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Are You Ready to Buy An Apartment In Manhattan?

Home To Become A First Time Buyer In Manhattan

Purchasing a Manhattan apartment is likely one of the most serious financial decisions you’ll ever make, and for first-time buyers, it can be a huge undertaking.

After all, sales prices have been climbing for years, and though the pandemic during 2020 opened the market up for more negotiations, Manhattan remains one of the most expensive real estate markets in the country.

There’s so much you need to know and prepare before you are handed the keys to your new home. Real estate taxes, attorneys, brokers, board interviews…the list goes on. Fortunately, we can help.

In this article, we’ve outlined absolutely everything you need to know before you purchase your first apartment.

Why trust us? The Gasdaska Conlon team has been selling real estate for over 20 years, and we are experts in the field. We know the ins and outs of the market, have seen it through many ups and downs, and know what it takes for a first time buyer in Manhattan to find the apartment of their dreams.

Step One: Take An Objective Look At Your Finances

Find Out Your Credit Score

Generally, you need to have a good credit score to be eligible to buy in the majority of Manhattan’s co-ops and condos. Lenders want to see a good credit score, too. Knowing your score (and the score of any co-purchasers score as well) is a great first step towards owning your own apartment in Manhattan.

Your credit score will also impact your interest rate – the lower the score, the higher the rate. If you pull your credit score and don’t like what you see, do what you can to improve it before falling in love with a property.

Get Pre-Approved

Connecting with a qualified lender and discussing your financial picture honestly can help you determine your price range. This also gives your broker some of the information they need to help determine the often even more stringent requirements NYC buildings place on buyers.

There are many different banks you can work with, but it is often beneficial to reach out to an expert broker who can recommend someone who is familiar with the unique requirements we see here in NYC.

Determine Your Debt to Income Ratio

Most banks, especially in Manhattan, will only lend up to a certain percentage of your income.

In other words, just because your monthly budget says you can afford a property doesn’t mean that the bank will agree.

Generally, you can’t spend more than 43% of your monthly gross income across all your debts. Those debts include your mortgage, carrying costs, maintenance fees, taxes, student loans, credit card debt, etc.

Source Your Downpayment and Save Up for Post-Purchase Liquidity

This is often the hardest step for first-time buyers in Manhattan (and the rest of the country for that matter). Often, it requires years of planning and saving. A good rule of thumb is to save 15% or more of your target property price for a down payment. Also, don’t forget to have extra money set aside for closing costs.

Closing costs vary by the transaction (and by property type, which we’ll outline below), but generally, you’ll need 4-5% of the purchase price on top of your down payment.

NYC Buyer Closing Costs


  • Attorney: Pricing varies
  • Building Application: $500 and up
  • Title Insurance, Title Search & Recording Fees: 0.6% of sale price and up
  • Move-in Deposit: $500 – $1,000 (usually refundable if no damage)
  • Common charges, property taxes & insurance premium: Adjustments pro-rated as of the closing
  • Mansion Tax:
    • $1M but less than $2M = 1%
    • $3M to less than $5M = 1.5%
    • $10M to less than $15M = 3.25%
    • $20M to less than $25M = 3.75%
    • $2M to less than $3M = 1.25%
    • $5M to less than $10M = 2.25%
    • $15M to less than $20M = 3.5%
    • $25M and up = 3.9%


  • Origination Costs & Points: 0 – 3% of the loan
  • Appraisal: Varies
  • Bank Attorney: $800 – $1,250
  • Mortgage Recording Tax: 1.8% for all mortgages less than $500,000; 1.925% for all mortgages of $500K or more minus $30 for townhomes
  • Real Estate Tax Escrow: 0 – 6 months, depending on lender requirements


  • NYC Real Property Transfer Tax: 1% to 1.425% of the sale price
  • NYS Transfer Tax: 0.4% of the sale price, or 0.65% of the sale price for transactions greater than $3M. Transfer taxes are added to the sale price (for tax purposes only) and then recalculated based on the bulked-up price.
  • Sponsor Attorney Fee: $2,500 – $3,500
  • Working capital fund contribution: One-time fee equal to 2 months common charges


  • Attorney: Pricing Varies
  • Building Management Agent Fee: $500 and up
  • Move-in Deposit?: $500 – $1,000 (usually refundable if no damage)
  • Judgment and Lien Search: $450
  • Financing/Recognition Agreement Fee: $250 – $500
  • Maintenance Adjustment: Pro-rated for the month of closing
  • Mansion Tax:
    • $1M but less than $2M = 1%
    • $2M to less than $3M = 1.25%
    • $3M to less than $5M = 1.5%
    • $5M to less than $10M = 2.25%
    • $10M to less than $15M = 3.25%
    • $15M to less than $20M = 3.5%
    • $20M to less than $25M = 3.75%
    • $25M and up = 3.9%


  • Origination Costs points: 0 – 3% of the loan
  • Application, Credit Check, etc: $500 and up
  • Appraisal: Varies
  • Bank Attorney: $800 – $1,250

More about Closing Costs for Buyers

On top of the down payment and closing costs, you’ll also need to maintain a certain amount of post-purchase liquidity or cash in your bank account after closing. Most co-op boards want to see that you have enough cash on hand to cover two years of mortgage and maintenance.

If someone in your life is willing to gift you a portion or all of the downpayment, that’s wonderful! Just know that you will still need to keep a healthy debt-to-income ratio and have adequate post-purchase liquidity. Also, some co-ops may not allow gifting.

Get Copies of Your Tax Returns

When you finally find the right apartment, you’ll want to make a great offer quickly – and that means being prepared. Pull the past 2 years of your tax returns to have on-hand for when you fall in love with your future home. This is often submitted to sellers to show you have the purchasing power to finance the transaction.

Step Two: Find A Broker You Can Trust

Recommendations Are Excellent But Do Your Own Research

While technically you can buy an apartment without a broker, you really shouldn’t. The real estate market here isn’t like the rest of the US – it’s complicated, intricate, and constantly changing. Going it alone might look like it will save you money on paper, but it will cost you dearly in the long-run.

Buying an apartment in Manhattan is likely the biggest financial decision of your life, and you will be giving your broker immense amounts of information about your financial situation. As a first time buyer in Manhattan, you might be tempted to go it alone to save money, but purchasing a property in Manhattan is an incredibly complex process, and you want to make sure the person you choose to work with knows what they’re talking about.

Recommendations from friends and family do go a long way, but your needs might be vastly different than your loved ones. You need to be able to completely trust them, and generally…just get along with them.

Being a first-time buyer in Manhattan is stressful enough – don’t let a less than stellar relationship with your broker make it harder.

If you are looking for a great broker or team, consider reaching out – we’d love to chat with you, no pressure and no strings attached.

Step Three: Decide Between Co-op or Condo

One of the ways Manhattan’s real estate market is different from the rest of the country is a unique property type: cooperatives.

We actually talked all about the differences between Co-ops and Condos way back in Episode 5, in case you are more of an aural learner.

While there are also townhomes and a few single-family homes (only really above 110th Street), co-ops and condos make up the vast majority of the real estate market in Manhattan. Defining what co-ops and condos are, the intricate ins and outs, characteristics, pros, and cons, etc. could be an article all by itself, but we’ll cover the basics here.


When you purchase a co-op, you are not technically purchasing the apartment you live in, but instead purchasing shares of a corporation that owns the building.  This is an arrangement unique to NYC, and something that you will want to fully understand if you intend to purchase one.

Co-ops are governed by a board of directors that determine who is allowed to live there. The boards interview potential buyers and can either approve or deny them, which means board packages (paperwork your broker will submit on your behalf) are incredibly important.

Two things to keep in mind when deciding between purchase a co-op or a condo are the ease of transfer and ease of use. With a co-op, there are certain limitations on what you can do, and how you can do it.

Ease of transfer refers to what happens if/when you want to sell the property. The buyer will have to submit a co-op board package, as well as an interview (just like you did when you bought the property). Also, there can be limitations on how future buyers can finance their purchase – sometimes gifting or co-purchasing aren’t allowed, and they cannot buy in the name of a trust, LLC, or other legal entity – only as individuals.

Ease of use refers to what you can do while you own the property. Co-ops often limit how you can use the apartment, generally with restrictions on subletting, pieds-a-terre, and more.

Co-ops are found at all price points, from affordable and practical to prestigious, but generally cost about 15-30% less than condos of similar characteristics.

All of that being said, co-ops are a huge portion of the market and it’s likely as a first-time Manhattan buyer that you will be looking at several. The lower cost means you’ll be able to get more apartment for your money, which is even more important to those that don’t have real estate equity yet, like first-time buyers.


Most first time buyers don’t purchase condos, but that doesn’t mean you can’t. Condo owners generally have more freedom in what you can do with your property – meaning if you want to rent your apartment out someday, you can.

Co-purchasing, gifting, buying in the name of a trust or LLC, and many other scenarios are allowed when purchasing a condo, but the increased ease of transfer and ease of use come at a price.

Condos are generally about 15-30% more expensive than co-ops, but you make up for the higher prices in the flexibility you are allowed.

Step Four: Figure Out Your Wants and Needs

Here’s where being a first time buyer in Manhattan isn’t so different from the rest of the country – figuring out your wants and needs.

What are the things that you really want and the things that you really need? Being clear on this can really help streamline the purchasing process – but don’t feel like you need to strictly stick to your original list. Wants and needs change over time, and it can take a few months to find your dream apartment.

It’s normal for these to change, but you still want to be clear on what is a want and what is a need, so when you find the best apartment for you, you are emotionally ready to make an offer instead of looking for the ‘perfect’ apartment.

Step Five: Determine Your Location

Manhattan is a big place.

Choosing a location or neighborhood is important to help narrow the search. A lot of this will be determined by the feel, amenities, transportation needs, nightlife, etc. that you’re looking for, and it’s one of the areas in which our team’s expertise can help you save loads of time.

We know Manhattan like the back of our hand, so if you reach out and tell us a little bit about what you’re looking for, we can help you narrow down the neighborhood you’d most likely be happy in.

If you’d like to do some research before meeting with a broker, looking into individual neighborhoods can be a great first step. We’ve recorded tons of episodes where we’ve dived deep into individual neighborhood’s culture, amenities, transportation, cultural venues, history, restaurants, bakeries, and more – check out the podcast page for more info.

Step Six: Go See Properties!

Finally – the fun part!

Work with your broker to find properties you are interested in seeing in person, and be open to their suggestions.

You should start more broad than narrow, and have an open mind. Seeing properties that are an okay fit for you as well as those that are clearly not right helps your broker get to know exactly what you’re looking for.

Also, know that everyone (especially if you are a first time buyer in Manhattan) needs to see a certain number of properties before they are ready to purchase- maybe that’s 5, and maybe that’s 50.

You likely won’t know how many you need to see until you are ready to make an offer. Just keep looking, and eventually, you will find the right apartment for you.

Step Seven: Get an Accepted Offer

Congratulations – you’ve found the apartment of your dreams and the offer has been accepted. At this point, you’ll have a solid relationship with your broker, who will guide you the rest of the way.

One thing to note is the total transaction time with properties here in Manhattan – it generally takes about 90 days from when the contract is signed to move-in day.

Whether you’re a first time buyer in Manhattan and you’ve just started saving for your first apartment, or you are ready to speak with a broker, we wish you the best in finding the right property for you. If our team can do anything to help, please let us know and don’t hesitate to reach out.