Get your finances ready
Before you tour, know what you can spend. If you're financing, talk to a lender and get pre-approved. Sellers, and co-op boards in particular, will want proof of your income, assets and how much cash you'll have left after closing. Leave room in the budget for closing costs and taxes, covered below.
Co-op or condo
Co-op
You buy shares in the corporation that owns the building and get a proprietary lease for your apartment. Expect a detailed board application and interview. Boards often set their own rules on financing, sublets and finances after closing, and can generally decline a buyer without saying why (though never for a discriminatory reason). You pay monthly maintenance, which usually covers the building's property taxes and its own debt.
Condo
You own the apartment itself as real property, with a deed and your own property tax bill, plus monthly common charges. Approval is usually lighter (often a right of first refusal), and condos are typically more flexible about financing and renting out.
Co-op share loans aren't recorded mortgages, so the mortgage recording tax doesn't apply to them. Condo and house mortgages pay it (see costs). Buying in a new development or conversion? That sale is governed by an offering plan filed with the New York Attorney General. Read it with your attorney before you sign.
Agree on representation
New York requires agents to give you a state agency disclosure form at first substantive contact, explaining whom the agent represents. Before we tour, we'll also sign a written buyer agreement that spells out how I'm paid. Often the seller ends up covering it. If not, you'll know the amount up front.
Search and tour
We narrow down neighborhoods, building type and must-haves, then tour. With my construction background, I'll point out what deserves a closer look: plumbing risers, windows, wiring, heat and signs of water damage. I'll also put rough repair costs on them so you can factor them into your price.
Make an offer
In New York City an accepted offer usually isn't binding until both sides sign a contract. Until then, either side can still walk away. Your offer typically covers price, financing, timing and any conditions, and your attorney negotiates the contract from there.
Attorney review, due diligence and contract
Each side hires its own real estate attorney. Yours reviews the building's finances, minutes and offering plan or bylaws, and checks for liens. They then negotiate the contract. When you sign, you put down a deposit, usually held in escrow by the seller's attorney. The amount and its terms are set by the contract.
Financing and building approval
Your lender appraises the apartment and underwrites the loan. Co-op buyers put together a board package (financial statements, references and letters) and usually sit for an interview. Condo buyers usually submit a lighter application so the building can waive its right of first refusal.
Closing
You do a final walk-through, then sign at the closing table with the attorneys, lender and title or managing agent. Funds move, taxes are paid, and you get the keys.
What you'll pay in taxes and fees
These are the main transfer and mortgage taxes on a typical Manhattan residential sale (one- to three-family homes, condo units and co-op apartments), as published by New York State and New York City. Your contract can shift who pays some of them, especially in new developments. Your attorney will confirm the exact figures.
Typical buyer closing costs: co-ops about 1%–3% of the price; resale condos about 2%–5%; new-development condos often 5%–6% or more. These are typical buyer-side estimates and vary by price, loan and building. Co-ops usually cost less to close because co-op buyers don't pay the mortgage recording tax or title insurance. Expect the higher end if you finance a condo (mortgage recording tax) or buy at $1 million or more (the mansion tax below), and the lower end if you pay cash. In new developments, the sponsor's contract often shifts the seller's transfer taxes to the buyer.
| Tax | Applies when | Rate | Normally paid by |
|---|---|---|---|
| NYS "mansion tax" | Residential price of $1 million or more | 1% of the price | Buyer |
| NYS supplemental tax (NYC only) | Residential price of $2 million or more | From 0.25% (at $2M) up to 2.9% (at $25M+), on a graduated scale | Buyer |
| NYC mortgage recording tax | Condo or house mortgage (not co-op share loans) | 2.05% of the loan under $500,000; 2.175% at $500,000 or more (the lender typically pays 0.25%, so the borrower's share is 1.8% or 1.925%) | Buyer (borrower) |
| NYS real estate transfer tax | Every sale | 0.4% of the price; plus 0.25% more on NYC residential sales of $3 million or more | Seller |
| NYC real property transfer tax | Every residential sale | 1% at $500,000 or less; 1.425% above $500,000 | Seller |
Other buyer costs depend on the deal: your attorney's fee, lender and appraisal fees, title insurance for condos and houses, co-op lien search and application fees, and prorated maintenance, common charges or taxes. Some co-ops charge a flip tax when a unit sells, usually paid by the seller. Ask for a written cost estimate early.