Buyer's Guide

Cooperatives and Condominiums

New York is a city comprised mainly of cooperative and condominium apartments with a smaller selection of private homes, called townhouses or brownstones. Most important is understanding the differences between the two types of apartments you will find in Manhattan.

Structure of a Cooperative (Co-op)

Cooperatives are not a new concept, although they seem to be a type of ownership that is more common in New York City than elsewhere in the United States. In New York City, 85% of our apartments available for purchase are in cooperative buildings, while 15% are in condominiums. This means two very simple things to potential buyers in New York City: There is more inventory to choose from if the buyer includes co-ops into the mix of properties, and Prices are, in general, more attractive for cooperatives - simple supply and demand. 
An apartment corporation owns cooperatives. Individual tenants do not actually own their apartments as they would in the case of real property. One owns shares in the corporation, which entitles them to a long-term proprietary lease. The corporation pays the total amount of the building’s mortgage. Importantly, a cooperative may have an underlying mortgage on the entire building, whereas a condominium must be owned outright. The corporation also pays real estate taxes, employee salaries and other expenses for the upkeep of the building. The tenant-owner, in turn, pays a share of these expenses as determined by the number of shares the tenant owns in the corporation. Share amounts are dictated by apartment size and floor level.

Considerations when Buying a Co-op

The tenant-owners have the right to approve or disapprove of any potential owner. The Board of Directors, which is elected by all of the tenant owners of the co-op, interviews all prospective owners. They have the responsibility of protecting the interests of their fellow tenant-owners by selecting well-qualified candidates. 
The quality of services and the security of the building are kept at high standards.
Portions of the monthly maintenance are tax deductible. Each building has its own tax structure, but all co-ops offer a tax advantage. Shareholders can deduct their portion of the building’s real estate taxes, as well as the interest on the building’s mortgage. 
The amount of money that may be financed is determined by each cooperative. Some buildings require substantial down payments. Generally speaking, in Manhattan prospective purchasers should be prepared to put down at least 20 to 25% of the purchase price. Importantly, this could be considerably higher in some of the more exclusive buildings. The Board of Directors of the cooperative must approve subleasing a co-op. Each corporation has its own rules, and they should be examined if a potential owner intends to sublet. 
With this in mind, it is important to remember that co-ops are the norm here in Manhattan, not the exception. However, before beginning a search for a cooperative apartment, think about the financing limitations and the application and interview process. One last item to keep in mind is the fact that the board will dictate to whom you can sell and rent your apartment. 

Structure of a Condominium (Condo)

While condominiums are quite common throughout the country, they are a rather new concept for New York City. A condominium apartment in Manhattan is real property. The buyer gets a deed just as though you were buying a house. Since this is real property, there is a separate tax lot for each apartment. Hence, this means you pay your own real estate taxes for your property. An owner will also pay common charges on a monthly basis. Common charges are similar to maintenance in a cooperative. However, they will not include real estate taxes since these are paid separately. They will also not include the building’s mortgage and interest given that a condominium, by law, cannot have an underlying mortgage.

Condominiums are Attractive for a Variety of Reasons:

Financing  the purchase of a condominium apartment is much  more flexible than in a cooperative. Generally, a buyer can finance up to 90% of the purchase price.
While there is an application process, this is not as formal as in a cooperative. The likelihood of rejection is minimal.
There is greater flexibility in sub-leasing your apartment. This makes condominiums the choice for investment property.
They are the ideal choice for non-U.S. citizens or for those with their assets held outside of the United States. This is because co- ops are unlikely to approve a buyer whose funds are not in the U.S.
Given that there are fewer condominiums than cooperatives and that they are easier to purchase, they are generally more expensive than co-ops. Additionally, monthly combined common charges and real estate taxes in a condo are typically less than a co-op's monthly maintenance charges, again resulting in higher purchase prices.    

Steps to Finding the Perfect Home: 

  1. Seek pre-approval for a mortgage - Typical time frame: same day - 2 days. You must know how much you can spend before you spend it. Condominium apartments require at least 10% down; cooperative apartments gen- erally require  at least  20%  down.  However, every building is different. 15%  of Manhattan’s buildings  are condo- minium buildings and the other 85% are cooperatives.
  2. Find an apartment - Typical time frame from home  search to closing:  60-90  days.  Offers are made orally in New York City. When you have found the right property, a bid or offer will be paced through  your agent. They will convey  your offer to either the seller’s agent or to the seller directly. The seller may counter your offer. This will begin a negotiation process that will eventually lead to a meeting of the minds. Depending on what you are looking for; the length of your search will vary. The average person sees 20-25 apartments before deciding on one. Internet-savvy buyers save time by doing their homework before their search. 
  3. Negotiate on the apartment - Typical time frame: 3 days to 2 weeks. Everything is negotiable so inquire about assessments, fixtures, window replacements, air conditioners, rugs,  floors, curtains, appliances, working fire- places, washer dryers, etc. Apartments are delivered swept clean.
  4. Sign a contract - Typical time frame: 1-3 weeks. A New York City real estate attorney is required to represent each buyer and seller in all sales transactions. Contact an attorney familiar with real estate in Manhattan to rep- resent you. The seller’s attorney draws up the contract for the buyer’s attorney; the buyer’s attorney does ‘due diligence’  reading minutes, financial statements of buildings  etc. Your real estate agent can assist you in finding experienced attorney. The buyers sign the contract and forward the contract with a 10% deposit; the sellers execute the contract. Possible contingencies: Financing, Board Approval, closing dates. (See our list of closing costs associated with buying and selling condominiums and cooperatives.) This money will be held in the sell- er’s attorney’s escrow account until closing. It is important to note that until all parties have signed the contract, and it has  been delivered, the seller can still entertain and accept other offers. The quicker  the contract can be signed, the better. A contract is binding only after both parties sign it.
  5. Apply for a mortgage - Receive Commitment Letter from Lender. Typical time frame: 6 - 9 weeks. Mortgage applications cannot be processed without an executed contract. If an apartment is being financed, the board requires a commitment letter from a lender. These letters are generally the last items to complete a board pack- age/condo application.
  6. Complete a co-op board package or condominium application - Typical time frame: 3 - 9 weeks. You will, by now have received from your real estate agent the board requirements and application materials. Cooperative apartment buildings require board approval before a closing can take place. Condominiums require an informa- tion packet to be completed before a closing can take place. In order to review a potential purchaser, the Board of Directors for a Coop demand extensive information in a Board Package. Most Boards request the following information*:
    • A financial statement signed by a CPA,
    • All requisite support of your financial statement,
    • Three  years  of tax returns, bank  statements, letters  of personal and financial reference,
    • Letters of professional reference,
    • The contract of sale,
    • Bank  documents (if financing) indicating  that your loan is in place  etc.
    • Condominiums requirements are much less invasive but you still must supply basic salary requirements and or a mortgage approval   to prove your eligibility. Board packages/Condo applications are given to potential pur- chasers to fill out after a contract has  been  executed. If there  is no financing,  it usually takes about 2-4 weeks to gather the information for the board condominium application. 
  7. Meet the co-op board for an interview - Typical time frame 30 minutes - 1 hour. This is a serious matter and not to be taken lightly. It should be treated as a business meeting. Co-op Boards typically meet once a month and some Boards do not meet  in August.  Every Board  is different, but generally  a Board  Meeting  will be held in the evening on a weeknight. Although a board interview may be granted, this does not guarantee board approval. Condos do not usually require an interview.

  8. Receive approval from board - Typical time frame: 1 day - 1 week after board interview. The managing agent will generally alert the seller’s broker whether a potential purchaser has passed the board. Condominiums your broker will inform you if your application has been approved.

  9. Schedule a closing - Typical time frame: 1-2 weeks after board approval. Managing agents generally set the date for closings, and attorney for sellers and buyers coordinate with the appropriate banks on available dates and times.



Prepare the Offer: 1 day
Negotiate the Offer & Acceptance: 2-5 days
Loan Application  & Appraisal,  Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit:  2-4 weeks
Co-op Board  Package & Interview/Condo Application:  4-6 weeks
Bank & Attorney Prep  Closing: 1-2 weeks
Final Walk Through: day of closing
Transaction Closing: 3 hours

*Submit  co-op board package or condo application for the managing agent’s review - Typical time frame: 1-4 weeks. After the buyer’s real estate agent completes the Board package, he/she will forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete. The package will then be forwarded to the Board of Director’s of the Co-op. After the Board reviews the package, they will decide if they would like to meet the potential purchaser. Condominiums the owner dictates the process if owner approves in most cases the managing agent and board follow suit.

Closing Costs

Condominiums and Townhouses

  • Application/Waiver Fee: $500 - $1,000
  • Pick-Up  Fee for Mortgage Pay-Off: $175 - $250
  • Real Estate Tax and Common Charge Adjustment: Not really a “closing cost”. Seller reimburses Purchaser for the portion of maintenance and/or Real Estate Taxes that the Seller failed to pay prior to Closing.


  • Brokerage Commission: 6% of Sales Price.
  • Seller’s Attorney’s Fee: Consult your attorney
  • Move-Out Deposit - refundable: $500- $1,000
  • Move-Out Fee - non-refundable: $250- $1,000
  • NYC Real Property Transfer  Tax: 1% of Sales  Price - $500,000 or less.  1.425% of Sales  Price - greater than $500,000.
  • Commercial / Bulk Sales Rate: If 2 or more un-attached units are sold simultaneously to the same buyer, the commercial transfer tax rate applies - 1.425% of the Sales  Price if $500,000 or less  or 2.625% of Sales  Price if greater than $500,000.
  • NYS Transfer  Tax: 0.4%  of Sales  Price
  • NYS Estimated Capital  Gains Tax: 8.97% of estimated gain - paid at closing  unless (i) Seller is a NY State resident at time of sale, or (ii) property was Seller’s primary residence for 2 out of the last 5 years, or (iii) Seller has set up a 1031 Tax- Deferred Exchange (investment property only).
  • Transfer  Tax Filing Fee: $75
  • Federal Withholding Tax (FIRPTA): 10% of Sale Price if Seller is a non-resident foreigner.
  • Title Insurance - Owner’s Policy: Approximately $4 per $1,000  of insurance (fee regulated by statute) plus various  search and recording fees totaling an additional $1,000.
  • Title Insurance - Mortgage only applies if the Purchaser is obtaining financing - variable depending on loan amount.
  • Real Estate Tax and Common Charge Adjustment: Not really a “closing cost”. Purchaser reimburses Seller for the portion of common charges and/or Real Estate Taxes that the Seller has pre-paid
  • New York State Mortgage Recording Tax: 1.80% if mortgage amount is less than $500,000. 1.925% if mortgage amount is greater than $500,000.
  • Title Closer Gratuity: $250
  • Bank Fees (only applicable if Purchaser is obtaining a loan
  • Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application fee (variable depending on lender and loan product).
  • Bank Attorney fee: $700-  $950


  • Move-In Deposit - refundable: $500- $1,000
  • Move-In Fee - non-refundable: $250- $1,000
  • Purchase Application Fee: $500- $1,000
  • Mansion Tax: 1% of Purchase Price if $1,000,000 or more
  • Purchaser’s Attorney Fee: Consult your attorney
  • New Construction
  • Sponsor Attorney’s Fee: Consult your attorney
  • Sponsor’s NYC and NYS Transfer Taxes: Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax).
  • Working Capital Fund Contribution: 1 - 2 months of Common Charges.


  • Cooperative Application Fee: $500 - $1,000
  • Judgment and Lien Search: $250 - $350
  • Recognition Agreement Fee: $150 - $250
  • Maintenance Adjustment: Not really a “closing cost”. Purchaser reimburses Seller for the portion of maintenance that the Seller for

Bank Fees (only applicable if Purchaser is obtaining a loan)

  • Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application feeVariable depending on lender and loan product
  • Bank Attorney fee: $700-  $950
  • UCC-1 Filing fee: $75- $125


  • Move-In Deposit - refundable: $500- $1,000
  • Move-In Fee (non-refundable): $250- $1,000
  • Purchase Application Fee: $500- $1,000
  • Mansion Tax: 1% of Purchase Price if $1,000,000 or more
  • Purchaser’s Attorney Fee: Consult your attorney

New Construction

  • Sponsor Attorney’s Fee: Consult your attorney
  • Sponsor’s NYC and NYS Transfer Taxes - Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax)
  • Working Capital Fund Contribution: 1 - 2 months of Maintenance