20 Questions to Ask Before Buying an Apartment in NYC

Here it is, 20 questions you should ask yourself before buying an apartment in NYC. In my 20+ years helping people find their dream homes in the city, these are the most frequent ones I hear.

How much does an apartment cost in New York?

One of the best ways to gauge pricing is to refer to the Corcoran Quarterly Report where you can find the average price and the median price along with so much more information. If you want more specific information you need some focus.

New York City has approximately one million residential units and about 250 neighborhoods so it behooves you to narrow down your search to a few neighborhoods which align with your lifestyle and investment goals.

For example, in the Spring of 2023, a two bedroom condo on the upper west side averaged approximately $2,080,000 while a typical Carnegie Hill condo was priced around $2,375,00. Meanwhile if you want a relative bargain, the Murray Hill condo average asking price is $1,820,000.

What is the difference between luxury, super luxury and ultra-luxury condos in NYC?

In a nutshell it is price — but amenities, lifestyle and exclusivity add an important layer to the definition. There are condominiums on the Upper West Side, like Waterline Square, that boasts 100,000 square feet of amenities including tennis courts, basketball courts and an entire suite devoted to pets. For those seeking an active lifestyle, this is the place to be.

If you are looking for exclusive buildings along Billionaire’s Row on 57th Street offer breathtaking views, private onsite restaurants and clubs along with every service you might imagine.

Is buying an apartment in NYC a good investment?

It can be an excellent investment if you are looking to preserve capital. In the core neighborhoods, buying residential real estate is akin to buying a blue chip stock. In a neighborhood like Carnegie Hill you are buying into a piece of history with historic buildings such as the Otto Khan mansion — a part of the daily landscape.

On the Upper West side, the neighborhood is anchored by world famous institutions such as the Natural Museum of History.

The United Nations continues to be a draw for Murray Hill as buyers around the globe come to work nearby. Neighborhoods with rich history are always in demand, ultimately protecting your investment.

If you are looking for amazing returns, be prepared to venture further afield from these tried and true neighborhoods. There are riskier neighborhoods that may deliver better returns in the long run. Ask me — New York City always delivers if you have a well thought out investment plan.

Which is more important when buying an apartment in New York: location or amenities?

Location always matters, yet with the advent of the 15-minute city concept, amenities have taken on more importance for many who call NYC home. Ultimately you want to find a location offering everything we all use on a daily basis: transportation, parks, gyms, services, grocery stores, restaurants and cultural attractions.

Do you need a real estate broker to buy a property in New York City?

You are not required to have a real estate broker representing you when you purchase but it is likely to make your life easier. The entire process of buying in NYC is different than in other parts of the country and there are also more requirements which can be daunting to navigate on your own. Purchasing in Manhattan takes longer so working with an experienced agent will make the entire process less stressful.

The seller pays the broker commission and not the buyer so you might as well get all the knowledgeable help you can get. Many buyers get confused and think just because they saw a property with the listing agent they cannot call in their own agent to represent them when they decide to make an offer. That is not true. You are entitled to representation under the law.

Can all-cash buyers in New York get better prices?

Not necessarily. Approximately 50% of all deals are cash. If a seller is in a hurry to close and there are multiple offers, an all-cash deal is likely to be chosen because the deal will not be delayed by waiting for an appraiser and a bank commitment letter.

If you are purchasing in a co-op the board will expect you have approximately 12-24 months of housing payments in your account after the closing. If your purchase uses up a substantial amount of your liquidity, a seller may opt to go with the buyer who is getting a mortgage and showing a much stronger post-liquidity position.

How much does a terrace or a balcony add to the price of an NYC apartment?

Private outdoor space has certainly become more attractive to many buyers but there is no set formula for how much it adds. The amount of outdoor space is part of the equation but so is the potential usage.

For example, a small tiny Juliet balcony may have charm but if you cannot actually step out onto the balcony it is simply decoration. Conversely, an unusually large outdoor space in comparison to the indoor square footage can be unattractive for the maintenance required. If the terrace or balcony is in proportion to the indoor space, you can expect the price per square foot to be a third to a half of the indoor square footage.

What should I look for when buying an apartment in NYC?

Manhattan offers so many options for buying that you must start with your own list of priorities. What neighborhood is best for you: Upper West Side, Upper East Side, Downtown, Murray Hill? The next step will be determining your budget based on your mortgage pre-approval and then the size you need to live comfortably.

If you have a pet, make sure the building is pet friendly. One detail many buyers who are new to NYC overlook is the financial condition of the building. You will be a co-owner responsible for any future capital improvements so there is nothing wrong with asking the listing agent a general question about the financial stability of the building.

How do I find a good apartment in NYC?

There are many excellent apartments throughout the city. The goal is to find one that suits your investment objectives. Take your time to figure out exactly what you need and an appropriate budget. Working with a local real estate professional is the first step to ensuring you make a great decision when purchasing.

Is there a premium a buyer pays to buy new construction in NYC?

Yes. The closing costs on a new development are much higher. You will be asked to pay the transfer taxes and a portion of the Sponsor’s Attorney fee along with a contribution to the building fund. Every building is different and there may be additional costs on top of these customary closing costs.

Why do I need a lawyer to buy an apartment in Manhattan?

You are not obligated to have a real estate attorney represent you but the one time I saw a client attempt to represent themselves it went very badly for them. Your NYC real estate agent is only representing the business terms of the deal. The law is complex and always changing.

Your real estate attorney will not only conduct the due diligence and negotiate the legal terms of the deal but they will also be on the lookout for future potential legal issues and avert them in advance. The institutional knowledge a good real estate attorney brings to the table is invaluable.

Do I have to visit NYC to buy an apartment?

You do not. There are plenty of buyers who rely on a local agent who can FaceTime through the property. When it comes time for closing on the property, the buyer simply gives their real estate attorney Power of Attorney to close on their behalf.

What are the closing costs involved when buying an apartment in Manhattan and who pays for them?

Both the buyer and seller have closing costs. Some of the costs are taxes the state and local government collects, others are based on the buyer’s mortgage and there are costs required by the building. The calculation for each buyer and seller is different as many of these costs are based on the sale price of the property.

Can a seller back out of a contract if they get a better offer?

Not if the contract is fully executed. A seller waits to sign until the buyer has signed and the 10% deposit has been wired to the attorney’s escrow account. If the seller has another offer which they think is better they can take it before they countersign. This move represents a great deal of risk as there is no guarantee the next buyer will sign a contract. Most sellers will not take this risk of losing a qualified buyer who has completed their due diligence and is ready to commit but it does happen on rare occasions. .

What is the difference between a mortgage pre-approval and pre-qualification?

A pre-approval is more specific and the closest you can get to a mortgage commitment. The lender will collect a good amount of financial information from you before issuing the letter. A pre-qualification can be obtained much faster but a seller may require a pre-approval to consider your offer so it is best to have that lined up before you start looking at property.

What neighborhoods are most popular for pied-a-terre?

Most pied a terre buyers want either entertainment and culture or they want to be close to their office. As a result, mid-town and downtown tend to be very popular. Yet many pied a terre buyers prefer a more residential neighborhood like the Upper West Side or Carnegie Hill.

Is buying property in New York to rent out a good investment?

It can be a good investment especially if you are paying cash. You can expect a CAP rate of somewhere between 2-3%. While this may not be high compared to other national markets, your risk of not having a tenant or NYC not being desirable is much lower.

What size apartment works best for investment?

If you crunch the numbers, you typically get a better rate of return on a two bedroom.

What neighborhoods are most popular for investment?

Northern Manhattan has been very popular over the past decade because many buildings have a tax abatement. Anytime an investor can find a high quality building with low monthly costs, it is a win. Tax abated buildings can be found throughout Manhattan and worth investigating if you are an investor.

Which neighborhoods would you recommend given the price point and the fact that we are not going to use the apartment for at least 10 years?

The Corcoran Group has extensive research showing which neighborhoods had the highest rate of return over the past decade. Like any investment, past returns are no guarantee of future results but working with a local professional to help understand which neighborhoods are on the rise is always a good idea.