Buying a coop in NYC can be a daunting process. Not only will you have to understand the nature of co-op versus condo ownership, you’ll have to complete a lengthy board application plus pass a potentially grueling coop board interview before you can close.
We’ll explain in this primer everything you will need to know about buying a coop in NYC as well as some insider tips and tricks on how to make the best of the process.
Table of Contents
Is Buying a Coop in NYC a Good Idea?
First Steps to Buying a Coop in NYC
Finding the Perfect Coop Apartment in NYC
Making and Negotiating an Offer on a Coop Apartment in NYC
What Happens After Your Offer Is Accepted in NYC?
What Happens After Your Deal Is in Contract in NYC?
Completing the Co-op Purchase Application in NYC
Passing the Coop Board Interview in NYC
Closing Your Co-op Apartment Purchase in NYC
Is Buying a Coop in NYC a Good Idea?
Often times, buying a coop in NYC is the only way working families can afford a larger apartment when it’s time to have kids. Because coops are not considered real property, co-ops have historically sold for 10% to 40% cheaper than condos of comparable size and quality.
Unlike condominium apartment owners, co-operative apartment owners are technically shareholders of a corporation that owns the entire apartment building. Co-op apartment shareholders are given a proprietary lease that lets them reside in the apartment that they purchased. However, because they don’t technically own the apartment that they dwell in, they are not considered to have real property rights. The cooperative corporation is run by a board of directors that is elected by the shareholder base, similar to what you’d see in a regular business corporation.
Another issue to be aware of with co-ops is the fact that the board of directors enforces strict rules and regulations that touch every aspect of life within a cooperative building, from your ability to sublet the apartment to whether you can renovate your apartment before selling. Coop boards typically exercise dictatorial power versus comparable condo boards, though these days there are many stories of condo boards who think they are coop boards in terms of power overreach.
This unique form of living in New York City is confusing and not attractive to most foreign buyers and investors who do not want to be forced to reside in a coop once they purchase and want to be able to rent out or sublease an apartment when they please. As a result of this reduced investor and foreign demand, combined with the fact that co-ops have historically made up three quarters of the apartment housing stock, buying a coop has always been more affordable for local New Yorkers than buying a condo or buying a house in NYC.
In summary, buying a coop in NYC is a good idea if you have a limited budget and need more space. For most working New York families who do not want to deal with hour long commutes by moving out of the city, buying a coop is a very attractive alternative primarily because of the reduced cost of co ops vs condos.
The very first thing you should do before you begin your apartment search in earnest to do thorough research on everything related to buying an apartment in NYC. That means thoroughly understanding what closing costs in NYC are so you know if you have enough liquid assets to close plus satisfy a co-op’s post-closing financial requirements. You should also get a thorough understanding of all the NYC real estate taxes you’ll face when buying, owning and selling an apartment in New York City.
Furthermore, you should learn what the most common first time home buyer mistakes are in NYC so you can learn from the experience of others who came before. You should also study apartment viewing tips and good questions to ask during a showing before you schedule your first appointment.
The very first thing you should do before you begin your apartment search in earnest to do thorough research on everything related to buying an apartment in NYC. That means thoroughly understanding what closing costs in NYC are so you know if you have enough liquid assets to close plus satisfy a co-op’s post-closing financial requirements. You should also get a thorough understanding of all the NYC real estate taxes you’ll face when buying, owning and selling an apartment in New York City.
Furthermore, you should learn what the most common first time home buyer mistakes are in NYC so you can learn from the experience of others who came before. You should also study apartment viewing tips and good questions to ask during a showing before you schedule your first appointment.
Most importantly, you should research the role of buyer’s agents and how you can save money on your purchase through a buyer’s agent rebate. You should then do some research and thinking about the power of discretion and reputation when you decide to work with a buyer’s agent who is providing you with a rebate.
Just remember, a rebate won’t do you much good if the seller and listing agent will automatically find out about it. You’ll want to work with a buyer’s agent who has discreetly agreed to provide you with a rebate; furthermore, this agent should be a traditional buyer’s agent who does not normally or openly discount and has good working relationships with the wider brokerage community!
Hauseit provides complimentary introductions to the city’s finest real estate brokers who have discreetly agreed to provide you with a commission rebate. Through Hauseit, you’ll be able to work with a seasoned, brand name buyer’s broker who will not only provide you with great service and expert advice, but also a discreet commission rebate gift at close. No one will know you are getting a better deal. It’ll be our little secret!
Finding the Perfect Coop Apartment in NYC
Once you’ve committed to buying a co-op apartment in NYC, done research on the apartment buying process, and have been introduced to a veteran buyer’s broker who has agreed to discreetly provide you with a commission rebate, then it’s time for you to find the perfect apartment to call home.
Out of respect for your buyer’s broker’s time, you may consider attending open houses on your own until you get a sense of what you like and don’t like. This is especially considerate when you don’t yet have an idea of which neighborhoods you like. If you’re new to New York, then by all means stop by open houses on the weekends all over the city until you get a feel for what you’re into. Walk around the neighborhoods after the open houses to get a feel of the local vibe and whether you could see yourself living there. When you’ve gotten a better sense of which specific neighborhoods you’re into and what exactly you’re looking for, let your buyer’s agent know so he or she can start sending you some property suggestions. For example, do you need at least 3 bedrooms and 2 bathrooms? Do you need to keep it under $4,000,000? Do you need a co-op building that allows a 20% down payment or less? Do you want a doorman building or would you rather have a building with lower monthly expenses and no doorman? Do you have a dog or cat and therefore need a building that allows pets?

Once you’ve committed to buying a co-op apartment in NYC, done research on the apartment buying process, and have been introduced to a veteran buyer’s broker who has agreed to discreetly provide you with a commission rebate, then it’s time for you to find the perfect apartment to call home.
Out of respect for your buyer’s broker’s time, you may consider attending open houses on your own until you get a sense of what you like and don’t like. This is especially considerate when you don’t yet have an idea of which neighborhoods you like. If you’re new to New York, then by all means stop by open houses on the weekends all over the city until you get a feel for what you’re into.

I am buying a co op sponsor unit and am waiting for my offer to be accepted. It is on the smaller side, around $450,000. The two agents on both sides are confused as to the amount of transfer tax I’m expected to pay on behalf of the seller. One thinks it’s 1% while the other thinks it is 1.425%. I know there is a threshold at $500,000 at which point the amount of the transfer tax changes. Can you help and confirm? It’s really shocking that no one on either side knows the answer.