Buying a home in New York City is an exciting endeavor, but without the right knowledge and expertise, it can also be a daunting process. That’s because the city’s real estate transactions are governed by numerous laws and regulations that every homebuyer needs to understand. Regardless of whether you’re buying a home for the first time or you’re a seasoned real estate investor, understanding New York City real estate laws is important. Here, we’ll walk you through the key legal aspects of buying a home in the Big Apple so you can purchase with confidence.
Your Guide to Understanding the New York City Real Estate Purchasing Process
1. Understand the types of property available to you in New York City.
New York City real estate can include townhouses or single-family detached homes, but even more common are condominiums (condos) and co-ops. Here’s a quick description of each so you know a little more about your options.
- Townhouses: These are multi-story residential buildings that share one or more walls with adjacent properties. Townhomes are typically part of a row of similar houses and have their own dedicated entrances. Each townhouse is individually owned but some are part of a Homeowners’ Association (HOA) that manages common areas and shared amenities.
- Single-family detached homes: Residences like these are less common in the city itself but can sometimes be found in certain NYC boroughs. These homes are stand-alone units, owned individually, and don’t share walls with neighboring buildings.
- Co-ops: In a co-op, you purchase shares in a company that owns the building. In exchange, you get a lease for your own apartment. Co-ops have boards that determine who is allowed to purchase in their building. They may also have strict financial and personal requirements for potential buyers.
- Condos: Condominiums are similar to traditional home ownership. There is one significant difference, however. While you own the apartment unit itself, you share common areas with other owners in the same complex. Condos typically offer more flexibility and fewer restrictions than co-ops.
2. Work with an experienced real estate agent to find the best New York City real estate option for your needs.
Now that you know the types of New York City real estate that are available, it’s important to think about the options that make the most sense for your family and your financial situation. Then, it’s time to find and work with an experienced real estate agent who is well-versed in NYC real estate laws and offerings. They can help you find the best property to meet your unique needs and budget requirements.
3. Hire a real estate attorney for legal representation in any New York City real estate transaction.
Many first-time homebuyers in the Big Apple don’t realize that New York City real estate transactions require the involvement of a real estate attorney. While this may seem like an unnecessary expense, it can make the entire process more efficient and enjoyable.
An experienced real estate attorney will:
- Review, help you understand, and negotiate the contract for purchasing your home.
- Conduct due diligence on the property you wish to purchase. For co-ops, this might also include a review of the building’s financial statements and board meeting minutes.
- Ensure there are no legal issues that could have a negative impact on the purchase. These include things like liens or disputes that may influence the efficiency or even viability of your transaction.
- Prepare and organize purchase documents, assist in the closing process, and ensure a smooth transaction.
4. Understand the purchase process.
Once you find a suitable property, the next steps include:
- Submitting your offer: Your real estate agent will help you submit a formal offer for the property you wish to purchase. Be prepared to negotiate the price and understand that the first offer is not always accepted.
- Signing the contract: Once you have an accepted offer, it’s time for your real estate attorney to step in to review and negotiate the contract. This is also the time when you will make a deposit on the property. The actual deposit amount varies by situation but typically ranges between 0% and 20% of the purchase price.
If you’re buying a co-op, you will also need to be approved by the board that controls the building. This typically includes filling out a complete application package and going through an interview process.
5. Finance your purchase, if needed.
If you are not paying cash for your property, most purchase contracts include a mortgage contingency clause. This protects you and allows you to get your deposit back if mortgage financing falls through.
Closing costs for New York City real estate transactions can be significant and may include attorney fees (for your own real estate attorney as well as the seller’s attorney, title insurance, and recording fees, among others.
6. Pay attention to New York City real estate laws and regulations.
Ensure the property has a valid Certificate of Occupancy (CO). If you plan to make significant renovations, you may need to update the CO, which can be a complex process.
It’s also important to fully understand how the property is currently zoned. Zoning laws dictate how properties in different areas of the city can be used. Understanding the zoning regulations for your property can impact your renovation plans and potential future development.
7. Follow these final steps before and after closing.
Before closing, a final walk-through of the property is essential. This will help you confirm that everything is in order and in the agreed-upon condition. On closing day, your real estate attorney will assist you in signing the final documents, paying closing costs, and transferring ownership.
After closing, remember to:
- Transfer any utilities and services to your name.
- Review building rules and regulations (for condos and co-ops).
- Ensure that all necessary renovations you do comply with existing building and zoning codes.
Complete New York City Real Estate Transactions with Ease: Hire a Real Estate Attorney at Laird Law
As you can see, purchasing New York City real estate involves a significant amount of thought, preparation, and expertise. Make the process simple with the assistance of a real estate attorney at Laird Law.
Contact us today to learn more about how we can help you purchase your dream home with confidence. Our real estate attorney can assist with residential and commercial contracts of sale, co-op and condo transactions, deed conveyances and more.
