Purchasing a property in New York is a serious decision — and not the easiest of tasks, especially if you are doing it in a foreign country and a city as large and expensive.
New York is the largest city in the United States and one of the least expensive cities in the world regarding real estate. Moreover, at $1,600 per square foot, Manhattan is the second most expensive area in the United States after San Francisco. Before going ahead with the purchase, it is essential to invest some time in real estate market research. Knowing the related procedures and being aware of the difficulties you may encounter may be of incredible help throughout your purchasing process.
What is the real estate market like in New York?
In 2023, the average price per square foot in New York was $654 per square foot. However, the pricing varies a lot depending on the neighborhood — as mentioned above, the per-square-foot price in Manhattan is twice as much, if not exceeding that.
In addition to the purchase price, there are several other fees involved in buying a property in New York. These include closing costs, which averaged $8,256 for a home loan of $352,314 according to figures from 2021, and potentially ongoing fees such as interest, private mortgage insurance, and Homeowners' Association fees. The transfer of property fees in NYC typically ranges from 1.5% to 6% for buyers and 8% to 10% for sellers.
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Lawyers in New York can charge up to 2,500 USD for such transactions (however, this is at the high end of the spectrum, and you will find a range of fees). Despite the considerable prices involved in buying a property, it is worth noting that the real estate market in New York is one of the most secure in the world. Moreover, it is one of the best ways to invest your money, especially if you intend to rent your apartment, house, or studio.
Types of property in New York
To find the one property you have always dreamt of, it is best to go through an established real estate agency. There are hundreds, probably thousands of them in the city, but the most famous ones are Corcoran Group, Welcome Home Real Estate, and Compass, amongst others. There are several types of properties you can find in New York, but the two most common are condominiums or co-ops.
Condos are very similar to co-owned properties that you can also find in Europe. They operate according to the same principles: once you own a condo, you automatically become the owner of commonly held parts of the property. The buying process tends to be quite simple, except for the fact that prices for condos tend to be 10% higher than co-ops.
Co-ops account for almost 75% of the real estate market in New York but involve more procedural constraints. To receive an ownership title, you must present yourself to the administrative council of the cooperative society, whose role is to review your application. They may or may not accept it and may also require you to stay in the apartment for a few years before you finally get the approval to let your property.
Administrative procedures in New York
Once you have set your eyes on the property of your dreams, the first step is to make a purchase offer. Just like in many European countries, you can negotiate the price with the owner. Your designated lawyer will come into play once both parties have agreed on an amount, as they will be requested to review the sale contract before you sign it. The next step will be to make a 10% deposit.
Depending on the type of property you have chosen, you will require the approval of the condo or the co-op (see above). In both cases, you may be asked to submit documents like bank statements or tax returns. For co-ops, it is necessary to produce reference letters. Once your application has been approved, you may close the deal in the presence of your lawyer. Once the latter has finalized the payment as per the given deadline, you will officially become the owner of your new home!
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