Buying a House in New York

What are the key factors to consider when buying a house in New York?

First, realize that New York is located in what we insurance geeks call a “Hard Market.” This means rates are ever increasing, insurance company underwriting guidelines are very strict with no room for negotiation, and viable markets are simply shutting down, quoting new business or non-renewing existing policies. The bottom line is that you have fewer options as you search for insurance coverage. Here are some key factors to consider.

– Homes located near the water — more than one mile from the shoreline/lakes/rivers — is a good start that will offer you more coverage options.
– Homes less than one mile from the water will guarantee you higher premiums, and your choice of carriers and coverage options will be limited or excluded.
– Be sure to order an engineer report before going to contract to be sure the roof, wiring and plumbing are up to code and in good working order. Once your insurance company does its physical inspection, it will require all this and more. In addition, carriers will offer you limited time to repair or replace before they send a cancellation notice.
– Hiring contractors to repair, replace or remodel can take three to six months to secure. If you are not planning to move right in after closing, this could present an issue with your insurance carrier. Most homeowners’ insurance policies require that you move in after closing so that the house is occupied. Homes that are left vacant or unoccupied create greater risk, and in this “hard market,” there can be no negotiation on this. So, be honest with your agent about how you plan to use your new home so they can find you a carrier that will fit your immediate needs.
– Be open to going with higher standards and windstorm deductibles and installing burglar/central station alarms, generators and sump pumps for additional credits to your premium.
– Pay in full — this discount is well worth it if you do nothing else.
– Bundle your auto and umbrella insurance for additional discounts.

What are some common mistakes that home buyers make when trying to purchase a property in New York, and how can they avoid these pitfalls?

These are some common mistakes I see homebuyers make when purchasing property in New York:

– Be aware that closing dates change regularly. Therefore, only bind coverage (no matter what the mortgage broker tells you) once you have a confirmed closing date. A knowledgeable insurance agent will be very aware of this. Effective dates on new policies cannot be changed, so you could be paying for insurance on a house you do not own for more than 30 days.
– Unless the home is in pristine condition, please do not assume you can do minor cosmetic repairs yourself and move in within the first 30 days. Minor updates can quickly turn into costly, long renovations.
– Don’t fall in love with a house until you find out if it is insurable and you are comfortable with the cost and coverages needed to insure it.

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