Before Purchasing: 15 Questions To Ask About A NYC Co-Op Or Condo Building

When buying a co-op or condo in New York City, there are a number of crucial things you should ask. Others may be concerning limitations placed on you by the board or the terms of the seller. Some queries will be about the culture or vibe of the building.

Before you submit an offer, a buyer’s broker would be well-positioned to learn the answers to all of these queries, but you must know what to enquire about.

Usually, the listing will state the down payment requirements, but you don’t want to learn after the deal sheet has been issued that the board forbids dogs or won’t allow you to refinance for two years, especially if these restrictions are crucial to your offer. These are the queries that need to be addressed.

1. What is the Building’s Required Down Payment?
   The majority of NYC apartment buildings demand a down payment of at least 10% of the apartment cost. This is typical of most bank requirements in NYC, so you could already need to pay that much down if you’re getting a mortgage to buy a condo. Co-ops frequently have stricter restrictions, requiring a down payment of at least 20–25 percent.

Up to 50% of the asking price may be needed as a down payment in some especially rigorous co-ops. Post-closing liquidity, or the amount you’ll have available in the bank after you close, could be another criterion. Find out the criteria from your broker.

You must fulfill or surpass these conditions to avoid being rejected by the co-op board.

2. What is The Policy on Pets?
   Cats are more frequently permitted than dogs by management companies and co-op boards, however, some structures forbid both. The size and breed of your dog may be subject to limits under more complex guidelines. Usually, they do this because they don’t want to be held accountable if someone is hurt.

All of this translates to: Don’t assume your dog will be accepted just because you see someone else leaving the lobby with a dog.

3. Does The Flip Tax Exist?
   • Flip taxes, or more precisely transfer fees, are typically paid at the point of sale by the seller and are used to generate income for the structure. A flat fee, a percentage of the sale price, or a fee depending on share ownership are all possible. In New York, the majority of flip taxes fall between 1 and 5 percent of the sales price, with 2 or 3 percent being the most typical. An early understanding of a flip tax is important. You should be clear about expectations before sending out the contract sheet because the flip tax may come up during your talks. Depending on how competitive the market is, the burden of paying the fee may be moved from the seller to the buyer or vice versa.

4. What Fixtures and Appliances Are Included?
   • The purchase process includes early and open discussions regarding which fixtures and appliances are not included in the sale. If the contract specifies that chandeliers, sconces, and other fixtures be removed from the apartment, it raises concerns for the buyer about what else the seller could be concealing.

5. How Much Reserve Money Does The Structure Have?
   • You want to know if the building is financially sound; are monies set aside for capital renovations or accessible in case of an emergency? This information may not always be provided to you during the offer stage, but it will be provided to you prior to contract signing. During the due diligence, your attorney will be looking for this information. Asking your lender if they recently provided financing to apartment buyers in the building is one option if you are borrowing money to pay for the apartment.
6. What is The Ratio of Owner-Occupied Homes?
   • The number of sublets or non-owner occupied units in the building you intend to purchase should be kept to a minimum by lenders. Hence, this is a crucial point to remember if you’re applying for a mortgage. Co-ops frequently have limits on subletting, but over the past two years, several buildings have loosened these regulations to accommodate owners

While your attorney will investigate this as part of the due diligence, another strategy is to discover whether your lender has granted mortgages to other occupants of the building. If your lender has recently allowed acquisitions in the building, you can be more certain that this issue won’t cause you problems as you proceed, just like with the matter of the building’s reserve money.

7. Who is The Seller, and Do They Possess The Legal Right to Sell?
   • Be sure the individual identified as the seller is actually the seller and has the authorization to sell before you provide your consent. A seller may occasionally be a surviving spouse or the son or daughter of a deceased person.

If there are several owners, make sure they are all represented.

They won’t be able to sell the property if probate hasn’t been completed. And that means you can forget about all those carefully thought-out deadlines and the intended closing date since the backlog in probate courts is currently nine to twelve months, which might ruin your purchase.

8. Is a Washer/Dryer Permitted? Many people strive to have a washer and dryer in their apartment, and for good reason. Yet, there are some apartments that have a washer/dryer that has been “grandfathered” in.It is better to be aware of the laws in advance because buildings can be severe about installation requirements.

9. Are Assessments Anticipated?
   You could inquire about any maintenance or common fees because it is usually simple to learn about these prices. But you’ll also want to know if a special assessment is anticipated for a particular project. Inquiring explicitly when the most recent Local Law 11 inspection, façade work, or elevator replacement was finished.

A building with cheap monthlies could look like a steal, but if it needs a boiler replacement or a façade restoration, the low monthlies may end up costing you more than you anticipated.

10. Are There Limitations on Refinancing?
    Some co-ops require that you reside in the building for two years before you can refinance. If you intend to make an all-cash offer and later refinance, this could cause issues.

11. Are There Any Restrictions on Who Can Live in The Apartment?
    If you buy the co-op as a second home, which is permitted in some cases but want a relative to live there while you are away each winter, the proprietary lease may not allow you that flexibility. You should double-check this before making an offer.

Many apartment buildings require you to register who will live in the apartment. In a co-op and some condos, the person who will live in an apartment must submit financials and recommendation letters, as well as be interviewed.

12. What is The Renovation Policy?
    If you are purchasing a property that requires work, you will need to obtain building approval. This is an important question if you want to begin renovating immediately after closing.

Each building has different rules about how many apartments can be renovated at the same time.

13. Are New Shareholders Liable for Window Repairs?
    As a co-op buyer, you must determine who is responsible for window repair and replacement. This is stated in the bylaws or proprietary lease.

There may be a window policy that requires an incoming shareholder to repair or replace windows as needed. If the windows are in poor condition, a buyer may wish to negotiate a closing credit.

14. Who is The Building’s Manager?
    You can figure out how the building is run with some online research and visual cues. Examine the basement, laundry room, and mail room to see if they are clean—this is a sign of good management. Check for violations using open city data. Property management companies range from large corporations with streamlined operations to smaller independent firms with more nuance. A building may be self-managed in some cases.

If you have questions about whether maintenance increases are expected or assessments are scheduled, the property manager can assist you. You can also inquire about recent inspections or outstanding building violations with the property manager.

15. How Much is The Broker Commission?

This is usually a question for the sellers who pay the commission. However, it’s still a good question to ask. It is a good bargaining tool that agents use in the buying process by lowering their commission to make a deal work.