By Morrel Hirsch & Advisors, Christie’s International Real Estate Group
Buying real estate in New York City is a unique and often complex process. While the city offers an incredible range of co-ops, condos, and townhouses, financing an NYC property comes with specific challenges that buyers may not be prepared for. At Morrel Hirsch & Advisors, we’ve helped hundreds of buyers navigate the intricacies of New York real estate, and we know where the pitfalls lie.
1. Not Getting Pre-Approved Before House Hunting
The problem:
In New York City, serious offers require serious proof of funds. Without a mortgage pre-approval letter, most sellers and listing agents will not consider your offer.
How to avoid it:
Secure mortgage pre-approval with a local lender before you start your property search. This shows sellers that you’re financially qualified and ready to move forward.
2. Using a Lender Unfamiliar with NYC Co-ops
The problem:
Many lenders outside of New York are not familiar with the complexities of co-op financing. This can lead to delays, declined board packages, or denied loans.
How to avoid it:
Choose a mortgage lender experienced with co-op apartments in NYC. They will understand board requirements, debt-to-income ratios, and post-closing liquidity standards.
3. Ignoring Co-op or Condo Board Financial Requirements
The problem:
Even if your bank approves your loan, the building’s board may not. NYC co-ops and some condos impose strict financial guidelines including maximum debt-to-income ratios and cash reserves after closing.
How to avoid it:
Work with a real estate agent who can explain the building’s financial requirements upfront. Be prepared to show documentation of liquid assets and meet all board criteria.
4. Delays in Mortgage Commitment Letter
The problem:
After your offer is accepted, you’ll need to provide a formal mortgage commitment within a specific timeframe. Any delays can put your deal at risk.
How to avoid it:
Be proactive with your lender. Have your financial documents ready, respond promptly to all requests, and choose a bank known for timely processing. If you sense that you will miss your financing deadline, ask your attorney to get you a contingency extension, well before the 11th hour!
5. Low Appraisal Value
The problem:
If the property appraises below the contract price, the lender will only finance a percentage of the lower amount. You may be forced to make up the difference in cash.
How to avoid it:
Work with a knowledgeable NYC real estate agent who can guide you on pricing strategy and value. If necessary, contest the appraisal or renegotiate the purchase price.
6. Overlooking Post-Closing Liquidity Rules
The problem:
Many co-ops and some condos require buyers to show cash reserves after closing, often one to two years of mortgage and maintenance payments.
How to avoid it:
Verify the building’s post-closing liquidity requirements in advance. Make sure your assets (checking, savings, investment accounts) can be properly documented.
7. Incompatible Loan Programs
The problem:
Not all buildings are eligible for all types of loans.
How to avoid it:
Confirm that your financing program is compatible with the building you’re interested in. Your real estate agent and lender should coordinate this verification before you submit an offer.
Final Thoughts from our team:
Financing property in NYC is not just about getting a loan. It’s about understanding the unique structure of co-ops, condos, and building financials, and anticipating what boards, lenders, and sellers expect.
At Morrel Hirsch & Advisors, we’ve closed over $3 billion in real estate transactions. We know how to prepare our buyers for every step of the financing process, helping them avoid unnecessary stress and succeed in one of the world’s most competitive markets.
Have questions about financing your NYC property purchase?
We’re here to help. Contact us for lender referrals, board package guidance, or expert insight into your next purchase.
All the best,
Howard Morrel & Leslie Hirsch, Co-Founders, Trusts and Estates Division
Christie’s International Real Estate Group
About the Authors
Howard Morrel and Leslie Hirsch are co-founders of the Trusts and Estates Division at Christie’s International Real Estate Group. With over 20 years of experience in high-value real estate transactions, they specialize in guiding executors, trustees, and families through the unique complexities of estate-related property sales in New York City.