Buying Real Estate in New York City

Overview of the steps to buying real estate in NYC

Generally buying a home in NYC involves the following steps:

  1. Decide on your desired neighborhoods. Make sure to do a lot of exploring to make sure you'll be comfortable living there. 
  2. If you plan to get financing, speak to a local lender and obtain a pre-approval for the loan amount you are looking for. Make sure to get a pre-approval letter.
  3. Once you find a property you like, as your broker for a comparable market analysis to estimate fair market value.
  4. Select an experienced local NYC real estate attorney. 
  5. Make a written offer by filling out the submit offer form. Your broker may ask you to attach supporting documents such as your pre-approval letter and proof of funds for the down payment. Discuss any contingencies such as a home inspection with your broker and include them in writing. 
  6. Wait for the seller to accept or counter your offer.
  7. Once you have an accepted offer, the seller's attorney will send contracts to your attorney. Your attorney will review the contract and perform all required due diligence. 
  8. Once the contract is negotiated, you will need sign the contract and pay the contract deposit which is typically 10% of the purchase price. This is held in escrow and released at closing. 
  9. Submit your mortgage application and work with your lender to secure financing.
  10. Submit an application to the condo or co-op application (if applicable).
  11. Upon approval from your lender, and from the board (if applicable) your attorney will coordinate with all parties to schedule your closing. 

BE PREPARED WITH THE FOLLOWING DOCUMENTS

  1. Past three years of tax returns
  2. Pre-approval letter from your mortgage bank or broker
  3. Past three months statements for your checking, savings, brokerage, and retirement accounts, and any other liquid assets. 
  4. Employment verification letter stating your start date, salary, and start date. 
  5. If self employed - letter from your CPA or attorney 
  6. For a co-op or condo, letters of reference from your bank, colleagues.

Buyer's Closing Costs

Estimated Expenses

The following costs are approximate and should only be used as a guide.

 

Condominium Closing Costs

Mortgage-related fees (if financing):

Appraisal fee $300-$1,500
Credit report fee $75
Mortgage points 0%-2% of loan
Mortgage tax (paid by borrower):
Mortgage up to $500,000 1.8%
Mortgage over $500,000 (1-3 family homes) 1.925%
Mortgage over $500,000 (all others) 2.8%
Bank underwriting fee $350 and up
Bank legal fees $750 and up
Application fee $500 per application

Additional expenses:

Condo board application $500
Buyer's attorney $2,500
Condo credit report $75
Move-in deposit $1,000
Move-in fee $250
Title search + insurance 0.5%-0.8% of sales price
Recording charge $250-$750
Title closer fee $150-$250
Municipal search $350-$500
Tax escrows 2 to 6 months
Common charges Prorated; paid through end of month
Mansion tax 1% of total price—for sales over $1 million

Co-op Closing Costs

Mortgage-related fees (if financing):

Appraisal fee $300-$1,500
Credit report fee $75
Mortgage points 0%-2% of loan
Bank underwriting fee $350 and up
Bank legal fees $750 and up
UCC filing fee $100

Additional expenses:

Co-op board application $500
Buyer's attorney $2,500
Managing agent credit report $150
Move-in deposit $1,000
Move-in fee $300
UCC lien search $250-$350
Recognition agreement fee $200 and up
Short term interest Interest for closing month
Misc. co-op charges Varies by building
Maintenance charge Prorated; through end of month
Mansion tax 1% of total price—for sales over $1 million

1-4 Family House Closing Costs

Appraisal fee $300-$1,500
Credit report fee $75
Buyer's attorney $2,500
Bank fees $750
Bank attorney $650-$750
Application fee $350
Processing fee $330
Mortgage tax (paid by borrower):
Mortgage up to $500,000 1.8%
Mortgage over $500,000 1.925%
Tax escrows 2 to 6 months
Recording fees $250-$750
Fee title insurance Varies
Mortgage title insurance Varies
Municipal search $350-$500