The Top 5 Most Important Things to Know Before Buying an Apartment in NYC

01) Get pre-qualified by a lending institution before you start looking for an apartment.
Knowing how much a bank is willing to lend you will help determine your budget. Too, when it comes time to make an offer on a property, if you plan on financing, the seller usually wants to see a pre-qualification letter submitted with the offer.

02) Know the difference between a condo and co-op.
If you buy a co-op apartment you own shares in a corporation; a condo unit is considered real property.

With a condo you can put as little as a 10% down and finance the rest but with a co-op, purchasers are required to put at least 20% down. Each co-op sets their own down payment requirements and some co-ops require as much as 50% down or don’t even allow financing at all.

Oftentimes co-op boards have stricter financial guidelines than banks so just because you are pre-qualified for a mortgage does not necessarily mean that you will be approved by a co-op board. Co-op boards set their own financial requirements so it will vary from building-to-building.

03) Know the costs associated with buying an apartment.
The majority of buyers find condos more appealing than co-ops but there are higher costs associated with buying a condo.

Condos are usually 9-40% more in price than co-ops and the closing costs for condominiums are higher. Closing costs are approximately 3% of the purchase price but with a condo you pay more because the purchaser must get title insurance, which is usually $3,000 to $4,000, and if you finance there is a mortgage recording tax. NYC mortgage recording tax comes to approximately 2% of the face value of the mortgage.

If you buy a condo in a new development, the closing costs are higher than a condo resale because the buyer pays the NYS transfer tax which is .4% of the sale price, the NYC transfer tax which is 1.425% over $500K (or 1% under $500K) as well as the sponsor’s attorney’s fee which is usually around $2,000 to $2,500.

04) Look at listings and do your own research
It used to be that you had to rely upon a real estate broker to receive apartment listings, as there is no MLS in New York City. But now people can look at apartment listings, comps and sales information by going to It’s the best source for apartment listings in NYC for the general public.

05) Work with an experienced real estate broker and if you’re a buyer, be aware that if you work directly with the seller’s broker you are giving up some of your rights.
If a buyer goes “direct” and works directly with the seller’s broker, a dual agency is created. With a dual agency, the buyer and seller are giving up their right to undivided loyalty.

Buyers and sellers should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.

The goal of dual agency is impartiality, fairness and equal treatment of both parties. The limitations on loyalty (advocacy) for example, result in the following:

  • No advocacy for either client: treat both clients the same;
  • No negotiating for either client; and
  • No advising either on price or terms.

Thus, dual agency necessarily results in a lower level of service, particularly with the duty of confidentiality. Care must be taken to protect confidential information so that neither party is placed at a negotiating disadvantage.

The seller pays the broker’s commission for the sale of a property in NYC regardless of whether the buyer works directly with the seller’s broker, or works with a buyer’s agent.

If you are a buyer, why not work with a buyer’s agent who will represent your best interests?

Looking to purchase an apartment in NYC? Contact Dickse Fitzgerald