What To Expect: Buyers Guide
Congratulations on your decision to own a piece of the greatest, most exciting cities in the world. Just like the city itself, the real estate market moves at a very fast pace and it is crucial to be prepared and well educated in the subject so that you’ll end up with a home or an investment property that will best serve your needs.
HOW CAN I PREPARE MYSELF FOR THE BUYING PROCESS?
- Determine your financial state and credit score before your search; know what you can spend on a down payment as well as monthly expenditures like maintenance or common charges, real estate taxes, monthly mortgage, utilities etc.
- Define your search parameters: Price range, preferred locations, size of property, type of ownership (co-op, condo, single or multi family house).
- Prioritize your needs and “must have” in example: essential building amenities (doorman, elevator, gym, pet friendly, etc.), apartment essentials: views, light, layout, washer dryer, closet space, etc.
- Get a mortgage pre-approval before your search, shop for the program and rates that works best for you.
- Find a professional real estate attorney that specializes in NYC
- Find a professional real estate broker/agent who specializes in NYC
- Identify your timeline for moving, know that it may take up to 4 months to close after the contract is signed.
WHAT IS THE DIFFERENCE BETWEEN A CONDO AND CO-OP?
Co-ops apartments (Cooperative) differ from Condos (condominiums) in several ways. When you buy a coop, you are buying shares that entitle you as a shareholder to a "proprietary lease" in a particular apartment. Coop owners pay monthly maintenance to the building corporation for maintaining and operating the building, property taxes and the underlying mortgage on the building (if any). Approval is granted by a board of directors, and all prospective buyers must submit a "board package". The board will also require an interview.
When you buy a condo, you buy an individual parcel of real property and get a deed. The condo building is divided into individual condos and a common area. A condo owner owns its apartment and an undivided interest in the common area and is responsible to pay its own real estate taxes and its share of the common charges for the expenses to maintain and operate the common areas. Unlike a coop building, there is no underlying mortgage on a condo building. Prospective buyers will also need to submit a similar “board package” like in a coops but there is no interview and you don’t have to disclose everything unlike in a coop. Another difference is that condos cannot reject potential buyers, although they do have the right of first refusal, which means they can pre-empt the sale by offering to buy the apartment on the same terms.
There is a greater inventory of co-ops than condos in NYC, about 75 percent co-op versus 25 percent condo. Co-ops have stricter rules than condos such as restrictions on subletting, pets restrictions, no pied-à-terre etc. When buying the approval process in a coop will be longer than a condo, 90- 120 days in a coop and 30-60 days in a condo. Co-ops also require buyers to come up with a down payment of at least 20 percent of the purchase price, and sometimes 25 to 50 percent were in a condo the minimum down payment is 10%. Because of all the differences condos are priced and sell in a higher price then the comparable sized apartments in coops.
ESTIMATED CLOSING COSTS FOR COOPS
ESTIMATED CLOSING COSTS FOR CONDOS
ADDITIONAL COSTS FOR NEW DEVELOPMENTS AND SPONSOR UNITS
####### * Transfer taxes are calculated and added to purchase price (for tax purposes) and then recalculated based on the bulked up price.