Buying your first home in New York City means navigating one of the world’s most complex and competitive real estate markets. First-time homebuyers now represent a growing share of NYC purchase mortgages even as affordability pressures get worse. Manhattan condominiums command roughly 15-26% price premiums over comparable co-ops, while bidding wars push 27% of new leases and many sales above asking price. Accepted offers average a 3.7% premium in high-demand segments.
Factor in closing costs that run 2-6% of the purchase price for buyers, New York’s mansion tax kicking in at properties valued at $1 million or more, and strict co-op board approval processes requiring 20-50% down payments. It becomes clear why 47% of recent NYC homeowners report at least one regret. The most common regret? Surprise maintenance fees and hidden closing costs that weren’t properly budgeted.
Add rapidly changing broker commission rules that now shift more costs onto buyers, plus co-op subletting restrictions that limit investment flexibility. Small missteps turn expensive fast. This comprehensive guide from Robert DeFalco Realty distills the 10 biggest first-time homebuyer mistakes in NYC and pairs each with actionable solutions. You’ll learn how to access HomeFirst’s $100,000 down payment assistance program and understand the difference between Mortgage Recording Tax obligations for condos versus co-ops. Shop with confidence and avoid costly errors.
Whether you’re deciding between a co-op with lower purchase prices but stricter board oversight or a condominium with more ownership flexibility at higher cost, understanding these critical mistakes will save you tens of thousands of dollars and months of frustration.
Mistake #1: Touring Properties Without Mortgage Pre-Approval
What goes wrong
Shopping for NYC real estate without a mortgage pre-approval letter is the fastest way to lose competitive properties. Buyers without pre-approval lose New York bidding wars twice as often as those who present underwritten commitment letters, according to a March 2025 Manhattan real estate agent poll.
Why this hurts
In a market where properties receive multiple offers within days—and 27% of Manhattan leases now involve bidding wars—sellers and their agents prioritize financially qualified buyers. Without pre-approval, your offer gets sidelined even if you’re willing to pay asking price or above. Co-op boards require pre-approval documentation before even scheduling interviews, wasting weeks if you start the process after finding your dream apartment.
How to fix it
Get mortgage pre-approval before your first property tour. Follow our comprehensive pre-approval guide to understand required documents and the full underwriting process. Pre-approval differs from pre-qualification: pre-approval involves full underwriting of your income, assets, credit score, and debt-to-income ratio. The result is a conditional commitment letter specifying your maximum loan amount.
Calculate your total NYC affordability including closing costs (2-6% of purchase price), monthly maintenance or common charges, property taxes, and regional cost-of-living expenses. Studies show 45% of NYC buyers later regret underestimating these recurring costs when setting their initial budget.
Pro Tip: Work with lenders familiar with NYC’s unique property types. Co-op financing requirements differ significantly from condo mortgages, and not all lenders handle co-op loans well.
Mistake #2: Budgeting Only for the Purchase Price
What goes wrong
Focusing exclusively on saving for a down payment while overlooking closing costs, ongoing maintenance charges, property taxes, and one-time move-in fees. NYC’s closing cost structure differs dramatically from other U.S. markets.
Why this hurts
NYC buyer closing costs typically run 2-5% of the purchase price—but can reach 6% or more for new developments where buyers often cover additional sponsor-related expenses. For a $750,000 condominium, expect $15,000-$45,000 in closing costs alone.
These costs include:
Mortgage Recording Tax (MRT): 1.8% for loans under $500,000; 1.925% for loans $500,000+ (condos and townhouses only—co-ops exempt)
Mansion Tax: Progressive tax starting at 1% for properties $1M-$2M, scaling up to 3.9% for properties above $25M
Attorney Fees: $3,000-$5,000 (required in NYC—brokers cannot draft contracts)
Title Insurance: $1,500-$2,500 for condos and townhouses
Bank Fees: Loan origination (0.5-1%), appraisal ($500-$800), credit report ($50-$100)
Building Fees: Move-in deposits ($500-$2,000 refundable) plus non-refundable move-in fees ($300-$800)
Co-op purchases avoid Mortgage Recording Tax but may require flip taxes (1-3% transfer fees paid to the co-op corporation), paid by either buyer or seller depending on the building’s bylaws.
Beyond closing, budget for:
Monthly Maintenance (Co-ops): Includes property taxes, building operating costs, underlying mortgage, reserves—average $1-$2 per square foot
Common Charges (Condos): Cover building operations and amenities but exclude property taxes, which you pay separately
Special Assessments: One-time charges for major building repairs or capital improvements
How to fix it
Create a comprehensive budget spreadsheet covering down payment, all closing costs, 6-12 months of reserves (required by many co-op boards), and first-year ownership expenses. See our detailed closing cost breakdown for mansion-tax brackets, Mortgage Recording Tax calculations, and lender charges specific to each property type.
If cash is tight, explore down payment assistance programs like HomeFirst ($100,000 forgivable loans) and SONYMA (up to 97% financing with down payment assistance loans of $3,000-$15,000).
Mistake #3: Skipping Comprehensive Neighborhood Research
What goes wrong
Falling in love with an apartment without thoroughly vetting the surrounding neighborhood’s commute times, school quality, crime statistics, noise levels, flood risk, construction projects, and nightlife proximity.
Why this hurts
Location regret ranks as the biggest mistake for 14% of NYC homeowners. Unlike renters who can relocate after a one-year lease, homeowners face steep transaction costs. Selling within 2-3 years often results in financial loss after factoring in broker commissions (5-6%), closing costs, and potential co-op flip taxes.
Common oversights include:
- Unresearched subway closures or weekend service changes affecting primary commute
- Proximity to bars, nightclubs, or concert venues causing noise complaints
- Airport flight paths overhead (common in parts of Queens and Brooklyn)
- Construction projects lasting months or years
- Flood zones and evacuation zone classifications
- School district boundaries for families with children
- Street parking regulations and availability
How to fix it
Visit the neighborhood multiple times at different hours—weekday morning rush, evening commute, Friday/Saturday nights, Sunday afternoons. Talk to current residents, doormen, building supers, and local shop owners for candid insights about the area.
Our step-by-step home-buying timeline includes interactive mapping tools that overlay subway access, crime statistics, school ratings, and flood zone data. Walk the block at night to assess street lighting, pedestrian traffic, and noise levels. Check for major construction permits filed with NYC Department of Buildings.
Research the neighborhood’s trajectory: Are new developments coming? Is the area gentrifying or experiencing retail decline? Read local community board meeting minutes for planned infrastructure changes.
Pro Tip: If remote work flexibility exists, prioritize neighborhood fit over commute distance. Your workplace location may change, but your home environment impacts daily quality of life.
Mistake #4: Misunderstanding Co-op vs Condo Ownership Structures
What goes wrong
Treating co-ops and condominiums as interchangeable without understanding fundamental differences in ownership structure, financing requirements, board authority, subletting rules, and resale flexibility.
Why this hurts
Co-ops represent approximately 70-75% of NYC’s residential apartment inventory, making them the dominant property type first-time buyers encounter. Their ownership structure creates unique restrictions that surprise unprepared buyers.
Key differences at a glance
| Factor | Co-op | Condo |
|---|---|---|
| Ownership Type | Shares in corporation + proprietary lease to occupy specific unit | Real property deed to individual unit + shared common area ownership |
| Typical Down Payment | 20-50% (many buildings require 25%+) | 10-20% (conforming loans allow as low as 3% with PMI) |
| Financing | Not all lenders offer co-op mortgages; higher rates common | Standard mortgage product; broader lender availability |
| Board Approval Power | Full buyer veto authority without stated reason required | Limited; Right of First Refusal only (board must purchase unit to block sale) |
| Liquidity Requirements | 1-3 years of post-closing maintenance + mortgage reserves (in liquid assets) | Minimal reserves beyond closing costs |
| Debt-to-Income Ratio | Strict: 25-35% (mortgage + maintenance ÷ gross income) | Flexible: Up to 50% for conforming loans |
| Subletting Rules | Heavily restricted; minimum owner-occupancy periods (2-5 years); total subletting limits (2-3 years per 5-year period) | Generally permitted with minimal restrictions; board approval often pro forma |
| Monthly Costs | Maintenance (includes property taxes) | Common charges + separate property tax bill |
| Purchase Price | Typically 10-26% lower than comparable condos | Premium pricing for flexibility |
| Closing Costs | 1-2% (no Mortgage Recording Tax) | 4-6%+ (includes Mortgage Recording Tax) |
| Flip Tax | Common (1-3% of sale price, paid by seller or buyer per bylaws) | Rare |
| Foreign Buyers | Difficult to impossible (strict board oversight) | Welcomed (common for international investment) |
| Resale Speed | Slower (board approval process takes 4-8 weeks) | Faster (2-4 weeks for board approval) |
How to fix it
Determine your lifestyle priorities and financial capacity before viewing properties.
Choose a Co-op if:
- You prioritize lower purchase price and can afford 20-50% down payment
- You plan to live in the unit as primary residence long-term (5+ years)
- You have substantial liquid assets beyond down payment and closing costs
- You prefer stable, community-oriented buildings with vetted neighbors
- You don’t need subletting flexibility for job relocation or investment purposes
Choose a Condo if:
- You need lower down payment options (10-20% or less)
- You value subletting flexibility and investment potential
- You may relocate within 3-5 years and want easier resale
- You’re a foreign buyer or have complex income structures
- You prioritize modern amenities (most new developments are condos)
- You want predictable monthly costs without board assessment surprises
Pro Tip: Some buildings operate as “condops”—split structures with condominium and co-op sections. These are rare (<5% of inventory) but offer hybrid benefits. Always review the building’s proprietary lease (co-ops) or by-laws (condos) during due diligence. For more detailed guidance, see our complete first-time buyer guide for New York.
Mistake #5: Making Emotional Decisions During Negotiations
What goes wrong
Letting emotions override financial discipline when making purchase offers, especially in competitive bidding situations. Overpaying for a property tops the regret list for 15% of NYC homebuyers.
Why this hurts
Emotional attachment leads to overbidding beyond comfortable price ranges, waiving inspection contingencies to appear more attractive, or accepting unfavorable contract terms under pressure. In NYC’s competitive market where multiple offer scenarios are common, fear of losing a property can drive irrational decisions.
The consequences compound over time:
- Reduced or negative equity if market softens
- Financial stress from higher mortgage payments
- Difficulty saving for maintenance reserves or home improvements
- Potential to become “house poor”—unable to enjoy other aspects of city life
- Challenges refinancing if property appraises below purchase price
How to fix it
Create a written “must-have vs nice-to-have” feature list before attending your first property tour. Define non-negotiable requirements (location, bedrooms, outdoor space, natural light, building amenities) separately from preferences you’re willing to compromise on.
Set a firm maximum price threshold—not just what you’re pre-approved for, but what fits comfortably within your monthly budget while allowing for savings, emergencies, and discretionary spending. Stick to this number even in bidding wars.
Re-read your priority list 24 hours before signing any contract or making an offer. Sleep on major decisions and consult with your buyer’s agent about comparable sales data to ensure your offer aligns with market value.
Bidding war strategy
- Establish your absolute maximum price before offers are due
- Include an escalation clause with a cap ($5K-$10K increments up to your maximum)
- Present strongest financial package (large down payment, waived financing contingency if paying cash)
- Submit a personal letter to sellers (particularly effective with co-ops and owner-occupied sales)
- Have attorney review contract immediately to accelerate timelines
- Prepare proof of funds and pre-approval for instant submission
Pro Tip: In heated bidding situations, don’t get caught up in “winning at any cost” mentality. There will be other properties. Overpaying by $50,000-$100,000 creates years of financial stress that outweighs the short-term disappointment of losing one specific apartment.
Mistake #6: Delaying Real Estate Attorney Engagement
What goes wrong
Waiting until after finding a property to hire a real estate attorney, or attempting to navigate NYC contracts without legal counsel.
Why this hurts
New York State law requires attorneys to draft and review real estate contracts—brokers legally cannot prepare purchase agreements. Unlike many U.S. states where standardized contracts exist, NYC real estate contracts are heavily negotiated documents requiring legal expertise.
Without an experienced attorney involved early, buyers face:
- Unfavorable contract terms (seller-friendly clauses, weak contingencies)
- Missed due diligence deadlines
- Misunderstanding of board application requirements
- Inadequate review of building financial statements
- Title issues discovered late in the process
- Closing delays costing thousands in per-diem interest charges
- Potential legal liability from breached contracts
Attorney fees range from $3,000-$5,000 for standard transactions, reaching $6,000+ for complex new developments or co-op conversions.
How to fix it
Interview and retain a NYC real estate attorney before making any offers. Look for attorneys who:
- Close at least 50 NYC transactions annually (preferably 100+)
- Specialize in residential real estate (not general practice)
- Have experience with your target property type (co-op/condo/townhouse)
- Carry malpractice insurance (minimum $1M coverage)
- Provide client references from recent transactions
- Offer transparent flat-fee pricing
Your attorney will:
- Review and negotiate the purchase contract
- Conduct title search and resolve any liens or encumbrances
- Analyze building financial statements and meeting minutes
- Coordinate with your lender’s attorney
- Prepare board application packages for co-ops
- Attend contract signing and closing
- Ensure proper fund transfers and deed recording
Pro Tip: Ask your buyer’s agent for attorney referrals, but interview at least three candidates yourself. Attorney quality varies significantly, and choosing based solely on lowest price often costs more in missed negotiation opportunities and problematic contract terms.
Mistake #7: Failing to Audit Building Financial Health
What goes wrong
Accepting building financial statements at face value without analyzing key metrics that reveal financial stability, deferred maintenance, or impending special assessments.
Why this hurts
A building in poor financial health can result in:
- Unexpected special assessments ($10,000-$50,000+ per unit for major repairs)
- Declining property values as building reputation suffers
- Difficulty securing financing (lenders reject loans in financially unstable buildings)
- Problems selling in the future
- Deferred maintenance creating safety hazards
- Insufficient reserves for emergency repairs
Key red flags
- Reserve fund below 30% of annual operating budget
- Owner arrears (unpaid maintenance/common charges) exceeding 10% of units
- Pattern of special assessments in past 3-5 years
- Significant increase in monthly charges (>5% annually)
- Pending or ongoing litigation
- High owner turnover or low owner-occupancy rates
- Negative statements from managing agent
- Deferred maintenance items in engineers’ reports
- Inadequate insurance coverage
How to fix it
Request at minimum two years of:
- Audited financial statements (balance sheet, income statement, cash flow)
- Operating budgets (actual vs projected)
- Reserve study or capital needs assessment
- Board meeting minutes
- Engineer’s reports
- Insurance policies (building coverage)
- Schedule of mortgage (if building has underlying mortgage, common in co-ops)
- Common charges/maintenance history (past 5 years)
Calculate key ratios:
Reserve Ratio: Total reserves ÷ annual operating budget (target: 30%+)
Arrears Rate: Total unpaid charges ÷ total annual assessments (target: <10%)
Debt Service Coverage: Net operating income ÷ mortgage payments (co-ops only; target: >1.2x)
Review meeting minutes for discussion of:
- Upcoming capital projects and estimated costs
- Building system conditions (roof, boiler, elevator, façade)
- Legal issues or violations
- Special assessment discussions
Pro Tip: Hire an independent engineer ($500-$1,000) to review building financials and engineers’ reports if purchasing a unit over $1M or in a building with concerning financial indicators. The expense often prevents buying into a money pit.
Mistake #8: Waiving Professional Home Inspection
What goes wrong
Skipping a comprehensive home inspection to save $500-$800, or accepting a seller’s representation that a property is in good condition without independent verification.
Why this hurts
Major defects in NYC properties frequently involve:
Plumbing: Cast-iron pipes in pre-war buildings (common in Manhattan/Brooklyn buildings constructed before 1945) prone to corrosion and failure—replacement costs $15,000-$50,000+ per unit
Electrical: Knob-and-tube wiring, inadequate amperage, or aluminum wiring requiring full rewiring ($10,000-$30,000)
Foundation/Structural: Settlement issues, cracked foundations, or inadequate support beams in townhouses ($25,000-$100,000+)
Roof: Shared roof responsibility in condos; leaks causing interior damage ($5,000-$15,000)
Windows: Original single-pane windows needing replacement ($1,500-$3,000 per window)
HVAC: Outdated heating systems, especially in older buildings without central air conditioning
Water Intrusion: Chronic leaks from faulty waterproofing, especially in below-grade spaces
Environmental: Asbestos, lead paint, mold (remediation $3,000-$25,000+)
Co-op and condo buildings handle building-wide systems, but you’re responsible for everything within your unit’s walls. Townhouse owners bear 100% responsibility for all systems and structural elements.
How to fix it
Hire a licensed home inspector with specific experience in NYC construction types:
- Pre-war buildings (1900-1945): Cast-iron plumbing, steam heat, ornate details, structural specifics
- Post-war construction (1945-1980): Different plumbing materials, building codes
- Modern construction (1980+): Different systems and materials
Inspection costs: $500-$800 for apartments, $800-$1,500 for townhouses.
Attend the inspection in person to:
- Ask questions about findings
- Understand difference between critical vs cosmetic issues
- Get maintenance recommendations
- Learn about major systems’ expected lifespans
Use inspection findings to:
- Negotiate price reduction for major defects
- Request seller-funded repair credits at closing
- Renegotiate contract if issues are substantial
- Walk away if inspection reveals deal-breaking problems (within contingency period)
Pro Tip: Hire inspectors who specialize in pre-war buildings if purchasing in older NYC stock—construction techniques, materials, and common problems differ significantly from modern construction. Ask for a sample inspection report before hiring to ensure thoroughness.
Mistake #9: Not Maximizing Grant and Financing Programs
What goes wrong
Overlooking the substantial down payment assistance and affordable financing programs available to NYC first-time homebuyers, leaving tens of thousands of dollars in assistance unclaimed.
Why this hurts
Coming up with 10-50% down payment plus 2-6% closing costs creates the biggest barrier to homeownership for most first-time buyers. Without awareness of available programs, qualified buyers either:
- Delay homeownership for years while saving
- Purchase less desirable properties to meet lower price points
- Drain emergency funds and retirement accounts to cover down payments
- Miss out on home price appreciation during saving periods
- Pay higher interest rates by using subprime lenders
Major NYC programs (2025)
HomeFirst Down Payment Assistance (NYC HPD):
- Amount: Up to $100,000 forgivable loan (20% of purchase price or $100,000, whichever is less)
- Eligible Properties: 1-4 family homes, condos, co-ops in all five boroughs
- Requirements: First-time buyer (no home ownership in past 3 years); income limits vary by borough and household size; complete homebuyer education course through HPD-approved agency; must contribute minimum 3% from own funds; owner-occupancy requirement (15 years); purchase price below HUD limits
- Loan Terms: 0% interest, no monthly payments, fully forgiven after 15 years of owner-occupancy, or pro-rated forgiveness if sold earlier
- Application: Through HPD-approved housing counseling agencies in each borough
SONYMA (State of New York Mortgage Agency):
- Low-Interest Mortgages: Below-market interest rates for first-time buyers
- Down Payment Assistance Loan (DPAL): $3,000-$15,000 (3% of purchase price capped at $15,000); 0% interest, forgiven after 10 years
- Requirements: Income limits (varies by region and household size); first-time buyer or no home ownership in past 3 years; complete homebuyer education course; purchase price below program limits
- Note: Interest rate on first mortgage with DPAL is 0.375% higher than without
Federal Home Loan Bank (FHLB) Programs:
- Various down payment assistance grants up to $15,000
- Administered through participating lenders
- Income limits typically 80% of Area Median Income (AMI)
FHA Loans:
- Down payment as low as 3.5%
- More flexible credit requirements (minimum 580 FICO)
- Available for condos (must be FHA-approved) and some co-ops
VA Loans (Veterans):
- 0% down payment for qualified military veterans and active service members
- Limited to condos and townhouses (co-ops generally not eligible)
Employer Assistance Programs:
- Some NYC employers offer down payment assistance as employee benefit
- Check with HR department
How to fix it
Start research 6-12 months before planned purchase:
- Contact HPD-approved housing counseling agency for HomeFirst application
- Complete required homebuyer education course (8-12 hours, often free)
- Apply for SONYMA through participating lenders
- Get pre-qualified for FHA/VA loans if eligible
- Research employer assistance programs
- Stack multiple programs where allowed (HomeFirst + SONYMA possible in some scenarios)
Income Limits Example (2025 HomeFirst):
- Manhattan 1-person household: ~$174,000
- Brooklyn/Queens 1-person household: ~$135,000
- Limits increase with household size
- Higher limits in low-to-moderate income census tracts
Pro Tip: Start the HomeFirst application process early—counseling agencies have waitlists, and the homebuyer education course takes time to complete. Missing this deadline while in contract can cause financing contingencies to expire, risking your deposit.
Mistake #10: Moving Too Slowly in Competitive Bidding Situations
What goes wrong
Hesitating or taking days to submit offers in NYC’s fast-moving market, particularly during spring/summer peak buying season when properties receive multiple offers within 24-48 hours of listing.
Why this hurts
Nearly 27% of Manhattan leases signed in early 2025 involved bidding wars—a record share reflecting inventory constraints. In purchase markets, desirable properties receive multiple offers above asking price within days of listing.
Buyers who move slowly:
- Miss opportunities entirely as properties go into contract before viewing
- Submit offers after sellers have already accepted competing bids
- Lose leverage in negotiations as sellers prioritize decisive buyers
- Face ongoing rent payments while searching extends for months
The psychological cost compounds—watching property after property slip away creates frustration, burnout, and sometimes panic decisions on less suitable properties.
How to fix it
Prepare a “ready-to-buy” package before viewing properties.
Pre-offer preparation:
- Mortgage pre-approval letter (updated within 30 days)
- Proof of down payment funds (bank statements, investment account statements)
- Complete co-op board application package template
- Attorney retained and contact information ready
- DocuSign or other e-signature account set up
- Personal financial statement prepared
- Reference letters collected (professional, personal, previous landlords)
- Photo ID and employment verification documents scanned
Rapid response protocol:
- View properties within 24 hours of listing if matching criteria
- Submit offers within 24-48 hours of viewing
- Make yourself available for immediate follow-up questions
- Keep phone on and email accessible during active house hunting
- Have your attorney on standby to review contracts immediately
- Coordinate with your agent to submit competitive offers with clear terms
Escalation tactics:
- Escalation clause: “X dollars above highest competing offer up to maximum $Y” in increments of $5,000-$10,000
- Shorten contingency periods if comfortable (inspection within 7 days vs standard 14)
- Waive financing contingency only if paying all cash or have exceptional financial position
- Larger earnest money deposit (10% vs standard 5%) signals commitment
- Clean offer with minimal seller concessions requested
- Flexible closing timeline matching seller’s preferences
Pro Tip: In multiple-offer situations, sellers often accept offers that are $10,000-$20,000 lower from buyers who appear more likely to close smoothly (strong financials, experienced attorney, no complicated contingencies) versus the highest offer from risky buyers. Work with your agent to present yourself as the reliable choice. Review our proven bidding war strategies for additional tactical guidance on competitive offers.
Frequently Asked Questions
What’s the single biggest mistake NYC first-time homebuyers make?
Shopping without mortgage pre-approval. Uncertified buyers lose bidding wars twice as often and waste weeks touring properties they can’t actually afford or secure financing for. Get pre-approved before viewing any properties—it’s free and takes 2-3 days with proper documentation.
How much cash do I actually need beyond the purchase price in NYC?
Plan for 2-6% closing costs (varies by property type: co-ops ~2%, condos ~4-5%, new developments ~6%+) plus 20-50% down payment depending on property type, plus 6-12 months of reserves if purchasing a co-op. For a $750,000 condo with 20% down payment ($150,000), budget approximately $150,000 down + $37,500 closing costs + $5,000 reserves = $192,500 total cash needed. Factor in the mansion tax if purchasing above $1 million (starts at 1%, scales up).
Are co-ops really that much cheaper than condos?
Yes—co-ops typically cost 10-26% less than comparable condos in the same neighborhood. Co-ops require higher down payments (20-50% vs 10-20%), stricter board approval, significant post-closing liquidity reserves (1-3 years of monthly costs), and impose subletting restrictions. The lower purchase price comes with reduced flexibility. Run a total cost of ownership analysis comparing co-op and condo options at your price point.
Can I access the $100,000 HomeFirst grant if I make six figures?
Possibly—income limits vary by borough and household size. For 2025, Manhattan limits for a 1-person household are approximately $174,000, while Brooklyn and Queens limits are around $135,000. Limits increase with household size. Higher income limits apply in designated low-to-moderate income census tracts throughout NYC. Contact an HPD-approved housing counseling agency to verify your specific eligibility.
Do I really need a real estate attorney for an NYC home purchase?
Yes—New York State law requires real estate attorneys to draft and review purchase contracts. Brokers cannot legally prepare contracts. Attorney fees ($3,000-$5,000) are non-negotiable expenses, but they protect you from costly contract errors, unfavorable terms, title issues, and board application mistakes. Attempting a NYC real estate transaction without an attorney is illegal and financially reckless.
How long does the co-op board approval process take?
The typical co-op board approval process takes 4-8 weeks from application submission to board interview to final decision. This includes time to assemble your complete board package (financial documents, reference letters, personal statement), building management’s review (1-2 weeks), scheduling the board interview (2-4 weeks depending on board meeting frequency), and final approval notification (immediately to 1 week post-interview). Plan for 2-3 months from contract signing to closing for co-ops versus 4-6 weeks for condos.
What credit score do I need to buy in NYC?
Minimum requirements vary by property type and financing:
- Conventional mortgages: 620 minimum, 740+ for best rates
- FHA loans: 580 minimum for 3.5% down; 500-579 requires 10% down
- Co-op board expectations: Generally 700+ preferred; many buildings have informal 720+ expectations
- All-cash purchases: No credit score requirement, but co-op boards still review credit reports
Scores below 620 severely limit financing options and result in higher interest rates. Work on credit improvement 6-12 months before home shopping if your score is marginal.
Should I buy now or wait for rates to drop?
Don’t try to time the market perfectly—mortgage rates hovering around 6% in 2025 represent the “new normal” rather than a temporary spike. NYC home prices continue appreciating 3-4% annually despite rate environment. Here’s the key insight: you can refinance your mortgage rate later when rates drop, but you cannot negotiate a lower purchase price after buying. Focus on the right property at the right price rather than waiting for rate perfection that may never arrive.
What’s the difference between maintenance and common charges?
Maintenance (co-ops): Single monthly payment covering your share of building operating expenses, property taxes, underlying building mortgage, building staff salaries, insurance, reserves, and amenities. Your monthly maintenance includes your property tax burden—you don’t receive a separate tax bill.
Common Charges (condos): Monthly payment covering only building operating expenses, staff, insurance, reserves, and amenities. Property taxes are billed separately and directly to you by the city. When comparing co-op vs condo monthly costs, add the condo’s common charges + property taxes to get the true monthly cost equivalent to co-op maintenance.
Can I rent out my apartment after buying?
Co-ops: Heavily restricted. Most co-ops require 2-5 years of owner-occupancy before allowing any subletting, then typically limit subletting to 2-3 years out of every 5-year period. Some co-ops prohibit subletting entirely. Approval required for each sublease with board veto power. Investors should generally avoid co-ops.
Condos: Generally permitted with minimal restrictions. Most condos allow subletting with simple board notification, though some require board approval. Minimum lease terms (6-12 months) and maximum number of annual leases may apply. Foreign investors and those seeking rental income should prioritize condos over co-ops.
What happens if I get rejected by a co-op board?
Board rejections are rare (under 5% of applications) but devastating when they occur. Co-op boards have absolute authority to reject buyers without stating a reason (though they cannot discriminate based on protected classes). If rejected:
- Your contract is voided
- You receive your down payment deposit back
- You’ve wasted 6-8 weeks and thousands in attorney fees, application fees, and due diligence costs
- You start the search process over
Prevention: Work with an experienced buyer’s agent who knows building requirements. Have your agent pre-screen you against the building’s informal standards before making offers. Ensure you meet or exceed the building’s debt-to-income ratio, down payment percentage, and post-closing liquidity requirements. Strong reference letters and a polished board package significantly improve approval odds.
Is it worth using a buyer’s agent if I have to pay their commission now?
Following the August 2024 NAR settlement, buyer’s agent compensation is now explicitly negotiated rather than automatically split from the seller’s agent commission. Most NYC sellers still offer buyer’s agent compensation (2.5-3%) as part of their listing to attract buyers. Your buyer’s agent contract specifies whether you owe additional fees beyond what the seller offers.
A skilled buyer’s agent provides tremendous value:
- Access to off-market properties and pocket listings
- Neighborhood expertise and comparable sales analysis
- Board package preparation and interview coaching
- Negotiation expertise saving thousands on purchase price
- Coordination with attorneys, lenders, and inspectors
- Guidance through NYC’s complex co-op/condo landscape
Many buyers negotiate commission rebates (0.5-2% of purchase price) from their agents—ask about this upfront.
Where can I check my grant eligibility and start the HomeFirst application process?
Visit the HPD HomeFirst webpage and navigate to the HomeFirst Down Payment Assistance Program section. There you’ll find:
- Complete program requirements and income limits by borough
- List of HPD-approved housing counseling agencies in all five boroughs
- Required documentation checklist
- Links to homebuyer education courses
- Participating lender list
Contact a counseling agency in your borough directly to schedule an intake appointment. They’ll verify your preliminary eligibility, enroll you in the required homebuyer education course, and guide you through the full application process. Start this process 6-9 months before your target purchase date to accommodate waitlists and education course schedules.
Ready to Buy Smarter?
Avoiding these 10 critical first-time homebuyer mistakes positions you for successful homeownership in New York City’s competitive market. Don’t navigate this complex process alone.
Book a Buyer Launch Session with DeFalco Realty—a complimentary 30-minute strategy call covering:
- Live grant eligibility check for HomeFirst and SONYMA programs
- Pre-approval lender introduction to multiple qualified NYC lenders
- Co-op vs condo fit analysis for your specific situation
- Neighborhood recommendations matching your budget and priorities
- Customized home search strategy
Visit our contact page to schedule your session. Our average response time is under two hours.