Thinking about buying an apartment? Before jumping into the process of choosing a real estate agent, browsing listings, and scheduling tours, it’s important to get your finances in order. Taking this step early on will help you present a stronger mortgage application and give you a clearer understanding of your financial position—before you fall in love with a specific property.

​​​

Before You Start: How Much Can You Afford?​

​

Before you begin your home search, it is important to understand what you can comfortably afford. Buying a home involves more than just the monthly mortgage payment. You should also plan for one-time costs such as the down payment, closing costs, legal fees, inspections, moving expenses, and, depending on the property, post-closing reserves.

​​

As you determine your budget, consider the following:

​

Your Spending Patterns

Review your bank statements and monthly expenses from the past several months. Look closely at recurring bills, subscriptions, dining, travel, and discretionary spending to understand what monthly payment feels realistic for your lifestyle.
​

Housing Expenses / Income

A common guideline is to keep your monthly housing expenses at a manageable percentage of your income, but the right number depends on your overall financial picture, long term goals, and comfort level.
 

Debt / Income

Lenders will look closely at your debt-to-income ratio, which includes obligations such as car payments, student loans, and credit card balances. If you are buying in a co-op, financial standards are often stricter. Many co-ops prefer a debt-to-income ratio of 25% or below, although this varies from building to building. In some cases, a ratio above 30% may still be acceptable, particularly in smaller co-ops.

​

Tip: A larger down payment reduces the amount you need to borrow, which can lower both your monthly payments and the total interest paid over time. If you put down 20% or more, you can usually avoid mortgage insurance. At the same time, you should not use all of your available funds for the purchase. Lenders, and especially co-op boards, want to see that you still have reserves after closing. Many co-ops require 24 months of post-closing liquidity, which generally means you should have enough funds remaining after your down payment and closing costs to cover 24 months of mortgage and maintenance payments. Some buildings may require only 12 months, and smaller co-ops are often more flexible. In addition to your down payment, you should also budget for closing costs, moving expenses, possible renovations, and unexpected costs. As a rough estimate, closing costs for a co-op are often around 1.5% of the purchase price, while closing costs for a condo or house are often around 3.5% or more, depending on financing, taxes, and other transaction costs.

​

Assess Your Credit Score

Your credit score is one of the key factors lenders use to evaluate your mortgage application. Scores generally range from 300 to 850, with higher scores typically leading to better mortgage rates and loan terms. In general, borrowers with credit scores in the mid to high 700s or above are more likely to qualify for the most favorable rates.

 

If your credit score needs improvement, focus on paying down high credit card balances and correcting any reporting errors that may be affecting your profile. Improvements do not always happen immediately, but even a modest increase in your score can make a meaningful difference in your financing options and overall borrowing costs.

​

Step 1: Build Your Team (R.E. Agent, Lender, Attorney)​​​

​

I highly recommend building your team in the order suggested below. Real estate agents are in constant contact with both lenders and attorneys. Since they have separate communication channels—client–lender–agent and client–attorney–agent—they’re in a unique position to observe, network, and recommend the most suitable lenders and attorneys. This can greatly improve your chances of having a smooth, successful transaction.

​

1.1 Choose a Real Estate Agent​

A real estate agent is a valuable resource for anyone buying a home. They act as expert guides and provide objective information and opinions to help you find the right home that meets your needs and budget. They have access to the full range of available listings and can help you negotiate the best deal. A good real estate agent can help you stay objective and make informed decisions throughout the process.

​

Who pays the buyer’s broker fee?

Many buyers have questions about this. In Manhattan, based on data we collected from 131 new Compass listings in December 2024, the vast majority of sellers were offering compensation to the buyer’s broker, which means buyers often do not pay an additional fee out of pocket. If a property is structured differently and a direct buyer fee may apply, I believe that should be disclosed before any showing so there are no surprises.

Working with a buyer’s agent gives you professional representation, strategic guidance, and someone focused solely on protecting your interests throughout the process. See what Dave Ramsey, a well-known American financial expert and radio personality with 20 million weekly listeners who helps people build wealth and improve their finances, says about working with an agent:

“Whether you’re buying or selling a house, you’re dealing with a lot of cash. But here’s the thing—just one mistake during the home-buying or home-selling process can cost you tens of thousands of dollars. So, it’s no wonder why 88% of all buyers and 91% of sellers decide it’s worth working with a real estate professional. Because when you have a solid pro on your side, they’ll take care of the nitty-gritty details."

​

1.2 Choose a Lender​

If you are financing your purchase, it is important to speak with a mortgage broker or lender early. A good lender helps you understand your budget, strengthen your offer, and move more efficiently once you find the right property. I am always happy to recommend trusted mortgage professionals, but you should choose the one who best fits your needs.

​​

1.3 Choose an Attorney​

Since New York is an attorney state, buyers are required to hire a real estate attorney to review and negotiate the contract of sale and represent them at closing.

Your attorney plays a key role in making sure the transaction runs smoothly. They’ll handle important responsibilities such as:

 

• Conducting due diligence

• Ordering a title report (checking for liens, violations)

• Reviewing the contract

• Providing documents required by your mortgage lender

• Determining the payment due at closing

• Representing you at the closing

I’d be happy to recommend trusted attorneys to assist with your closing. However, feel free to explore your options and choose someone who best understands your needs.

​​

Ready, set, go!

​

Step 2: Pre-Financing

​​

Before an offer is submitted, listing agents will typically ask for three items:

 

1. A pre-approval letter

2. Proof of funds showing you have enough for the down payment, closing costs, and, if applicable, required post-closing liquidity for a co-op purchase

3. A completed REBNY Financial Statement

 

In some cases, the listing agent may request only proof of funds or only the REBNY Financial Statement, but it is best to have all three prepared in advance.

​​​​​​

2.1 Get Pre-Approved for a Mortgage

A pre-approval letter is one of the first documents sellers will want to see when you submit an offer. Issued by a lender, it estimates how much you are qualified to borrow and helps establish your budget. More importantly, it shows sellers that you are financially prepared to move forward.

 

Pre-approval is different from pre-qualification. Pre-qualification is usually a rough estimate based on limited or unverified information, while pre-approval generally involves a more detailed review of your finances. Many lenders require documents such as pay stubs, bank statements, and tax returns, although some use the term more loosely. Be sure to ask your lender what their process includes so you can understand how strong your pre-approval will appear to sellers.​​

​​​

2.2 Secure the Funds (Down Payment, Closing Costs, Post-Closing Liquidity)

In addition to a pre-approval letter, you will need proof of funds when making an offer. This means showing that you have enough available for your down payment, closing costs, and, in the case of many co-ops, any required post-closing liquidity.

 

If you need to move funds between accounts, do so early so your financial picture is clear when it is time to submit an offer. If any portion of the funds will be gifted by a parent, spouse, or another party, that should be disclosed upfront. In some cases, the seller may request proof of funds from the person providing the gift. If you are buying in a co-op, also confirm whether gifting, parents buying for children, or co-purchasing is permitted, since each building may have its own rules.

​

2.3 Fill Out the REBNY Financial Statement

The REBNY Financial Statement is a standard form used throughout New York City real estate to present your overall financial profile. It outlines your assets, liabilities, income, and expenses, helping sellers assess your financial strength and ability to close. This form is especially important in co-op transactions, where financial review is often more detailed. Completing it carefully and accurately can affect how seriously your offer is taken. You will typically need supporting documents such as bank statements, investment account summaries, and loan information. A complete and well-prepared REBNY Financial Statement helps show that you are organized, transparent, and financially qualified.

​

Step 3: Find Your Home

​​

3.1 Select the Neighborhood

To pick the right neighborhood for you, consider factors like affordability, the location of your work and schools in case you have children, and what your real estate agent suggests based on your needs. Explore the neighborhoods you’re interested in by visiting shops, restaurants, and public spaces. You can also use online tools and quizzes to help determine the best fit for your needs.

​​

3.2 Shop Around

Review the listings your real estate agent shares based on your criteria, and feel free to browse on your own to get a better sense of the market. As your search becomes more focused, eliminate neighborhoods and properties that do not match your priorities, budget, or lifestyle. Your agent should also track price changes, time on market, and listing history to help you identify which homes are fairly priced, overpriced, or potentially negotiable.

​​

3.3 Tour Apartments

Let your real estate agent know which apartments you’d like to tour so they can schedule the appointments. Touring in person is crucial—it gives you a true sense of the space, layout, and natural light that photos or videos simply can’t capture. During showings, take your time to look closely at the details: open closets and cabinets, pull back curtains, walk through outdoor areas, and ask questions about the building’s rules, utilities, maintenance, and any recent upgrades or renovations. It’s strongly recommended to schedule a second showing for any apartment you’re seriously considering making an offer on. This second visit serves as a pre-inspection opportunity. Take the time to look inside cabinets, check under the sinks, test the water pressure, ensure the air conditioning works properly, and look carefully for signs of leaks or water damage on ceilings or walls. Catching these details early can help you make a more confident, informed decision before proceeding with your offer.

​​

Step 4: Make an Offer & Sign the Contract​

​

Finally, after carefully considering the pros and cons of the properties you’ve toured, you think you’ve found your ideal home and are ready to move forward.

​​​

4.1 Evaluate the Market

To determine a fair offer, your real estate agent will provide comparable sales, or “comps,” showing similar homes that have recently sold in the area. Your agent will also help you develop an offer strategy based on market conditions, the property’s value, and the potential room for negotiation. Having your own real estate agent also helps avoid the conflict of interest that can arise when the seller’s agent represents both sides. For example, the seller’s agent likely helped price the apartment and may naturally defend that pricing, even if the home was intentionally listed high. A buyer’s agent gives you an independent perspective and can help you recognize when a property may be overpriced.

​

4.2 Submit a Formal Offer

The formal offer should include the terms and conditions of the purchase, including payment information and any contingencies (if they haven’t been waived).

​

One detail many buyers overlook is that the presentation of an offer can matter almost as much as the price itself. Two buyers may submit similar offers, but the one with a cleaner and more complete package often appears more serious and more likely to close. A well-prepared offer that includes the terms, attorney information, pre-approval letter, proof of funds, and REBNY Financial Statement can give you a real advantage, even against a slightly higher offer that is poorly presented.

​

Tip: Be Ready For a Bidding War

In a highly competitive market, where desirable homes are in high demand, you may have to be ready for a bidding war. While the highest offer is often the winner, making a solid first offer can give you an advantage.

​​

To make your offer stand out to the seller:

• Increase your down payment

• Be flexible about the closing date

• Be willing to waive contingencies
   

Tip: Avoid Emotional Attachment

This stage can be one of the most challenging parts of the buying process. Be prepared for setbacks—counteroffers and rejections are common. Even if a seller accepts your offer, they can still consider and accept others. In New York, an accepted offer is not legally binding until both parties have fully executed the contract. Until that happens, the seller can still consider other offers. Even after that, issues can arise—for example, if you’re buying a co-op, the board can still reject the sale.

​

4.3 Negotiations

Remember that making an offer on a home is the beginning of a negotiation process. You want to pay as little as possible while still securing the home, while the seller wants to get the highest possible price. The right starting offer depends on market conditions, the property’s pricing, and the level of competition. You will face multiple bidders in a competitive market, whereas you will have more bargaining power in a soft market. When making your first offer, keep your budget in mind and limit how much you are willing to pay. Your real estate agent should guide you through this process, help you understand the market, and advise you on the most effective strategy.​

​​​​​​​​​

4.4 Review the Contract

Once you’ve agreed on the price, concessions, and closing timeline, your real estate agent and the seller’s agent will put together a “Deal Sheet” outlining the details of the transaction. This is then shared with the seller’s attorney, who will use it to draft the contract and send it to your attorney. Your attorney will review the contract, building financials, board minutes, and any contingencies—negotiating revisions if needed. It’s crucial to have a responsive real estate attorney who has time for you and is focused on protecting your interests.

​​

4.5 Conduct a Home Inspection

While your attorney is reviewing the contract, it’s time to have the apartment inspected before signing. A home inspection helps identify potential issues that could affect your decision to move forward—or give you leverage to negotiate repairs or credits. Inspections usually take one to three hours, depending on the property type and size. For condos and co-ops, the cost typically ranges between $500 and $800. If the inspection uncovers major issues, you can ask the seller to address them before closing or request a credit so you can handle the repairs yourself. Once both parties agree, these items can be included in the contract, usually as a rider. This ensures that any necessary work is documented and legally acknowledged.

 

It’s important to note that inspection reports are extremely detailed—they’ll point out even the smallest imperfections, such as worn hardwood floors, rusty fixtures with no leaks, or minor cosmetic flaws. In New York City, most apartments are sold “as is,” which means the property is being sold in its current condition, with no obligation on the seller’s part to make cosmetic or non-structural repairs unless otherwise stated. However, not every issue falls under “as is.” If the inspection reveals leaks, mold, cracked pipes, electrical issues, or even smaller but functional concerns like a broken doorbell or malfunctioning air conditioning, these are valid points for negotiation. Your real estate agent will help you understand which findings are reasonable to request repairs or credits for, and which are considered part of the property’s condition. A thorough inspection can help you protect your investment, avoid unpleasant surprises, and enter the contract with confidence—knowing exactly what you’re buying.​​

​​

4.6 Sign the Contract and Put the Deposit Down

You will sign the contract and wire the contract deposit to the seller’s attorney’s escrow account.​​

​

4.7 Title Search and Lien Search

Your attorney will order a title search right after you sign the contract. A title search includes examining public records to determine and confirm a property’s legal ownership. Title searches are conducted through many sources, including deeds (*), tax liens, land records, and court judgments, among others. A clean title is required for a real estate transaction to close. If the apartment is in a co-op building, it’s called a lien search instead of a title search, since co-ops don’t have individual titles. If a title or lien issue is discovered, it typically must be resolved before the transaction can close.

​

Step 5: Get the Loan Commitment Letter​

​

Most co-op and condo boards require a loan commitment letter before they’ll review your board package. Your letter must be “clean,” meaning all conditions—especially anything related to the building’s approval—should be cleared before submission. This is different from the “conditional” commitment letter your lender issues shortly after contract signing. While you work on securing the clean version, you can begin assembling your board application so it is ready to submit as soon as the letter is finalized.

​

5.1 Start Working on Securing the Loan

This step often takes the most time in the process. Once your contract is fully executed, you will need to work closely with your lender to obtain a formal loan commitment letter. Although you may already have pre-approval, lenders usually require additional documents before finalizing the loan.

 

They may ask for:

– Updated bank statements

– Recent pay stubs or income verification

– Employment verification (especially if there’s been a recent change)

– Letters explaining large deposits or financial gifts

– Proof that funds for the down payment and closing costs are in a U.S. account (for international buyers)

– Confirmation of any outstanding debts or liabilities

 

Respond quickly and accurately to keep your mortgage on schedule and prevent delays that could affect your closing timeline.

​

5.2 Get an Appraisal

Before your lender finalizes the loan, they’ll order an appraisal to confirm the property’s market value aligns with the amount you’re borrowing. The appraiser evaluates factors like layout, square footage, condition, and recent comparable sales. Although the lender selects the appraiser, you can request confirmation that they’re licensed and experienced in your neighborhood. If you have concerns, you can ask the lender to assign a different appraiser.

 

Appraisal fees, typically paid by the buyer, range from $400 to $1,500 depending on the property’s size and complexity.

​

Step 6: Board Application (Condos and Co-ops Only)​

​

Once you receive your loan commitment letter, the next major step is the board application and approval process. Unlike single-family or multifamily homes, condos and co-ops require buyers to meet criteria set by the building’s governing body. Understanding the process and submitting a complete, well-prepared package can help improve your chances of a smooth approval.

​​

Understanding the Purpose of the Board Application

Condos and co-ops have boards that maintain standards for who can live in the building. These governing bodies want to ensure that future residents will be financially responsible, respectful community members who contribute to the overall harmony of the property.

​

Tailoring Requirements to Your Property Type

​

• Co-op Boards: These are often the most thorough and stringent. They have significant discretion in deciding who is approved and may request interviews, additional documents, or clarifications. Approval is not guaranteed, so it’s essential to present a well-prepared, polished package.

• Condo Boards: While typically less restrictive than co-ops, condo boards still require documentation and sometimes personal interviews. Their primary focus tends to be on financial stability and adherence to building rules.

• Single-Family & Multifamily Homes: If you’re purchasing a single-family or multifamily home, there’s no board approval process. After the contract is signed and inspections are completed, you can proceed directly to closing.

​​

Timelines and Variations

​

• Timing: Once a complete board package is submitted, the review process often takes one to two weeks, although timing varies by building and delays can occur if additional information is requested.

• Communication: Your real estate agent will guide you through the process, helping to ensure all documents are complete and submitted promptly. Keep open lines of communication to address any board requests quickly.

 

6.1 Prepare Your Documents

Your board application (often referred to as the “board package”) typically includes:

 

• Financial Documents: Tax returns, pay stubs, bank statements, and proof of funds demonstrating your ability to meet monthly maintenance or common charges.

• Personal Information: Personal and professional references, employment history, and sometimes letters of recommendation.

• Purchase Details: A copy of the signed contract, loan commitment letter (if financing), and any other closing-related documents.

• Application Forms and Fees: Each building has its own set of forms and processing fees, so follow instructions carefully.

​

Staying Organized and Proactive

​

• Checklists: Use a checklist to track required documents, fees, and deadlines.

• Follow Instructions Exactly: Every building’s application process is unique. Carefully follow the board’s instructions to avoid delays.

• Be Responsive: If the board requests additional information, provide it as soon as possible.

​

If it’s a condo, you can usually move on once your package is approved. If it’s a co-op, the board will typically reach out to your agent to schedule an in-person or virtual interview, which is usually the final step of the approval process.

​​

6.2 The Interview (Co-ops)

As mentioned previously, in NYC, co-op boards require a personal interview. To prepare:

​​

• Be Professional: Dress appropriately, be on time, and have a polite, friendly demeanor.

• Know Your Documents: Be familiar with what you submitted and ready to clarify any details.

• Demonstrate Commitment: Show that you intend to be a responsible, long-term community member.

 

The board typically makes its final decision within a few days after the interview.​​​

​​​​​​​​

Step 7: Closing

​​​

7.1 Get Homeowners Insurance

To protect your investment, you’ll need to purchase homeowners insurance, which lenders typically require. Your lender will ask for proof of insurance before issuing a “clear to close.” Homeowners insurance helps safeguard your property against damage, theft, or liability claims. You can often save money by bundling your homeowners and auto insurance policies with the same provider.

​​

7.2 Bank Issues Clearance to Close

Once your lender has reviewed all final documents—such as the appraisal, title report, insurance proof, and updated financials—they’ll issue a “clear to close.” This is the lender’s official approval to move forward with closing, confirming that all underwriting conditions have been satisfied. Essentially, it means you’re ready to sign your loan documents and complete the purchase.

​​

7.3 Attorneys Schedule Closing

After your lender issues the clear to close, your attorney and the seller’s attorney will coordinate a closing date that works for all parties, including both agents and the title company (if applicable). The closing typically takes place at one of the attorneys’ offices, the managing agent’s office (for co-ops), or at a title company. Your attorney will confirm the final numbers with the lender and provide a breakdown of the funds you’ll need to bring to closing.

​​​

7.4 Final Walk-Through

Before closing, you’ll do a final walk-through to make sure the property is in the same condition as when you made your offer—and that all agreed-upon repairs or inclusions are in place. Try to schedule it during daylight hours so you can check everything clearly. Turn on all lights, run faucets, test appliances, flush toilets, and check for any new issues like leaks, damage, or items left behind. If anything isn’t as agreed, you can request a credit or repair adjustment at closing.

​​

7.5 Get Title Insurance

When buying a condo, townhouse, or single-family home (not a co-op), you’ll need to purchase title insurance—usually required by your lender. Title insurance protects you and your lender from any ownership disputes, liens, or legal claims that may arise after closing. The first year’s premium is typically paid upfront at the closing table. You can find reputable title insurance providers through the American Land Title Association’s database.

​​​​​​

7.6 Close the Deal

Closing day is the final step in your home-buying journey. You, the seller, and your respective representatives will sign all necessary documents to officially transfer ownership. Bring a certified or cashier’s check (or arrange a wire transfer) to cover your share of closing costs, which may include mortgage recording tax (for condos and houses), mansion tax (for homes over $1 million), transfer taxes, attorney fees, and title insurance. Once the funds are distributed and documents are signed, the deed is recorded, and you officially become the owner of your new home.​​

​​​​

7.7 Congratulate Yourself!

You’ve done it. The apartment is now yours. Take a moment to enjoy it and celebrate the beginning of this new chapter.
 

Step 8: Post-Closing

​

Before settling in, complete these essential post-closing tasks to ensure a seamless transition:

​​

8.1 Coordinate With the Building’s Managing Agent

Schedule your move-in date, confirm elevator reservation procedures, and pay any move-in or refundable deposits.

​​

8.2 Transfer Utilities

Set up electricity, gas, and internet in your name. In co-ops and condos, verify which utilities are included in your maintenance or common charges.

​​

8.3 Change Your Address

Update your address with USPS, your bank, employer, insurance companies, and subscriptions.

​​

8.4 File for Tax Abatements or Exemptions

If eligible, apply for programs such as the NYC Cooperative and Condominium Tax Abatement or the STAR exemption to reduce your property taxes. Consult your accountant.

​​

8.5 Review Warranties and Service Contracts

Keep records of any warranties for appliances, HVAC systems, or building systems included in the sale.

​​

8.6 Secure Important Documents

Store your closing documents, title policy, homeowner’s insurance, and any co-op stock certificates or proprietary leases in a safe place.

​​

8.7 Get to Know Your Building

Review house rules, board contacts, and amenity access instructions to familiarize yourself with your new community.​