Buying in NYC: Terms to Know

Buying a home in New York City can feel overwhelming, due in part to all of the sale-related lingo—some of which may be brand new to you. Your real estate agent will be there to guide you through the process and can explain all of the terms that arise in the transaction, but it’s a good idea to get familiar with the basics so you’re as informed as possible. Take a look at our list of words that will likely come up during your search…

Appraisal
An appraisal is a property’s estimated market value, based on a professional appraiser’s evaluation. 

Board Package
Any buyer making an offer on a co-op must prepare an extensive package of personal details and financial information, called the board package. The board package is submitted to the co-op board, who will conduct a comprehensive review of the information provided. A buyer’s agent will help put together the package to make sure the presentation is up to par and no critical information has been left out.

Brownstone
Brownstones are townhouses made of brown sandstone that first appeared in NYC architecture in the early 19th century. Although Brownstones can be found throughout NYC, most of them are concentrated in Brooklyn, the Upper West Side, Harlem, and the Upper East Side. The color of the sandstone is due to the high level of iron within the stone, and most of the sandstone used in NYC brownstones was sourced from New Jersey quarries.

Closing Costs
Closing costs in a real estate transaction refer to the fees paid by both the seller and buyer that are separate from the cost of the property. Examples of closing costs include attorney fees, building application fees, city and state transfer tax, and broker’s commission.

Commission
In a real estate transaction, the commission is the amount of money paid to the listing agent’s brokerage. In a sale, the seller pays the commission, and then it goes to the listing agent’s brokerage who then gives a portion (generally half) to the buyer’s agent (if applicable).

Comps (Comparables)
Comps are properties that have recently sold that are similar in size, location, and condition to the property currently available for purchase or rent. Buyers and renters can use comps as leverage when making an offer, as they provide insight into whether or not a property is appropriately priced. 

Condo
A condo is a building in which individual apartment units are separately owned while common areas are jointly owned. Condos make up about 25% of Manhattan housing inventory. Condominiums typically have flexible rules allowing owners to control who rents their apartment and when. 

Condops
A condop is a building with residential units that operates as a co-op corporation, and one or more commercial units that operate as a condo.

Contingency
A contingency is something that has to be done before the sale of a property goes through. 

Convertible Unit
A convertible apartment (like a “Convertible 1” or ‘Convertible 2”) is an apartment that has an additional area that is large enough to be sectioned off and converted into an extra bedroom if preferred.

Co-op
A co-op building is owned by a corporation. Co-op owners don’t technically own property but rather shares in the corporation/building; the larger the apartment, the more shares they own. Co-ops make up about 75% of Manhattan housing inventory. Co-ops require board approval for rental applicants, making co-operative rental applications lengthier than condo or rental buildings since applicants must wait for the board to meet in order to review their applications. Owners of co-operative units must typically live in the unit for at least two years before being permitted to rent it out with board approval.

Co-op Board
A co-op board is a group of members who own apartments in the building, and the board’s job is to protect the building’s best interests. Co-op boards make decisions related to the approval process of new owners, as well as the overall management of the building. The board meets at length with all prospective owners, in what is known as the “co-op board interview.”

Down Payment
A down payment is an amount of money that the buyer puts down at closing to cover a portion of the price.

Duplex
A duplex apartment is made up of space on two separate floors of a building, connected by at least one staircase.

Escrow
In a real estate transaction, escrow refers to money being held by a neutral third party, to be used later in the transaction.

Floor-through
A floor-through apartment typically spans across the entire floor of an apartment building, although some floor-through apartments extend from the front to the rear of the building without occupying the entire floor.

Garden Apartment
A garden apartment is characterized by its location on or slightly below the ground level of a building. These apartments often have their own entrances and direct access to an outdoor patio, garden, or backyard.

Lofts
Most loft apartments are located in converted industrial buildings, although many modern new developments build their units in the likeness of lofts. True lofts have high ceilings, exposed beams and pipes, large windows, and open living spaces.

Maisonette
A maisonette is a ground or first-floor home that has its own entrance from the street and may have an additional entrance from the building lobby. Maisonettes are typically found in luxury buildings and are often multi-leveled.

Mansion Tax
Unique to New York, Mansion Tax is a 1% tax imposed on homes with a sales price of $1 million or more. Buyers pay this tax, which was introduced in 1989 when prices were far lower than they are today.

Parlor Floor
A parlor floor is the main entrance of a townhouse, located above street level at the top of the building’s front door stairs.

Post-war
Post-war buildings are buildings that were constructed after the second World War.

Pre-approval
Pre-approval comes after pre-qualification, and it carries significantly more weight. It is based on an underwriter’s assessment of a buyer’s finances—credit report, bank statements, salary, assets, etc—and shows that a lender has qualified the buyer for a specific mortgage amount.

Pre-qualification
When a buyer is pre-qualified, it means that a lender has evaluated the buyer’s mortgage qualifications and determined the loan amount that the buyer is eligible for. The important thing to know about pre-qualification is that it’s an approximation, based on what the buyer told the lender about his or her financial situation.

Pre-war
Pre-war buildings are buildings that were constructed before the second World War.

Railroad Apartment
A railroad apartment is an apartment with various rooms that typically run in a line from the front of a building to the back of a building. Each room can be entered by walking through the other rooms rather than through a hallway.

Sublet
Subletting occurs when someone who is renting an apartment or home from the owner rents out his or her space to someone else. The primary tenant’s lease would include information related to the rules around subletting. 

Townhouse
Townhouses are tall and narrow row houses that typically have between three and six stories and are connected to a neighboring townhouse or building. Many townhouses that were originally designed for one family have been converted into multi-family properties. Brownstones are a type of townhouse.

Transfer Tax
Generally paid by the seller, Transfer Tax is the tax that must be paid when a property is transferred from one party to another.

Triplex
A triplex apartment spans three floors, and each floor is joined by at least one staircase.

Walk-up
A walk-up building is a building without an elevator that has multiple floors, all of which are accessible by stairs.

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