What is the typical down payment for a Co-op apartment in New York City? We will
demystify this topic in the following video. I'm Nick at Hauseit, we are the
largest buyer agent commission rebate and for sale by owner company based here
in New York City established in 2014. Visit our website hauseit.com to learn
about ways to save money when you're buying and selling in New York.
The minimum down payment on a co-op apartment in New York City is typically
20%. In fact the vast majority of co-op buildings will require a minimum down
payment of 20%. This is much higher than for your typical house or condo in
particular with a house there are usually no restrictions on a minimum
amount down beyond what your lender may require. Some condominiums do require a
minimum of 10% down although these types of regulations are fairly rare. The
majority of buildings in the city that have restrictions are in fact co-op
buildings and that minimum is usually 20%. When you look at the gamut of co-ops
in New York, it's important to keep in mind that there are some buildings which
are much stricter or much more lenient than others and in fact there's really
no way to predict when looking at the outside of a co-op building what the
minimum down payment requirement will be. Most public real estate websites will
not provide this information so as a buyer the best way to get it is to have
your buyer's agent reach out and inquire with the listing agent or if you happen
to be unrepresented you can certainly reach out directly to the listing agent.
A stricter co-op in New York City can require anywhere up to 50 - 75 % down and
in some cases the building might require literally an all-cash purchase. Again
there's no way to predict what a building will require you can tend to
generalize sometimes if you're looking at a building on say Fifth Avenue for
example on the Upper East Side a lot of these more established coops are very
strict and not only will they have fairly high minimum percentage downs
they'll also have other extremely stringent requirements for buyers
such as hefty post-closing liquidity requirements
and very low debt to income ratio requirements. In particular, some
buildings are so strict with post-closing liquidity that they can
require purchasers to have up to two times of the purchase price in liquid
assets and cash after closing so what this means is if you're buying a two
million dollar apartment the cooperative board will not approve your application
unless they see that you will have four million dollars in the bank left over
after you've paid for your apartment and also after you've taken into
consideration the closing costs on your purchase. The good news about co-ops is
that all of these buyer financial requirements actually do help the
financial integrity of the building overall. If you think about it pretty
much everybody in a co-op has been heavily vetted as far as the financials
are concerned. So the risk of having one or multiple owners being delinquent on
their common charges or rather their maintenance in the case of a co-op is
fairly low. Condominiums on the other hand cannot simply reject buyers for not
having amazing financials. A condo can really only reject a buyer if the condo
uses its own money to purchase the apartment at the same price that the
prospective purchaser was gonna pay. Realistically though the risk of having
tons of unpaid common charges in a condo in New York City is fairly low the
reason being is that property prices are really high and in order to be approved
by a lender even at a higher debt to income ratio that lenders underwrite to
which is low 40% it still is pretty much going to be the case that most buyers
are very qualified. So you can make the argument that coops financial vetting
process is completely unnecessary and excessive but the main benefit aside
from just having greater security with the building's financials is the fact
that coops are just way less expensive. The comparable condo could be 40% more
money than a co-op that's exactly the same size coops also have lower buyer
closing costs so there are a lot of benefits to coops despite the fact that
you have to put down more money and the fact that there is a pretty rigorous
co-op board application process we hope you found this video helpful if you have
more questions about buying co-ops in New York we have a ton of
insight on our website it's dedicated articles and videos to talk about things
like debt to income ratio requirements, post-closing liquidity, the coop closing
timeline etc. So visit our website HAUSEIT.COM we hope to see you on the next one