11 Steps to Buying An NYC Apartment – The Ultimate Guide

Buying an NYC apartment can be overwhelming – that’s why we’ve put together this page, which contains a wealth of information, tips, and tools to help you make informed decisions and find the perfect property in the city. From understanding the buying process and securing financing to finding the right neighborhood and negotiating the best price, we’ve got you covered.

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Step 1: Find a Broker You Can Trust

Finding an agent whose personal and professional values align with yours is the real secret to success.

If you’re a first-time home buyer in New York City, your most important partner in this process will be your real estate agent. Finding a smart, tenacious agent is important, but finding one whose personal and professional values align with yours is the real secret to success.

When meeting a prospective agent, ask lots of questions! You’ll be working with them for at least 90 days, so it’s worth investing some time in the relationship upfront.

Step 2: Determine Budget / Build Your Team

Determining a Budget for an NYC Apartment

Determining your budget is essential to the buying process – whether you’re financing the purchase or not. This is especially true in New York City where post-purchase liquidity and DTI (debt-to-income) ratios have a stronger weight than in the rest of the country. While you might be able to put less than 20% elsewhere, in NYC it’s unrealistic.

Even if you’re paying cash, it’s important to work with a seasoned professional – since many of the higher-end co-ops have separate income requirements that only brokers are familiar with, it can really pay off to work closely with an experienced agent that you trust.

Financing A NYC Apartment Purchase

Once you’ve settled on your budget, and if you want to pay for your purchase with a mortgage, it’s time to find a lender – and you don’t want just anyone you find online.

You’ll want to work with someone who is intimately familiar with the nuances of purchasing in NYC since the financial requirements can be so much stricter compared to the rest of the country. Your broker can usually provide great referrals, but we’d be happy to send you ours as well after a budget discussion – just reach out!

One other note – if your credit score is below 680, it can be very difficult to get a loan, regardless of your other assets.

A Great Real Estate Attorney Is Essential

Now you have a budget and (if financing) a lender, the next person to contact is an attorney. New York City transactions are immensely complicated, and working with a qualified NYC-specific real estate attorney is one of the most important aspects of a smooth deal. We can’t underscore this enough – they need to be strictly real estate attorneys, not someone who does it every once in a while.

This is not an area to have a family member or friend who practices other types of law step in to save a little bit of money – you want the best of the best. Again, your agent should be able to provide great referrals, and we are always happy to share ours as well if we work together.

Step 3: Decide Between Co-op / Condo

Apartments in most prewar buildings will be long-established co-ops, while those in many postwar buildings and new construction will be condos.

NYC Co-ops: What You Need To Know

For decades the cooperative housing model dominated the city’s real estate industry. Even today, they make up about 70 percent of Manhattan’s inventory. And for all intents and purposes in NYC, co-ops are ‘regular’ real estate…but there are some differences you need to know about.

Co-op apartments are owned by a corporation that owns the building the apartment is in. When you buy a co-op apartment, you’re actually buying shares in that corporation. Those shares give you a proprietary lease to a particular apartment. In other words, you don’t own the apartment, you own shares and lease the apartment from the corporation.

But this isn’t like a regular lease with a landlord – while the building definitely has some oversight into what you do to your apartment, you are free to paint, wallpaper, etc. as you see fit. The co-op’s board will need to give approval for larger renovations, like ripping out and replacing flooring or renovating a bathroom, but smaller items are left up to you.

You’ll be required to have at least 20 percent of the purchase price to serve as a down payment (though it is very often much more than that). Shareholders pay a monthly maintenance fee to cover building expenses, including real estate taxes. Approval is granted by a board of directors, and all prospective buyers must submit a detailed board package that includes financial and personal information, including references, tax returns, and bank statements. The board requires an interview and dictates policies on pets, renovations, who you can sell to, and if/when you can sublet.

Overall, co-ops are great if you are looking for your primary residence and/or love pre-war features. There are many nuances (too many to mention here!) so if you have more questions about co-ops, consider reading our article, or just reach out. We’d be happy to help!

NYC Condos: What You Need To Know

In contrast to purchasing co-ops, condos are real property and you will be given a deed just like in the rest of the country. Besides owning the apartment, you also own a small percentage of the building’s common elements, such as the halls, lobby, gym, etc. Each individual apartment also gets a separate tax bill from the city, and there are monthly common charges for the building’s expenses.

Financing and subletting terms can be more flexible in a condo than in a co-op – meaning if you want to purchase in the name of an LLC or as a pied-a-terre, you can. There is still an approval process to purchase a condo and you’ll still need to submit a thorough package, but it doesn’t require an interview.

Condos are great if you are looking for a secondary residence or pied-a-terre, want to purchase in the name of a trust/LLC/etc., or if you love modern post-war features and architecture. Again, there are many nuances between condos and co-ops to consider, and we’d be happy to walk you through them – just give us a call.

What About New Developments?

If you’re seeking a glassy, modern apartment with the latest bells and whistles, you may find new construction the most appealing. Nearly all new construction buildings are condos, and while the purchasing process is similar to a resale condo, there are some differences.

The closing process for a new development condo can be longer and more complex than a resale condo. Construction progress, obtaining necessary permits and certificates of occupancy, reaching the required sales threshold, and finalizing the building’s amenities can all impact when you’ll be able to close and move into your new home.

It’s not uncommon for the closing period in a new development condo to take several months to a year or more, depending on the stage of construction and the developer’s timeline. Below are some general guidelines:

a. Pre-construction Phase: In this phase, you typically sign a contract to secure the unit before construction begins. The timeline from contract signing to closing can be quite lengthy, often ranging from a few months to a couple of years, depending on the project’s scope and progress.

b. Construction Phase: Once the construction begins, the timeline for closing is contingent upon the completion of the building and obtaining the necessary approvals. Delays in construction or unforeseen circumstances can potentially extend the closing timeline.

c. Building Completion and Occupancy: After the construction is completed, the building needs to receive a certificate of occupancy (CO). The CO confirms that the building meets all the required codes and regulations for occupancy. The closing typically takes place after the CO is obtained.

Keep in mind that these timelines are just rough estimates, and they can differ based on factors like the project, developer, market conditions, and other variables.

Other Considerations

Outside of co-ops and condos, there are many sub-types of apartments: maisonettes, land leases, garden apartments, floor-through apartments, etc. The following podcast episodes and links to articles are certainly not exhaustive, but it’s a great starting point to become familiar with the different kinds of apartments available.

Step 4: Determine Your Wants / Needs

The ‘perfect’ apartment probably doesn’t exist – no matter your list of wants/needs. That’s why it’s a good idea to take some time to gain clarity about what you really need, and what would just be nice to have.

There are three main categories most New Yorkers consider:

• Space and layout (How many bedrooms and bathrooms? Home office? Outdoor space?)
• Amenities and Features (Doorman? Fitness Center? In-Unit Laundry? Elevator? Central Heat/AC?)
• Transportation (How far to the nearest station? Can you walk to your daily needs, or do you need another form of transportation?)

Two of the biggest pain points we hear are around laundry and HVAC. As usual, there are too many nuances to cover in an overview article like this, but we have dedicated episodes for each, linked below!

Step 5: Settle on Location

Buying a home in New York City means buying into a borough, a neighborhood, a block, a street, and a building.

1. Consider your personal vibe

Finding your dream apartment is only half the battle; stroll the streets of its neighborhood at different times of day to get a sense of the energy of the place. A neighborhood that’s library quiet during a Sunday morning open house may be
markedly less so on Monday morning—or Friday night. And keep in mind that a neighborhood’s nightlife is a concern both for people who want to dance till dawn and for people who want to get a good night’s sleep.

2. Consider your commute

How will you get around? Where’s the nearest subway station and what trains stop there? Try simulating your commute on a weekday morning. Yes, that’s a task, but one that’s worth the effort. A recent study found that New York City residents have the longest average commute in the nation – more than six hours each week – so getting a clear picture of your commute commitment can sour (or sweeten) your neighborhood crush.

3. Consider your family’s educational needs

Determine how many schools are in the neighborhood and how they’re doing. The nonprofit GreatSchools.org maintains a searchable database of public and private school information, including rankings based on test scores, student progress, and equity (which amounts to a school’s ability to serve students of varying ethnic and socioeconomic backgrounds).

4. Consider your leisure expectations

Is there a public park around the corner? How about a playground or a dog run? Libraries, theaters, sporting facilities, and dining options matter – coffee shops and bookstores, too. And while it’s true that New York City’s greatest cultural institutions are rarely more than a subway ride away, having one in walking distance can be life-changing. Now’s the time to explore.

5. Consider the green

Even in the most urban of urban neighborhoods, trees matter. And the New York City Department of Parks & Recreation maintains a sprawling interactive website where it documents the location, species, and trunk diameter of 680,000 street-side tres (park trees are excluded) across all five boroughs – so it’s easy to get a map-level sense of a neighborhood’s green potential.

In the episodes below, we’ve put together overviews of many of NYC’s neighborhoods. As always, if you aren’t sure what neighborhoods would best fit your lifestyle, just reach out. We can definitely point you in the right direction.

Step 6: Go See Properties

Finally the fun part! Now that you’ve determined your broker, team, budget, property type, wants and needs, and location, it’s time to go see properties!

One thing we always tell buyers is this: everyone has a certain number of properties that they need to see before they will be emotionally ready to put in an offer. Some people might be okay with moving forward after only seeing one apartment, while others need to see quite a few more.

Throughout the search process, your agent will help you tweak your criteria based on your feedback on properties that you’ve seen. It’s okay if these change over time – sometimes you won’t know what is really a want or a need until you’ve seen several apartments.

Step 7: Make An Offer

With your property of choice finally found, it’s time to make an offer. Your real estate broker will help you evaluate the market by reviewing recent sales data and comparable listings, work with you to put together attractive terms, and then put it all in writing.

Any strong offer will include the following:

• Proposed purchase price
• Any contingencies
• Desired closing date
• An earnest money deposit (usually around 10%)

It’s normal to have a bit of negotiation between your broker and the seller’s broker – if the sellers provide a counteroffer, consult with your broker to figure out your next steps.

Step 8: Accepted Offer

Once your offer is accepted, both your real estate attorney and the seller’s real estate attorney will review the document. There are usually about 5-10 days where you will have an accepted offer, but not a signed contract.

An offer just outlines the purchase price and terms, forming the basis for negotiations. A signed contract on the other hand includes all the terms and conditions of the sale including purchase price, contingencies, closing date, and other relevant details.

Once the attorneys have negotiated any remaining terms, your transaction will move from an accepted offer (not legally binding) to a signed contract (legally binding). Only a few more steps until closing!

Step 9: Board Application, Interview, and Approval

Board interviews can happen in-person or virtually and are all about presentation – the co-op board just wants to make sure that you’ll fit in with the existing tenant shareholders, that they won’t face any additional risk by allowing you to purchase in the building, etc.

Co-op boards do have the right to reject your application, therefore blocking your ability to purchase the apartment you have in mind, but it is rare. You can mitigate your risk of rejection by working with an experienced broker, having all your financial ducks in a row, and only answering questions that the board asks – don’t volunteer information that you don’t need to.

Now that you have approval from either the condo or the co-op board, it’s time to coordinate your closing! Usually, closing happens within two weeks after board approval, so be prepared to make room in your schedule.

Step 10: Final Walkthrough

Typically right before attending the closing, you and your broker will visit the apartment for a final walkthrough to make sure that everything is as it should be.

Things to look for depend on the apartment and the terms of your contract, but in general, you’re making sure that appliances that should be there are still there and there aren’t any huge damages.

If there’s an issue at the final walkthrough, the brokers and attorneys get back together to figure out what happens, but it’s rare – the seller has every incentive to make sure that the apartment is ready for closing.

Step 11: Closing

Closing costs are way too big of a topic for an overview article like this, but in case you’d like to learn more, we’ve written two incredibly in-depth articles – one for co-ops and one for condos.

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Once the closing is complete, you’ll be given the keys to your new apartment, and you are done! Take time to enjoy your new space and make it yours – congratulations!

As we’ve mentioned before, the Gasdaska Conlon Team is always here if you need advice, have questions about a specific part of the process, or are ready to start the search for your next home. Just reach out via email or by giving us a call – we look forward to meeting you.