How to Make an Offer for a Home in NYC

Photo by Denys Nevozhai on Unsplash

By Colin O'Leary

Buying a home in New York City is a fast-paced and competitive process. If a property is priced well, it sells quickly. To ensure you’re ready to make a strong offer when you find the right condo or co-op, you need to be prepared from the start. Here’s a guide on how to make an offer in NYC and the essential documents you’ll need.

Be Prepared from the Start

Many buyers start their home search casually, only to fall in love with a property and then scramble to gather the necessary documents to make an offer. To avoid this, it's important to have everything ready from the beginning. Understanding the asking price and market value will help you make a fair and competitive offer.

Key Documents and Steps for Making an Offer in NYC

1. REBNY Financial Statement

The REBNY Financial Statement is crucial for any offer in NYC. This document outlines your assets, liabilities, income, and overall financial picture. Preparing this statement can take some time, so it's best to start early. Home sellers often review this statement as part of their decision-making process.

2. Mortgage Pre-Approval, Pre-Qualification Letter, or Proof of Funds

Having a mortgage pre-approval or pre-qualification letter is essential before you start your property search. It shows sellers that you are a serious and capable buyer. If you're planning to pay in cash, a proof of funds document will suffice. This ensures that you won’t be delayed waiting for bank approval while other buyers are making offers.

3. Real Estate Attorney

An experienced real estate attorney can make the home buying process much smoother. Most attorneys charge a flat fee, payable only if the deal is completed, so don’t hesitate to ask questions. If you don’t have an attorney, your real estate agent can recommend one.

4. Estimated Closing Costs

NYC closing costs can be substantial and often catch buyers off guard. Discuss these costs with your attorney or agent to get an accurate estimate. The NYC mortgage recording tax is a significant portion of these costs, especially for condo purchases.

5. Contract Deposit & Down Payment

In NYC, you typically need to put down at least 20% of the purchase price, with an initial contract deposit of 10% when signing the contract. Some buildings and mortgage companies may accept less, but higher down payments are generally seen as stronger offers.

6. Post-Close Liquidity (Co-Ops Only)

Co-op boards often require buyers to have at least two years’ worth of maintenance and mortgage payments in post-close liquidity. It’s also wise to estimate your debt-to-income ratio. For co-ops, a ratio under 30% is preferred, with some more stringent boards requiring 25% or lower.

Consult Professionals

Real Estate Agent

A knowledgeable real estate agent can help you determine the value of a home, navigate negotiations, and understand the market dynamics. Their expertise is invaluable in making a competitive offer.

Mortgage Lender

Working with a mortgage lender early in the process ensures you understand the down payment requirements and have your financing in order. This distinction is crucial to differentiate the down payment from the contract deposit.

Conclusion

The New York City real estate market is highly competitive. By being well-prepared and educated about the process, you increase your chances of successfully purchasing your dream home. Start gathering your documents and consulting with professionals early to make a strong and compelling offer when the right property comes along.

If you have any questions about the NYC home buying process, please contact our team leader Colin O'Leary at 646-300-2012.