Cooking With Gas: Three Numbers to Know Before You Buy Your Nyc Apartment

How to Buy a Co-op Apartment In NYC

To buy a co-op property in NYC is to embark on a unique endeavor.

Purchasing in a co-op apartment is more so an application for membership to a financial collective where the buyer owns shares in the cooperative than it is purchasing an actual piece piece of “real property.â€

While condos typically afford more flexibility regarding whether or not the buyer can use the property as a primary residence and as an investment property to rent out, co-ops are typically more restrictive on that front. On the flip side, in NYC we pick our battles and while the co-op has more restrictions, the prices are often more competitive, in part due to supply — co-ops make up most of the type of inventory that is available for purchase in NYC.

With that said, three numbers to keep in mind as you prepare to embark on your search for a slice of the Big Apple if you are focusing on co-ops:

1. 20-25%

Buyers will typically need a minimum of 20-25% of the purchase price for a down payment in a co-op; exceptions exist so speak to your real estate agent if you need to focus on 10%-15% downpayment arena of opportunities!

2. 28%

Co-op building members, called shareholders, are beholden to each other in certain aspects – if a shareholder ceases to pay monthly maintenance dues to the co-op, the burden falls to the other shareholders to pick up the slack. Therefore, applicants are screened by the Co-op board regarding financial well-being and spending vs saving behavior, including, proof that the buyer’s ratio of debt to income (called DTI) is less than 28%.

3. 12-24 months

Co-op boards like to see that in the event a buyer applicant hits a financial hardship, the buyer has an emergency cushion of 12-24 months of monthly maintenance + monthly mortgage in addition to the initial down payment, in liquid reserves so as to sail through that hardship in terms of financial obligations to the co-op.

3 Pro tips: Chance Favors the prepared mind

1. Find an experienced real estate agent to work with to extrapolate on preparing to buy in NYC

2.Each co-op building has its own expectations – an experienced real estate agent will have experience in detailing and managing expectations

3.Here is a worksheet to help you get started.

Deborah Miller is a Licensed Real Estate Agent with Brown Harris Stevens in New York City. Her favorite things about co-ops are 1) real estate taxes are included in the monthly maintenance and 2) a portion of the monthly maintenance is tax deductible. Visit her and her Senior Broker, Ariela Heilman, at arieladeb.com and @debmillerpix