NEW YORK, NY – Purchasing a first home in Manhattan involves closing costs, co-op and condo board requirements, mortgage preapproval, and contract negotiations that differ significantly from most other real estate markets across the country. Manhattan real estate attorney Natalia Sishodia of Sishodia PLLC (https://sishodia.com/first-time-buyers-in-new-york/) is providing guidance on the legal and financial steps first-time buyers in New York City should understand before entering into a purchase agreement.
According to Manhattan real estate attorney Natalia Sishodia, closing costs can add tens of thousands of dollars to the purchase price, and the total varies depending on whether the buyer is purchasing a co-op, condo, or townhouse. Buyers financing a residential purchase in New York City generally pay the mortgage recording tax, which is 1.8% for homes priced under $500,000 and 1.925% for those at $500,000 or more, though co-op buyers are not subject to this tax because they are purchasing shares in a corporation rather than real property. “Many first-time buyers are surprised by the total closing costs, especially when purchasing from a sponsor where the contract may shift transfer taxes and additional fees to the buyer,” notes Sishodia.
Manhattan real estate attorney Natalia Sishodia emphasizes that most real estate contracts in New York include an “on or about” closing date, which functions as a target rather than a firm deadline. Either party may typically adjourn the closing for a reasonable period of up to 30 days. However, when buying from a sponsor or developer, the closing date may be treated as “time is of the essence,” and a buyer who is not ready to close on the specified date may be considered in default.
Attorney Sishodia advises that a mortgage preapproval does not guarantee financing. For a lender to fund the loan, the buyer must qualify financially, the building must be approved by the lender, and the property appraisal must support the purchase price at a level that allows the requested loan-to-value ratio. “Preapproval is an important step, but buyers should understand that it is not a final commitment from the lender,” she explains. “The building itself must also pass the lender’s review, which is a separate hurdle many first-time buyers do not anticipate.”
The firm notes that several government programs can help reduce upfront costs for first-time buyers in New York City. The HomeFirst Down Payment Assistance Program, administered by the Department of Housing Preservation and Development (HPD), offers qualified first-time buyers up to $100,000 in forgivable loans to cover down payments and closing costs. The State of New York Mortgage Agency (SONYMA) also offers competitive fixed-rate mortgages with low down payment requirements, and its Down Payment Assistance Loan provides a 0% second mortgage with no monthly payments that is forgiven after 10 years.
Sishodia highlights that timing a home inspection is critical for first-time buyers. Under New York Real Property Law Section 462, sellers of residential real property must deliver a Property Condition Disclosure Statement to the buyer before the buyer signs a binding contract. However, this disclosure is not a substitute for an independent professional inspection, and buyers should complete an inspection before becoming contractually bound to preserve their ability to renegotiate based on any defects discovered.
Co-op buildings in Manhattan often impose financial requirements that are stricter than what the mortgage lender requires, including minimum down payments of 20% or more, post-closing liquidity standards, and specific debt-to-income ratios. The Closing Disclosure required under the TILA-RESPA Integrated Disclosure rule must be provided at least three business days before closing, giving buyers time to review final loan terms and costs. For those purchasing a first home in New York City, working with an experienced real estate attorney may help navigate these requirements and protect the buyer’s investment.
About Sishodia PLLC:
Sishodia PLLC is a Manhattan-based boutique law firm focused on high-end residential and commercial real estate transactions, business law, estate planning, and taxation. Led by attorney Natalia Sishodia, the firm represents domestic and international clients in condo and co-op purchases, deed transfers, new developments, leasing, lending, and 1031 tax-deferred exchanges throughout New York City. For consultations, call (833) 616-4646.
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Email: natalia@sishodialaw.com
Website: https://sishodia.com/
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Company Name: Sishodia PLLC
Contact Person: Natalia A. Sishodia
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Phone: (833) 616-4646
Address:600 3rd Ave 2nd floor
City: New York
State: New York 10016
Country: United States
Website: https://sishodia.com/