How to Buy a Condo in NYC


Owning real estate in New York City is a dream come true for many. Whether you’re moving to the big apple or you’re already living here and are done with renting and are ready to take the plunge into homeownership, you might be looking into buying a condo in NYC. But as one of the toughest cities in the world to buy real estate, we understand how daunting that may seem. To make it easier for you, we’ve created this comprehensive guide to buying a condo in NYC.

NYC is one of the most active and most competitive real estate markets in the entire world. But don’t let that scare you away from finding the condo of your dreams and buying it as your own. From determining how much you’re willing to spend all the way through the closing day and moving in, we’re going to cover every step of the way in this guide.

9 Steps to Buying a Condo in NYC

Determine How Much You Are Willing to Spend

Before you even start looking into buying a new condo, the very first thing you should do is take a serious look at your finances and determine how much you’re willing to spend. New York City condos are expensive, so you need to have a solid number in mind before you start looking, so you don’t get carried away.

Start by taking a look at your monthly income — ensuring that it’s a reliable number — and then subtracting all other expenses, besides rent or the potential mortgage. That will tell you how much money you have left over after everything else than you can reasonably afford to pay every month.

The worst thing that can happen is you spend months searching for the perfect place, and you manage to secure the loan, only to realize that the monthly payment is running you dry and you really can’t afford it. 

Be realistic with yourself and make sure you have a budget in mind, then you can finally start looking. If you’re serious about buying, you should even consider getting a mortgage pre-approval or pre-qualification at this stage to really help nail down what you can afford.

Find a Buyer’s Broker or Real Estate Agent

Just like anywhere else in the country, you don’t need to use a broker or real estate agent to buy a place in NYC. But considering we’re talking about one of the toughest real estate markets in the entire world, we highly suggest you find a high-quality real estate agent to join your team. Even if you know you can find a property without an agent, consider working with a broker who offers a commission rebate as a way to save some money. And besides getting a rebate check at closing, your agent will help you when it’s time to make an offer and negotiate the purchase price. They can handle everything and make sure you’re protected.  

It’s also important to remember that the NYC real estate market is competitive and that agents and brokers have access to listings quicker and easier than anyone else, so there’s also some benefit in working with them from the get-go as they can help you get early access to properties across the city.

Start Looking for Your Next Home

Once you have an idea of what you’re looking to spend, then you can start looking for your dream condo. It’s important to at least have some semblance of an idea of what your budget is before you start looking since the budget will dictate where you can live in many cases.

If you have a modest budget, for example, you likely won’t be looking to buy a condo in the Upper East Side of Manhattan, so you don’t even want to go down that rabbit hole! But you’ll also want to have an idea early on of how many beds and baths you want, what kind of neighborhood you want to live in, what things you want to have access to nearby.

For all of these reasons, we suggest you start looking for a place early, as soon as you think you’re going to end up buying. In the NYC real estate market, this process could very easily take months due to competition and how quickly properties are listed and then subsequently purchased. Be patient, and find the perfect condo for you. An extra month or two looking is well worth spending years in a place you truly love.

Submit an Offer on Your Dream Home

If you don’t bring an agent on during your condo search, you’ll definitely want to do so at this point so you can prepare and submit an offer. The first thing to do is have your agent or broker do a market analysis of the surrounding condos that are comparable so that you can both have a true idea of what the fair market value of the property is.

Your agent should really be guiding the ship at this point, as preparing and submitting an effective offer takes much more hands-on experience than you would likely have. Be sure to go over any contingencies with your agent and include everything that you discuss in the offer.

Your agent will also likely have you fill out a REBNY Financial Statement. This document has become a common requirement to accompany all offers submitted on properties listed in the Real Estate Board of New York’s (REBNY) Residential Listing Service to show the seller that your offer is legitimate.

Hire a Real Estate Attorney to Perform Due Diligence

While you’re waiting for the offer to be accepted, you’ll want to hire the next member of your team — a New York City real estate attorney. Because once the offer is accepted, a deal sheet will be sent to the attorneys on both sides of the deal, who will then largely take over from there.

So it’s important that you have your lawyer ready to go before that point because things move fast in NYC real estate. If you don’t have your ducks in a row when the time comes, you’ll very likely miss out on actually securing the deal.

The attorneys will then handle all due diligence — investigate the property, check out the seller’s financials, see if there is any pending litigation, etc. — to ensure the deal is good to go. If everything goes well, you’ll sign the contract at this point and transfer a deposit amount (usually 10%) into escrow. 

Once the seller and their attorney get the contract and see the funds in the escrow, they can then countersign the contract to fully execute it. 

Close on the Mortgage

Earlier (in the very first step), we suggested that you get pre-approved for your mortgage to make the process easier. At this point, after the contract has been executed, it’s time to lock everything in and close on the mortgage entirely.

The goal here is to get it finalized and obtain a commitment letter from the bank or lender that is offering you the mortgage. This commitment letter is required by the seller and their attorney to ensure that the loan is going to be funded as well as any contingencies that they have.

Get the Title Search and Insurance Straightened Out

After the contract has been executed, your attorney will start performing a title search on the land, building, unit, and anything else necessary to obtain a title report. The point of this search is just to make sure that the title (or deed) is free and clear, and you’ll be getting a clean title once you officially close on the property. 

Simultaneously, you’ll want to obtain a solid title insurance policy during this time. Even if the title report from your attorney comes back clean and everything seems to be good to go, title insurance will protect you against issues that arise at any time in the future with the title. These policies are not too expensive and well worth the peace of mind and protection they offer.

Get Approval From the Condo Board

Most condos require you to submit an application to the board before you’re technically allowed to buy the unit. It’s basically just an additional check of your finances to ensure that everything is in order. Which, if you’ve gotten to this point, everything is almost guaranteed to be in order!

Don’t stress too much about this process, as it’s really just a formality once you’ve made it to this point. In fact, condo boards almost never exercise their right to refuse a purchase. Because if they do, then they have to buy the unit themselves at the agreed-upon price. 

It’s a bit of a strange process, but it’s just part of buying a condo in NYC!

Closing Day and Moving In

After the board approves you, you’ll just be waiting for the lender to send your attorney a clear to close letter. Once you receive that, you can schedule the actual closing date and ensure that everyone involved is going to be there — yourself, the seller, the lender, real estate agents, and all attorneys.

Once the closing day arrives, you’ll need to cut any checks necessary, pay all the additional buyer’s closing costs in NYC, and sign any paperwork as required. The closing process itself will only take a couple of hours, but it’s likely been months getting to this point!

After the closing has finished, that’s it! You’ll officially be the owner of your new home in NYC — congratulations!