nyc first time home buyer

NYC First Time Home Buyer

First time buying a home in NYC can be a very daunting and difficult process. In a strong sellers market, New York City home buyers are often big investors that come in significantly above ask or put all cash offers that are very hard to compete with. As much as it is exciting to own a property for the first time one needs to take this process very seriously.

In order to make your process as easy as possible we would like to offer these ultimate 7 tip guide for first time home buyers.

1. Make sure to have money saved for your down payment

In NYC each building has a requirement of how much you can put down on an apartment. For Condos, they typically have a minimum of 10% to 20% down. Versus a Coop (which I will explain later the difference) can have minimums starting at about 35% and up. Aside from your down payment you also need money for your closing costs. The online publication Brick Underground provides a good estimate of how much closing costs can be for each type of building.

If you are looking to buy a $1,000,000 condo, you would need to have about a minimum of $100,000 to put down for your “down payment.” For a coop that can easily go up to about $350,000.

The following are extra costs not included in your down payment:

  • Board package
  • Mansion tax
  • Appraisal
  • Mortgage initiation costs
  • Building fees
  • And many others

A range for closing costs can be around 2-4% of the sales price.

2. Credit Score

Unless you are doing an all cash deal, your credit score will greatly affect your borrowing capacity with a bank.

It certainly helps to know your credit score ahead of the time. FICO credit score is measured anywhere from 300 to 850 points. A score above 700 usually means good and will not have any major issues.

Just in case if there is something that is dragging your score down you can take your time to clean it up. Some minor issues can be high debt to income ratio or an outstanding non paid traffic ticket. So correcting them ahead of time will allow you to bring your score up.

A free and easy site to to quickly get an estimate of your credit score – Credit Karma.

3. Obtaining a Pre-Approval for a Mortgage

A very important step is to get a pre-approval letter from your lender. It is important to have it in order to see how much money you can actually spend for your home. Also in such a dynamic market such as NYC, making an offer without having a pre approval letter will not be taken seriously in most cases.

Feel free to reach out to us to refer great mortgage brokers!

4. Get a Buyers Agent

Searching for an apartment on your own can be exhausting and overwhelming. It is very important to work with a knowledgeable real estate agent that can guide you throughout the entire process with ease. They will try to arrange an appointment to meet at the office and see what are your must haves, your dream list, desired neighborhoods, etc.

There are two sides of a real estate transaction – the sellers side and the buyers side. Since this article is about buying a home in NYC, I suggest getting a buyers agent to represent you on the buying side.


You are dealing with one of the most important transactions in your life. Having a buyers agent will look out in your best interest and not the sellers. They are looking to getting you the best deal, and making sure that you are on track from an accepted offer – all the way to the closing table. The best part about working with a buyers agent, its free.

Commission is always normally paid by the seller. So why would you not have one? Think about it.

5. Understanding Coop vs Condo

The main difference between Condo and Coop is that in a Condo you own the property outright, while in a Coop you buy shares that give you a proprietary lease.

You are required to present lots of financial documents to both types of buildings – however in a Coop your financials will be closely looked at and will require a lot more proof. A Coop will also require a board interview, where they can approve or reject a potential buyer without giving a reason. One of the benefits of a Coop is that they are priced much lower than similar condo units.

To learn more about the difference between Condo and Coop follow the link from Washington Post Condo vs. Coop

6. Check out Apartments

If you are actively searching it is important to look at apartments every week. In this dynamic market, apartments priced correctly can come and go fast. In the beginning, it is important to visit open houses with your agent to narrow down the following criteria:

Which neighborhoods do you like?

Does the size of the apartment you originally picked work for you?

Are you okay with walk up buildings or do you need to start searching for elevator buildings?

And so on…

7. Find a Real Estate Attorney

When you find an apartment you like, and your offer is accepted – it is time to bring in a real estate attorney to look over the contract. Before signing any contract, you are required by law to have an attorney involved. The reason is because in NYC you are dealing with multi million dollar transactions. At times we have had clients tell us that they know an attorney from back home (normally from out of town) – who can help out with the deal. We suggest not to do that, because you need an attorney who has experience dealing with NYC real estate. It is a completely different ball game in the city.

Bottom line – have an awesome NYC real estate attorney. Need help? We know a few.


I hope these tips help you in finding your first home! If you need any help, feel free to reach out to us. [email protected]

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