New York City is known for its diverse real estate offerings, and among these options, co-ops and condos stand out as popular choices for homebuyers. Navigating the co-op and condo market can be a daunting task, particularly for first-time buyers.
Read on for a comprehensive guide to understanding the differences between co-ops and condos, the buying process, and the factors to consider when choosing the right home in the city that never sleeps.
What’s the Difference?
Understanding the fundamental differences between co-ops and condos is essential before diving into the city’s real estate market.
Co-Ops:
- Ownership: When buying a co-op, you’re purchasing shares in a corporation that owns the building, and in return, you receive a proprietary lease for your apartment.
- Board Approval: Co-op boards have a say in who can buy into the building, and they can reject prospective buyers without providing a reason.
- Maintenance Fees: Co-op owners typically pay one monthly maintenance fee, which covers the building’s underlying mortgage, property taxes, and common expenses.
Condos:
- Ownership: With a condo, you’re purchasing real property, and you receive a deed for your unit.
- Easier Approval: Condos have less stringent approval processes, making it simpler for buyers to get approved.
- Common Charges and Taxes: Condo owners pay separate common charges for building maintenance and property taxes for their units.
The Buying Process: Steps to Purchasing Your New Home
- Buyer Consultation – You will meet with your agent to set goals, priorities and criteria to kick off your home search.
- Get Pre-Approved (If Financing) – You’ll need a pre-approval letter to put an offer on a home. Pre-approval also helps you set a budget for your property search.
- Tour Properties – After discussing wants vs. needs regarding your new home, and determining a price point to work with, your agent will take you on tours to see properties in-person.
- Present Offers & Negotiate – Once you find a property you like, work with your agent to submit a competitive offer.
- Conduct Due Diligence & Sign Contract – Your agent and attorney will help make sure your offer is well-crafted, and once all parties agree on terms, you’ll both sign and enter the “in contract” phase.
- Prepare Board Package (If Needed) – For co-ops, you’ll need to submit a board package and attend a board interview. Condo buyers need to complete a condo application package for the association’s review. The application for a co-op usually requires much more detail, often including both personal and professional reference letters.
- Coordinate Appraisals (If Financing) – Your agent will work with an appraiser to schedule time for them to assess the value of the property, and provide that information to the lender, if financing.
- Schedule Closing – Your agent will schedule a closing day that works for you and the vendors conducting the closing.
- Conduct A Final Walkthrough – You and your agent will do a final walkthrough of the property to make sure the property is in the physical condition that was agreed upon when you signed the offer.
- Closing Day – Attend the closing, sign all necessary documents, and receive the keys to your new home!
Factors to Consider When Starting Your Property Search
- Location – Consider factors such as proximity to work, public transportation, schools, and amenities when selecting a neighborhood.
- Building Amenities – Evaluate the building’s amenities, such as doorman service, fitness center, rooftop access, and laundry facilities.
- Resale Potential – Investigate the building’s resale history and potential for future appreciation.
- Co-op or Condo Rules – Review the rules and regulations of the building, including pet policies, subletting restrictions, and alteration policies.
- Financial Stability – Ensure the building’s financials are in good shape by reviewing the reserve fund and any upcoming assessments or capital improvements.
Navigating the co-op and condo market in New York City can be challenging, but with the right knowledge and guidance, you can find your perfect home in this vibrant city. Reach out to Platinum Properties today to be connected with an agent who can help you navigate this process.
