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Condo
A condominium, or condo, is a form of property ownership where each unit is individually owned and comes with its own deed and tax bill. Owners have full ownership but are subject to the condo board's governing documents, which outline rules and regulations. Condo owners also share the building's operational costs and management fees with other residents, which are collected through monthly charges. -
Co-op
When purchasing a co-op, you don't own your specific apartment. Instead, you own shares in a co-op corporation that owns the building, granting you the right to a proprietary lease for your unit. The number of shares you own typically corresponds to the size of your apartment. Co-ops are generally more affordable than condos but involve a rigorous approval process. They also usually prohibit investors. Co-op owners pay monthly maintenance fees that cover utilities, insurance, and staff salaries. -
Condop
A condop is a hybrid property, blending elements of a condo and a co-op. Typically, a condop exists within a condo building where the lower commercial spaces operate under condo rules, while the residential units are organized as a co-op. Residents of the condop own shares in the co-op and must follow both co-op and condo regulations. Like co-ops, condops also require residents to pay monthly maintenance fees, which include taxes. -
Co-op Board
A co-op board is a volunteer group of co-op shareholders, elected by their peers, that oversees various aspects of the building, including sales, purchases, and setting building rules. While condos also have boards, they may operate differently and possess varying levels of authority. -
Maintenance Fees
These are monthly operating costs that co-op owners are required to pay. These fees typically cover expenses such as taxes, insurance, mortgage payments, staff salaries, gas, heat, and hot water. -
Common Charges
Equivalent to maintenance fees for a co-op, these are monthly charges that condo owners pay to cover building operating costs. Unlike maintenance fees, common charges do not include real estate taxes. -
Land Lease
Refers to a building where the land it sits on is leased for long terms, typically 50 to 99 years. Unit owners in these buildings pay a land rent, which is often included in their maintenance fees, and the amount is usually determined by the number of shares associated with each unit. -
Sponsor Unit
A sponsor unit is an apartment sold directly by the building’s owner or developer. These units often require renovation due to long-term tenant occupancy. Buyers of sponsor units typically can bypass the co-op board interview process. -
Prewar
A prewar building or apartment refers to one built before World War II. These properties are highly sought after for their distinctive features, such as high ceilings, spacious layouts, original hardwood floors, large foyers, and crown moldings. -
Pied-à-Terre
A pied-à-terre is a secondary or non-primary residence. Co-op buildings often have stringent rules regarding the use of pied-à-terre units. -
Pre-Qualification
Pre-qualification is an informal estimate provided by a mortgage professional, assessing a buyer's ability to secure financing based on self-reported financial information. The professional may issue a pre-qualification letter, which can be presented to sellers or agents. -
Pre-Approval
Pre-approval is a formal evaluation by a mortgage broker to determine if a prospective buyer can qualify for a mortgage of a specific amount. This process involves detailed paperwork, including tax returns, pay stubs, bank statements, and an official credit report. The broker also reviews details of the potential property or similar ones. -
Cash
A cash offer or deal is a property purchase made outright without the need for a mortgage. The buyer pays the full price upfront, without financing. -
Financing
Financing refers to the portion of the purchase price that can be covered by a mortgage or share loan, with the remainder being paid as a down payment. For example, if a co-op allows 70% financing, the buyer must provide the remaining 30% as a down payment. -
Financial Statement
A financial statement is a formal document detailing all of an individual’s financial assets, debts, and liabilities. -
Debt-to-Income Ratio (DTI)
The debt-to-income ratio is the percentage of a buyer’s gross income that goes toward paying debt. Both co-ops and condos typically have requirements for this ratio, often set between 25% and 29%. -
Appraisal
An appraisal is an evaluation of a property’s market value, commonly required during the mortgage approval process. -
Lien Search
A lien search is a background check conducted on a property and its seller to ensure there are no outstanding debts or legal claims. -
In Contract
A property is considered "in contract" when both the buyer and seller have fully executed a contract and the buyer's deposit has been received by the seller's attorney. An accepted offer does not mean the property is in contract. -
Contract Deposit
Also known as "earnest money," a contract deposit is a percentage of the purchase price paid by the buyer when signing the contract. It serves as a commitment to uphold the contract terms and is usually non-refundable if the buyer backs out. This deposit often forms part of the down payment. -
Final Walkthrough
A final walkthrough is the last inspection of the property by the buyer, conducted a few days before closing. It ensures the property’s condition matches the terms agreed upon in the contract. -
Contract of Sale
The contract of sale is the legal document between the buyer and seller that outlines the terms of the property purchase. -
Closing Costs
These are additional taxes and fees that both the buyer and seller must pay at the closing of a home sale. Closing costs are categorized into bank-related costs, such as mortgage taxes and bank fees, and title-related costs, like transfer taxes and title insurance. -
Mansion Tax
The mansion tax is a tax applied to any residential property in NYC purchased for $1 million or more, with rates ranging from 1% to 3.9%. -
Flip Tax
A flip tax is not an actual tax but rather a transfer fee charged by a co-op when a unit is sold. It is typically paid by the seller, although sometimes the buyer or both parties share the cost, depending on the negotiation. -
Power of Attorney (POA)
A power of attorney is a legal document that grants a representative, such as a real estate agent, attorney, friend, relative, or business partner, the authority to close a transaction on the buyer’s behalf.
