Step-by-Step Guide to Buying a Condo in NYC

October 20, 2024 @ArmkeySuccess

Living in New York City is a dream for millions, and with rising rents and limited space, it's no surprise that many are turning to buy their own apartments. Owning a condo in NYC offers the freedom and stability of living in the city without the uncertainty of constant moves. To simplify the condo-buying process, we've put together a step-by-step guide to help prospective buyers navigate their journey. This guide covers every stage, from essential steps and insider tips to financial considerations and the advantages of working with a buyer's agent.

Find Your Dream Home

If you’re planning to finance your purchase, securing a mortgage pre-approval or pre-qualification early on is key to ensuring you stay within a realistic budget.

Identify the specific features you want—whether it's the neighborhood, number of bedrooms, bathrooms, or particular amenities. While it’s hard to find a property that ticks every box, prioritize the most important items on your wish list.

Understand the differences between co-ops, condos, and single-family homes to determine the best fit for your budget and lifestyle. Also, familiarize yourself with market trends in your preferred neighborhoods, including price fluctuations and the level of competition you may face from other buyers.

Prepare an Offer

Start by completing a REBNY financial statement, a common requirement when submitting an offer in NYC.

Use local data on comparable sales in the neighborhood to determine a fair market value for the property. Our expert agents will analyze this data to help you craft a competitive offer.

While data is essential, there’s an art to making an offer. Our local agents will also evaluate the less tangible aspects of the property that data may not capture. It’s equally important to hire a real estate attorney who specializes in NYC transactions to ensure a smooth process.

Additionally, be sure to discuss any contingencies that may affect your offer.

Get an Accepted Offer

Our licensed agents will negotiate on your behalf, using local market data and their expertise to secure a fair price for the property. Some negotiations wrap up quickly, while others take time, as sellers may hold firm in hopes of getting the highest possible offer.

Condo buildings generally offer more amenities and have a simpler approval process compared to co-ops.

While waiting for your offer to be accepted, it’s a good idea to line up two key professionals:

• A local real estate attorney

• A home inspector, if you plan to conduct an inspection.

Once the offer is accepted, a deal sheet is circulated outlining all transaction terms. Remember, time is critical—moving quickly once the offer is accepted is essential, as an accepted offer holds little weight until the deal is officially in contract.

Legal Contract Review and Due Diligence

Once the deal sheet is finalized, it’s sent to both the buyer’s and seller’s attorneys. Your attorney will begin due diligence, investigating the building's financials, condo rules, and any outstanding issues (e.g., open permits, lawsuits). Unlike co-op buyers, who purchase shares in a corporation with strict rules, condo buyers have a more straightforward process.

Your attorney will review and negotiate the contract terms, ensuring it reflects the deal and includes necessary buyer protections. After due diligence, you’ll sign the contract and wire a 10% deposit, which will be held in escrow. Once the seller countersigns, the deal is officially in contract.

Mortgage Process

After the contract is fully executed, you’ll work with your lender to secure a mortgage commitment letter, which confirms the lender’s intent to fund the loan. Be proactive in ensuring all necessary documents are submitted, and schedule an appraisal as soon as possible.

Your attorney may advise not locking in a mortgage rate until your closing date is clearer, as delays can result in additional fees. Once the lender issues a commitment letter, the appraisal will be conducted to ensure the property’s value aligns with the purchase price.

Title Report & Title Insurance

Your attorney will order a title report to ensure the property’s deed is clean and free of any issues. Title insurance protects you against any future disputes over ownership rights.

Condo Board Application (If Applicable)

Even with condos, a board application is often required, though it’s less rigorous than in co-ops. The application typically includes financial statements and letters of recommendation, but condo boards generally have less power and rarely exercise their “right of first refusal.”

Preparing to Close

Once the condo board approves the sale and you receive the lender’s "clear to close," you can schedule a closing date. Be prepared to coordinate with multiple parties, and if you can’t attend in person, consider using a Power of Attorney to handle the transaction.

If you haven’t already, secure homeowner’s insurance for the property, especially if you’re financing the purchase, as it’s often required by lenders.

The Actual Closing and Closing Costs

Before closing, conduct a final walkthrough of the property to ensure everything is in order. In the days leading up to the closing, pay attention to the closing disclosure and check instructions. If financing, the bank will handle most of the funds, and you’ll be responsible for the rest.

Certified checks or wire transfers are required for closing costs, and your attorney can assist with this process.

Closings can take a few hours, so come prepared. After signing the necessary documents, you’ll receive your keys—congratulations, you’ve just bought a new home!