Deciding to purchase an apartment in New York doesn’t have to be difficult, especially if you choose to go with a condo. Only about 25% of homes for sale in the city are condos. You will find that although condos are rarer, they are easier to obtain. Condos can also be slightly more expensive than other types of homes for sale, but keeping size and amenities even, only by about 10%. Buying a condo is similar to buying a house. It is traditional ownership, where you have the deed to the property unlike buying a Co-Op where you own shares of the building.
Start by getting a mortgage pre-approval. You will need to present the mortgage lender with your paystubs, past 2 years’ taxes, employment verification, etc. to show that you will be able to handle the mortgage payments. Most condos only require a 10-20% down payment so you will need to be approved for 80-90% of the purchase price.
Next you will need to provide your financials to the Condo association. Unlike Co-Op board interviews, this is a fairly relaxed process. You can choose what you wish to disclose and which assets you’d like to be considered as part of their decision. Condo associations cannot deny you as long as you meet the requirements. They do have the option of buying the unit themselves, as an association, but typically, they do not have the funds to do so. They must match your offer in order to win the negotiation. This is called the right of first refusal and it’s rarely implemented.
You will find on your house hunt that most newer buildings with units for sale are condos. The Co-Op model is phasing out. It is easier for the company that owns the building to sell each unit than to form a corporation, divide the shares, and pay the mortgage as a whole. Each year, as new developments are built, more condos become available to buyers.
Prepare yourself to pay monthly fees. You will pay your mortgage like you would with a house, but you will also pay a fee that will go towards the maintenance of the building and grounds. You will however, get an individual tax bill. It will not be included in your association fees.
Familiarize yourself with the rules. Although some condos can have strict rules about renovations and pet ownership, you may also have opportunities for subletting or making your condo a pied-a-terre. Condos are the best option for parents who may be buying an apartment for their children to live in. Every condo association has their own set of rules so make sure you know what they are before making your offer.
Finally, you need to prep for your closing. Once all of the details are ironed out, you’ll want the help of an attorney. She will make sure closing happens in a timely manner, that your interests are protected, and that all the contracts are executed correctly. This is when you will get the deed to your property, give the mortgage documents to the condo association, and get the keys to your new home.
