Buying a Condo in NYC – Step by Step Guide for 2024

Living in New York City is the dream for millions of people, and with rents steadily rising and space becoming evermore limited, it’s no wonder that many people are flocking to buy apartments.

Owning a condo in NYC allows you to enjoy all the benefits of living in the city without the stress of wondering when and where you’ll have to move next. To make the process of buying a condo in NYC a bit easier, we’ve created a step-by-step guide to assist prospective homebuyers in their journeys. This guide will walk you through the buying process, covering essential steps, insider tips, financial considerations, and the benefits of using a buyer's agent.

Find Your Dream Home (1 to +4 Months)

If you plan to finance your purchase, obtain a mortgage pre-approval or pre-qualification early on to ensure you are operating inside a budget you can afford.

Think about what features you are specifically looking for (neighborhood, beds, baths, etc.) and which amenities will matter most in your eventual condo. It can be difficult to find an apartment that checks every single box on your wishlist, so determine which items to prioritize in your search.

Understand the differences between co-ops, condos, or single-family homes, to determine what this means for your budget and which one might be best for you. Also, be sure to familiarize yourself with market trends for condos in your favorite neighborhoods - include price trends and the level of competition you will be faced with from other buyers.

Prevu’s digital buying platform will send you curated listings that meet your criteria. Plan to visit the properties that catch your eye, and also be sure to attend open houses. You can book private showings online through Prevu’s platform.

Our customer success team and local buyer’s agents are here to help throughout the process, don’t hesitate to reach out with any questions or concerns! A knowledgeable real estate agent can guide you through the apartment hunting process, providing market insights and helping you prioritize your needs.

Prepare an Offer (1 to 2 days)

Fill out a REBNY financial statement, as this is a common requirement when making an offer in NYC.

Rely on local data for comparable sales in your neighborhood to determine the fair market value of a property. Prevu’s expert agents will analyze the data to help you come up with a competitive offer.

Sometimes it’s an art as much as a science, and Prevu’s local agents will help evaluate more nuanced aspects of homes that the data may not capture. Hiring an attorney who specializes in real estate transactions is crucial to ensure a smooth process.

Discuss contingencies.

Get an Accepted Offer (1 day to several weeks)

Our licensed agents will negotiate a fair price for the apartment based on local market data and their experience. Some negotiations happen quickly, while others take time as sellers may remain firm in an effort to get the highest price.

Condo buildings generally have more amenities and a less intense approval process compared to co-ops.

While waiting for an accepted offer, it’s a good idea to line up your next two professionals:

A local real estate attorney
A home inspector should you plan to do an inspection.

Once the offer is accepted a deal sheet will be circulated. A deal sheet outlines all of the specific terms of the transaction.

Time kills all deals so it is important to be prepared to move quickly once the offer is accepted. An accepted offer means very little until the deal is in contract.

Legal Contract Review and Due Diligence (3 to 7 days)

Once the deal sheet is finalized, it will be sent to both the buyer’s and seller’s attorneys. The deal sheet will be used to start the due diligence process on the building. Your attorney will investigate the building, its finances, condo rules and regulations, and the unit itself (e.g. are there any open permits, lawsuits, etc.), as

Co-op owners purchase shares of a corporation and abide by strict financial requirements and rules set by the co-op board, which is different than that of a condo.

Your attorney will negotiate the terms of the contract and ensure the contract reflects the terms of the deal as well as your best interests with buyer protections via appropriate contingencies.

Typically your attorney will provide you with a summary of the due diligence they have compiled. Assuming no issues, at this point you would sign the contract and wire 10% of the purchase price as the contract deposit to be held in escrow. Once the seller and their attorney receive the signed contract, the seller will countersign and send back a fully-executed contract.

The seller’s attorney will also confirm receipt of the escrow funds into their escrow account. The contract deposit will eventually be applied to the down payment and money you will need to bring to closing.

Mortgage Process (30 to 45 days)

Once you have a fully executed contract (commonly referred to as being “in contract”) and if you are planning to finance your purchase, the next step will be to work with your mortgage broker or lender to obtain a commitment letter. Be proactive here as you want to make sure the lender has everything they need so this part of the process moves quickly.

Make sure that an appraisal is scheduled as soon as possible.

Note that many attorneys will advise you not to lock in a mortgage rate until your lender knows from the contract “on or about” when the property should close. Closing dates can be delayed and can result in extra fees paid to the lender to maintain a rate.

The lender will eventually issue a commitment letter (different than a preapproval or prequalification). The commitment letter requires a deeper look at your financial situation than a pre-approval. The commitment letter essentially is a letter that states that the lender will fund the loan for your new home.

Note this letter may have some additional contingencies for the lender (e.g. that you keep your job). A commitment letter usually isn’t binding until the property appraisal is completed and satisfactory versus the purchase. The appraisal can occur after the commitment letter is delivered.

It is a good idea to get going straight away once your contract is fully executed because many times if your contract is contingent on financing, you will have a certain window, usually 30 days, to submit your commitment letter to the seller side.

If at the end of the window you are not able to secure the commitment letter in good faith you are able to cancel the contract and receive your deposit back. Alternatively, you could ask for an extension to allow for more time.

Title Report & Title Insurance

After a fully-executed contract, your attorney will begin work on the title report. Lawyers will use outside companies to do title searches on the land, building, and unit.

The title search is completed to make sure there is confidence that a clean deed will be able to be delivered at closing.

Your title insurance policy will protect against any issues that may arise in the future relating to your home’s title.

Condo Board Application (If Applicable)

Even though you are buying in a condo building, there is still typically a condo board application (except for new developments). Condo board packages are typically much less rigorous than in a co-op building.

Condos tend to be found in newer developments, have more amenities, and are generally more expensive than co-ops.

A condo board has much less power than a co-op board. Typically a board can only prevent you from buying the condo if they execute their “right of first refusal”. What does this mean? It essentially means that the condo has the right to buy the condo ahead of you for the same price. Rest assured, they almost never exercise this option.

The package will mainly include financial statements and documents but may require letters of recommendation as well.

Preparing to Close

After the condo board has decided not to elect its right of first refusal and you have “passed” the board, the condo board will approve the sale/transaction. This will come either through your Prevu agent, the management company of the building, or your attorney.

The next step is to get the “clear to close” from your lender. This will come from the bank, likely from the bank’s attorney. Your attorney will be in close contact with the bank attorney during this process.

After getting both the clear to close from your lender and the approval from the condo board, you can proceed to scheduling a closing date.

There will be many peoples’ schedules to coordinate with, so you may have to be flexible in the timing or take what you can get.

Should you not be able to attend the closing in person, it is not unusual for buyers or sellers to use a Power of Attorney and skip the closing altogether.

If you haven’t already, make sure that you have secured homeowner’s insurance for your new home effective on the closing date. This is especially important if you’re financing the purchase with a mortgage, as homeowner’s insurance is often a requirement.

The Actual Closing and Closing Costs

Coordinate with your Prevu agent for a final walkthrough of the apartment to make sure everything is in good order before closing. This typically occurs the day of closing or a day or two before closing.

Be on standby in the final days prior to closing. You will likely only receive your instructions a couple of days beforehand, and there are two things you will need to pay special attention to: 1) your closing disclosure or statement (by law, this must be sent to you three days before closing, otherwise you can’t close until that time has elapsed) and 2) check instructions. If you are financing, the bank will be bringing the lion’s share of the money to closing, and you will be bringing the rest.

Checks are important, pay special attention to instructions from your real estate attorney

All checks need to be certified or official bank checks, from a bank that is a member of the NY Banking Clearinghouse.

The best way of avoiding the headache of getting checks yourself is to simply wire the amount to your attorney and have them take care of this task for all the remainder of your down payment and closing costs.

The closing can take a couple of hours. Make sure your hand is rested and don’t forget to bring a comfortable pen with you as you will have a lot of papers to sign.

Get your new keys, and congratulations! You just bought a new home!