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Buying a home is a major decision and an exciting experience. Once you know owning a home is the right move for you, the first step is to seek professional assistance to navigate you through the unique New York City market.

When you choose Town to represent you, you are assured the utmost in market expertise, service excellence and industry resources to make the buying process smooth and seamless. This informative guide will help educate you on what is involved in purchasing a home, and will empower you with the knowledge you will need to make a confident decision.

At Town, we are committed to guiding you through your search and transaction to make purchasing your New York City home rewarding and stress-free.

The Different Forms of Property Ownership

Before you start looking, it is important to understand the different types of ownership available to purchasers of Manhattan property.

Cooperative
In Manhattan, cooperatives have been the traditional way to own an upscale apartment for nearly a century, and comprise two thirds of all apartments available for purchase. Co-ops are owned by an apartment corporation. When you purchase an apartment in a co-op building, you are buying shares of the corporation that entitle you as a shareholder to a "proprietary lease." Typically the larger your apartment, the more shares of the corporation you own.
  • Co-op shareholders also pay a monthly maintenance fee to cover building expenses like heat, hot water, insurance, staff salaries, real estate taxes and the mortgage debt of the building. Portions of the fee are tax deductible; and shareholders can deduct their portion of the building's real estate taxes.
  • Approval to purchase shares of a co-op must be granted by a board of directors, who also have the authority to determine how much of the purchase price may be financed and minimum cash requirements. All prospective purchasers must submit a "board package" containing a purchase application, personal and professional letters of recommendation plus detailed information on income and assets. The board will also require an interview so they can meet you and ask any questions regarding the information you provided. They can approve or deny any applicant as they choose.
Purchasing a co-op can be intricate, and subletting can be difficult. Each co-op has its own rules and should be considered carefully. The specialists at Town are experts in this area and well equipped to help you decide whether a co-op, and which one, is best for you.

Condominium
Unlike a co-op, a condominium apartment is real property, and a purchaser is given a deed as if they were buying a house. The difference between owning a condo and a house is that in addition to owning the apartment, you also own a small percentage of the common elements of the building like the halls, stairwells, basement, etc.
  • Each individual apartment in a condominium receives a separate tax bill from the city. There is still a monthly common charge similar to the maintenance charges in a co-op, which is paid to the condominium association to pay for such items as payroll, building maintenance and supplies, management fees, and building repairs. These charges do not include your real estate taxes and are not tax-deductible. They also tend to be lower than in co-ops because there is no underlying mortgage for a condominium building.
The straightforward nature of buying a condo plus the fact that in some cases you can finance up to 90% of the purchase price and sublet your apartment at will makes this form of ownership a top choice for flexibility, especially among investors, foreign buyers and parents purchasing for their children.

Cond-Op
A cond-op is a residential cooperative where the ground floor (typically commercial units) is converted into a separate condominium that's either owned by an outside investor or the original building sponsor. So while the residential units are a co-op, the commercial units are owned as a condominium by an entity other than the co-op. The co-op does not receive the benefit of the income from these units. People often refer to cooperatives that operate under condominium rules as cond-ops, though this is inaccurate.

Townhouse
Owning a townhouse provides the owner with a "fee simple" ownership of real property. There are single-family and multi-family townhouses which can be lived in or rented out at will. In either case, the owner is responsible for payment of all real estate taxes, maintenance and repairs of the property. The sale of the property may be conveyed to any party without prior approval by anyone other than the homeowner.

Get Prepared with Your Financing

Learning about financing options and what you can afford before you start looking for a home will save time and streamline the buying process. Your Town representative will arrange a meeting with a mortgage broker who will answer your questions about the loan process and determine a comfortable price range. During this early phase of the loan process there are two levels of endorsement:

Pre-Qualified: Based on the information you provide during your initial conversation with a mortgage broker, you are potentially qualified for a stated loan amount, assuming full and accurate disclosure.

Pre-Approved: You will next provide your mortgage broker with information for a detailed background and financial check (including tax returns, credit check & income history). You'll then get a letter from the lender stating the amount the lending institution would loan you. This commitment is valid for about 60 days. As a note, most sellers require buyers to provide a pre-approval letter with an offer letter.

Timeline for Buying a Home

Now that you're ready to start your search, here is a general timeline of events. Obviously the first step is to preview properties and schedule appointments with a Town agent. Once you decide to make an offer on a home, in most cases it can take an average of 60 - 120 days to complete the closing process.
  • Prepare the Offer: 1 day
  • Negotiate the Offer & Acceptance: 2-5 days
  • Loan Application & Appraisal, Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit: 2-4 weeks
  • Co-op Board Package & Interview/Condo Application: 4-6 weeks
  • Bank & Attorney Prep Closing: 1-2 weeks
  • Final Walk Through: day of closing
  • Transaction Closing: 3 hours
Closing Costs

Condominiums and Townhouses
For the Seller

Application/Waiver Fee $500 - $1,000
Pick-Up Fee for Mortgage Pay-Off $175 - $250
Real Estate Tax and Common Charge Adjustment Not really a "closing cost". Seller reimburses Purchaser for the portion of maintenance and/or Real Estate Taxes that the Seller failed to pay prior to Closing
General
Brokerage Commission 6% of Sales Price
Seller's Attorney's Fee Consult your attorney
Move-Out Deposit - refundable $500- $1,000
Move-Out Fee - non-refundable $250- $1,000
NYC Real Property Transfer Tax 1% of Sales Price - $500,000 or less
1.425% of Sales Price - greater than $500,000
Commercial/Bulk Sales Rate If 2 or more un-attached units are sold simultaneously to the same buyer, the commercial transfer tax rate applies - 1.425% of the Sales Price if $500,000 or less or 2.625% of Sales Price if greater than $500,000
NYS Transfer Tax 0.4% of Sales Price
NYS Estimated Capital Gains Tax 8.97% of estimated gain - paid at closing unless (i) Seller is a NY State resident at time of sale, or (ii) property was Seller's primary residence for 2 out of the last 5 years, or (iii) Seller has set up a 1031 Tax-Deferred Exchange (investment property only)
Transfer Tax Filing Fee $75
Federal Withholding Tax (FIRPTA) 10% of Sale Price if Seller is a non-resident foreigner
For the Purchaser

Title Insurance - Owner's Policy Approximately $4 per $1,000 of insurance (fee regulated by statute) plus various search and recording fees totaling an additional $1,000
Title Insurance - Mortgage Only applies if the Purchaser is obtaining financing - variable depending on loan amount
Real Estate Tax and Common Charge Adjustment Not really a "closing cost". Purchaser reimburses Seller for the portion of common charges and/or Real Estate Taxes that the Seller has pre-paid
New York State Mortgage Recording Tax 1.80% if mortgage amount is less than $500,000
1.925% if mortgage amount is greater than $500,000
Title Closer Gratuity $250
Bank Fees (only applicable if Purchaser is obtaining a loan)
Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application fee Variable depending on lender and loan product
Bank Attorney fee $700- $950
General
Move-In Deposit - refundable $500- $1,000
Move-In Fee - non-refundable $250- $1,000
Purchase Application Fee $500- $1,000
Mansion Tax 1% of Purchase Price if $1,000,000 or more
Purchaser's Attorney Fee Consult your attorney
New Construction
Sponsor Attorney's Fee Consult your attorney
Sponsor's NYC and NYS Transfer Taxes Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax)
Working Capital Fund Contribution 1 - 2 months of Common Charges


Cooperatives
For the Seller

Flip Tax Variable depending on the building (if applicable)
Stock Transfer Tax $0.05 per share
Transfer Agent Fee (Coop Attorney's Fee) $500 - $750
Maintenance Adjustment Not really a "closing cost". Seller reimburses Purchaser for the portion of maintenance that the Seller failed to pay prior to Closing
Brokerage Commission 6% of Sales Price
Seller's Attorney's Fee Consult your attorney
Move-Out Deposit - refundable $500- $1,000
Move-Out Fee - non-refundable $250- $1,000
NYC Real Property Transfer Tax 1% of Sales Price - $500,000 or less
1.425% of Sales Price - greater than $500,000
Commercial/Bulk Sales Rate If 2 or more un-attached units are sold simultaneously to the same buyer, the commercial transfer tax rate applies - 1.425% of the Sales Price if $500,000 or less or 2.625% of Sales Price if greater than $500,000
NYS Transfer Tax 0.4% of Sales Price
NYS Estimated Capital Gains Tax 8.97% of estimated gain - paid at closing unless (i) Seller is a NY State resident at time of sale, or (ii) property was Seller's primary residence for 2 out of the last 5 years, or (iii) Seller has set up a 1031 Tax-Deferred Exchange (investment property only)
Transfer Tax Filing Fee $100
Federal Withholding Tax (FIRPTA) 10% of Sale Price if Seller is a non-resident foreigner
Payoff Bank Attorney Fee $375 - $500
UCC-3 Filing Fee $75 - $125
For the Purchaser

Cooperative Application Fee $500 - $1,000
Judgment and Lien Search $250 - $350
Recognition Agreement Fee $150 - $250
Maintenance Adjustment Not really a "closing cost". Purchaser reimburses Seller for the portion of maintenance that the Seller for
Bank Fees (only applicable if Purchaser is obtaining a loan)
Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application fee Variable depending on lender and loan product
Bank Attorney fee $700- $950
UCC-1 Filing fee $75- $125
General
Move-In Deposit - refundable $500- $1,000
Move-In Fee - non-refundable $250- $1,000
Purchase Application Fee $500- $1,000
Mansion Tax 1% of Purchase Price if $1,000,000 or more
Purchaser's Attorney Fee Consult your attorney
New Construction
Sponsor Attorney's Fee Consult your attorney
Sponsor's NYC and NYS Transfer Taxes Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax)
Working Capital Fund Contribution 1 - 2 months of Maintenance