Question 1

Condo vs. Co-op

Accepted Answer

While co-op apartments are not unique to NYC, no other city has them make up such a large portion of the housing market. In a co-op, you do not technically own real estate — instead, you own shares in the corporation that owns the building along with a lease for your apartment.

So what does this mean? While you still “own” an apartment, there are additional rules and restrictions. Because buyers are purchasing shares in a corporation rather than real property, co-op boards can approve or reject prospective buyers. This is why co-op purchases require detailed board packages, financial disclosures, and often interviews.

Co-op boards can also limit certain ownership rights. Many restrict subletting, require primary residency, or create rules around renovations and use of the apartment.

Other differences exist as well. Co-op owners pay one monthly maintenance fee, which includes building expenses and property taxes. Financing is also structured differently, allowing co-op buyers to avoid the mortgage recording tax that applies to condos.

Co-ops are generally more abundant and more affordable than condos in NYC, while condos tend to offer greater flexibility and fewer restrictions. In Manhattan especially, condos often trade at a significant premium to comparable co-ops.
With co-ops generally more affordable, why pay more for a condo? Some buyers may not qualify for co-op financial requirements, while others may prefer the flexibility, easier approval process, and rental freedom condos provide. The right fit ultimately depends on a buyer’s finances, lifestyle, and long-term goals.

Question 2

Thinking of a Multifamily Home?

Accepted Answer

A multifamily home can be a strong financial opportunity for several reasons:

More House for Less Money Each Month
Rental income from additional units can help offset monthly carrying costs, allowing buyers to afford more space for a lower out-of-pocket monthly expense.

Higher Value = More Appreciation
Higher-value properties generally have greater appreciation potential in absolute dollar terms, especially over the long term.

Long-Term Investment Potential
Unlike many condos, multifamily homes can generate stronger long-term rental income and cash flow while also offering future appreciation potential.

“Out of Pocket” and the 5 Major Carrying Costs
Buyers should determine their ideal monthly out-of-pocket cost and account for the five major expenses: property taxes, mortgage payments, homeowners insurance, water/sewer, and heating costs.

“Rentability”
It’s important to consider the size and layout of the rental units, as demand for certain apartment types can vary significantly by neighborhood.

Certificate of Occupancy
In NYC, a property’s Certificate of Occupancy (CO) determines how it can legally be used, financed, insured, and taxed. Violations or non-compliance can create financing and legal issues.

Inspection
Unlike a condo or co-op, homeowners are responsible for maintaining all systems and structures. A thorough inspection is essential to identify repairs, maintenance needs, and the overall condition of the property.

Question 3

What does it cost to buy a home in NYC?

Accepted Answer

As a first time buyer in NYC, it is important to know the real price tag on your purchase and create a realistic budget that will help narrow your search to properties you can afford and ensure you are able to make a competitive offer when you find "the one."

1. Downpayment

Most coops will require that buyers put down at least 20% of the purchase price as a downpayment (some may have higher requirements of 25%, 40%, or 50%). Condos have a lower threshold -- usually 10% -- but financing more than 80% will involve a surplus on the monthly mortgage payments so will amount to a costlier purchase.

2. Closing Costs

Closing costs vary based on whether you are buying a coop or a condo, and whether the purchase exceeds $1 million. Your attorney or real estate agent can provide you with detailed information on closing costs for your specific purchase, however, the most basic takeaway is that closing costs for coops up to $1 million is around $8000-$8500 regardless of their cost or amount financed. Condo closing costs are significantly higher, especially if you are financing (about 2% of the financed amount is due as a mortgage tax). Purchases over $1 million in both coops and condos are subject to a 1% mansion tax.

3. Reserves

Most coop boards will require buyers have some liquid funds remaining after closing, with the amount varying from 6 months to 2 years. This means that coop buyers must show that after deducting downpayment and closing costs, they have 6- to 24-months’ worth of their mortgage and maintenance remaining in their bank accounts.

4. Monthly Carrying Costs

In addition to your monthly mortgage, you will be paying maintenance for a coop (includes your share of real estate taxes and common charges) or separately common charges and real estate taxes for a condo. In Manhattan, $2/square foot is considered a reasonable monthly total for these fees, in Brooklyn, monthlies tend to be lower. While these costs can fluctuate based on amenities, some smaller buildings have surprisingly high monthly charges since basic costs are shared by a smaller number of residents.

Question 4

What to consider for your Home Wishlist?

Accepted Answer

Budget
Budget is not just another wishlist item — it impacts the feasibility of every other priority. Purchase price is only part of the equation and should be weighed alongside monthly costs, renovation expenses, liquidity, and overall comfort level with the investment.

Location versus Size
With a defined budget, buyers often face tradeoffs between location and size. In some neighborhoods, a smaller apartment may cost the same as a significantly larger home elsewhere.

Commute
Commute can have a major impact on day-to-day quality of life and is often a deciding factor when narrowing down neighborhoods.

Amenities
Amenities are important, but certain building styles come with tradeoffs. For example, buyers drawn to Brooklyn brownstones may need to forgo features like elevators or doormen.

Renovations
Some buyers are excited by renovation opportunities while others prefer move-in ready homes. It’s important to understand both your appetite for renovations and the realistic costs involved.
While these may seem like obvious considerations, many buyers do not fully evaluate them until they are deep into the search process. Priorities often evolve over time, making open communication and flexibility essential throughout the search.

Question 5

What professionals will I need to buy a home?

Accepted Answer

No man is an island, and no real estate agent can single-handedly get you to the closing table.  What we can do, however, is  assemble and coordinate the "dream team" of professionals you will need.

1. Real Estate Attorney: A great real estate attorney is crucial, especially in this market.  As I've discussed before, in New York, an accepted offer is nothing more than a starting pistol to begin due diligence and contract negotiations.

2. Mortgage Banker: Not all mortgage bankers are created equal.  Even within the same bank, different bankers have vastly different abilities.  Some are better at moving along the process and getting exceptions granted.

3. Inspector: Depending on what type of property you are buying, it may make sense to bring in an inspector prior to signing the contract. The inspector can make sure there are no major defects with the apartment or building, and can also help you understand smaller repairs that you may consider bringing up during negotiations or that you would want to fix yourself upon closing.

4. Property & Casualty Insurer: Your lender and the building will likely require you to have insurance prior to closing.  A capable insurance broker will guide you toward obtaining the protection you need.

5. Title Insurer: You will probably never meet your title insurer, but your attorney or the lender will retain them anytime you are buying real property (so condos and houses, but not coops).

6. Architects and General Contractors: Unless you are buying a turnkey, perfect home, you may be considering doing some work, whether it's painting or refinishing floors or a total gut. In some cases, you may want to get an estimate prior to signing the contract to allocate your resources appropriately.  This may require bringing in an architect, general contractor, or both.

Once you've closed, the list of services/professionals you need may increase: Movers, floor refinishers, cleaning services, interior designers, painters, you name it.  It really does take a village, and you can think of your real estate agent as the mayor or chamber of commerce who can refer you to the best fit.

Question 6

What are my estimated closing costs?

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NYC Buying Process

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Co-op Versus Condo

In NYC, there are two types of apartments - coops and condos. Understanding the differences early in your search is important, as they can affect everything from your budget and financing to your ability to rent, or sell in the future.

NYC Co-op Guide

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Frequently Asked Questions

Condo vs. Co-op

Thinking of a Multifamily Home?

What does it cost to buy a home in NYC?

What to consider for your Home Wishlist?

What professionals will I need to buy a home?

What are my estimated closing costs?

Searching for Your Home

The Basics of Making an Offer

What to consider when buying into an apartment building?

Do I have to be all cash to be competitive?

What Should I Expect from the Board Interview?

What does it mean to have an accepted offer?

Everything you need to know about mortgages

What are the pros and cons of New Development?

Buying Process

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