal knowing i won't be able to sell for a profit in 10 years.

The more I think about it and in having read everyone's suggestions I think the best thing to do it to wait and continue to rent for a while more.
I really just want to find a quality apt. to own in Williamsburg since I have been living here for almost 10 years and with the exception of Bedford Ave on the weekends, I love my neighborhood! I'll just keep saving and when the prices do drop, I can hopefully find a larger space than the unit I'm interested in purchasing now..THANKS PEOPLE!

Thanks mimi and rmrmets.

NYCMatt, that was an extremely simple blanket statement you made. You left out the part of my post where I said "there MAY be no length of time where buying beats renting" after suggesting want2own run a mortgage calculator. I was pointing out one of the worst-case scenarios. Obviously, the longer you hold, the more likely you are to come out ahead, but someone buying at the wrong price may indeed be better off renting indefinitely and putting their substantial monthly savings to use elsewhere. New buyers often don't get that they'll be paying close to the full price of their home in interest over the life of the loan, and when the tax abatements expire on many new condos, the monthlies will be massive, regardless of mortgage. Also, you're assuming a full 30-year hold when the average homeowner sells after 7 years. And in the case of this thread, it sounds like the OP was considering a 1br, which he said was small. How long do you think it would have kept him? The comps threads are full of people who were brutalized in part because their time frames were too short.

want2own, when you compare the time you'll be waiting for your new home to the time you'll be living in it and with the financial results, there's really no rush. Good luck.

If it makes you feel better about renting, Want2Own, try phrasing it this way: renting buys me flexibility. I know this can feel like a small comfort, but sometimes perspective is everything.

"You dont ALWAYS win when you own. People who bought in 2007 and divorced and sold in 2009 LOST a lot of money. Get it?."

Mimi, what about "over the LONG term" do YOU not "get"?

NYCMatt: Sometimes people buy for the long term, then have to sell much sooner than they expected. That's a risk a prudent buyer should price in. It may be the biggest risk of all. Your assurance that long-term buyers come out ahead overlooks the messy realities of life. Long-term buyers often become sudden sellers.

Anyway, what's the long term? Seven years? Ten years? Your assertion that buyers always win in the long term requires an elastic - and perhaps unlimited - holding period.

HIstorically, the "long term" has been at least 7 years.

Seven years? OK - let's meet back here in 2014 and see how 2007 condo buyers are doing. I'm not saying they'll still be underwater, but whether they are outperforming comparable renters will probably depend more on the investment choices of the renters than anything the buyers do between now and 2014.

The other problem with your sweeping statement is that it assumes a somewhat rational relationship between rents and sale prices. If the gap between rents and TCO becomes too big, it's impossible for appreciation of the property to keep up. So, while you're right that the person who chooses to buy will own his home after 15 or 30 years (assuming he doesn't fall into the cash-out refi trap), the renter can invest the housing-cost difference in other assets - including investment real estate - and own THEM after 15 or 30 years.

Okay, first of all congrats if you're still able to find a condo for 460. Let's assume you do and are putting up 80%, then your closing costs are about 18k.

Play around yourself: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/

If you get it at 445k, still around 18k

Come on JR. It is a 7 year old thread. Be a little more honorable in promoting Hauseit. Just buy some ads in Streeteasy and pay them some money. Who owns Hauseit anyway? Who is the CEO? The website does not show any ownership or management.