Real Estate Terms Every NYC Home Buyer Should Know

You don’t need to memorize a glossary to buy an apartment. You do not need to nod along when your attorney says “the deal sheet is out” or the listing says “TCO.” Here’s what the words mean, in the order our buying process guide walks through them.

People and roles

Everyone in the room has a title, and only some of them work for you.

• Buyer’s agent (buyer’s broker): the licensee representing you, the buyer. Lines up showings, writes and negotiates your offer, and stays on through closing. See agent vs broker.
• Listing agent (seller’s agent): represents the seller. Their job is the seller’s best price and terms, not yours.
• Dual agent: one broker representing both sides of the same deal. Legal in New York with written consent, but a dual agent gives up the right to negotiate for either side.
• Principal broker: the licensed broker legally responsible for a firm’s agents. New York’s own term, not “broker of record.”
• Managing agent: the property management company that runs a co-op or condo’s day-to-day operations and processes your board package.
• Procuring cause: the broker whose work actually led to the sale and therefore earns the commission. Covered in buyer representation rules.

Money and financing

The acronyms are a lender’s love language.

• Pre-qualification: a quick, unverified estimate of what you might borrow. Weak.
• Pre-approval: the lender has checked your income, assets, and credit and will lend a stated amount. What a seller takes seriously.
• DTI (debt-to-income ratio): your monthly debt payments divided by gross monthly income. Lenders and co-op boards both use it.
• PMI (private mortgage insurance): extra monthly cost when you put less than 20% down on a condo or house.
• Points: an upfront fee paid to lower your mortgage rate. One point is 1% of the loan.
• Post-closing liquidity: cash and assets left after closing, usually stated as months of mortgage and maintenance. Co-op boards set a minimum, often one to two years.
• CEMA (Consolidation, Extension and Modification Agreement): a New York move that lets a buyer and seller combine mortgages so the buyer pays mortgage recording tax only on new money, not the whole loan.
• Escrow: money held by a neutral third party, usually an attorney, until the deal closes.
• Underlying mortgage: the loan on a co-op building itself, which your maintenance helps pay. A large or ballooning one is a risk.

You can model most of these against a real purchase price on the closing cost calculators.

The offer and the contract

In New York, ‘we have a deal’ and ‘we have a contract’ are weeks apart.

• Offer: your proposed price and terms. Not binding in New York until contracts are signed.
• Accepted offer: the seller says yes. Still not binding. The lawyers now take over.
• Deal sheet (term sheet): a one-page summary of the agreed terms that circulates to both attorneys. Not a contract.
• Contract of sale: the binding agreement, drafted by the seller’s attorney and negotiated by your attorney. See when to hire an attorney.
• Contract deposit (earnest money): typically 10% of the purchase price, wired to the seller’s attorney’s escrow account at signing.
• Contingency: a condition that lets you exit and recover the deposit, most often a financing contingency (your mortgage falls through) or an appraisal contingency.
• Fully executed: both parties have signed, and the deposit has cleared. Now you’re “in contract.”
• Closing: the meeting where money and title change hands and you get keys. Usually 60 to 90 days after the offer is accepted.

Co-op and condo terms

The co-op has a vocabulary all its own, mostly ways of saying no.

• Co-op: you buy shares in a corporation and get a proprietary lease, not a deed.
• Condo: you get a deed to real property, plus a share of the common elements.
• Proprietary lease: the co-op document giving you the right to occupy your unit as a shareholder.
• Board package: the co-op application. Tax returns, bank statements, reference letters, a personal statement, and the deal terms.
• Board interview: the in-person meeting after the package is reviewed. Usually, it’s a formality if the package is strong.
• Right of first refusal: a condo board’s option to buy the unit itself on your terms instead of approving you. Rarely used.
• Flip tax: a fee the co-op charges on a sale, set in the proprietary lease or by-laws, often 1% to 3% of the price. Usually paid by the seller.
• Maintenance: the co-op’s monthly charge, covering the building’s operating costs, the underlying mortgage, and property taxes.
• Common charges: the condo equivalent of maintenance, but without property taxes, which a condo owner pays separately.
• Sponsor unit: an apartment still owned by the building’s original developer. Often, no board approval is needed, but the buyer may pay the transfer taxes.
• Sublet policy: the co-op’s rules on renting out your unit. Ranges from generous to near-total bans.

NYC taxes and fees at closing

A co-op skips two of these, which is the closest it gets to generous.

• Mansion tax: paid by the buyer, from 1% of the price on a purchase of $1,000,000 or more, rising in brackets above that.
• Transfer tax: paid by the seller on a resale. New York State plus New York City, roughly 1.4% to 1.825% combined. On new construction, the buyer often absorbs it.
• Mortgage recording tax: paid by the buyer on a condo or house mortgage in NYC, about 1.8% to 1.925% of the loan. Co-ops don’t have it.
• Title insurance: a one-time premium protecting a condo or house buyer against defects in the title. Co-ops don’t need it.
• Coop/condo tax abatement: an NYC property tax reduction for owners who use the unit as their primary residence.
• Run all of these on the closing cost calculators, and see the closing costs hub for the full breakdown.

Building, zoning, and space

The square footage on the listing is a genre of fiction.

• Certificate of Occupancy (C of O): a Department of Buildings document that states a building’s legal use and occupancy. No valid C of O is a red flag.
• TCO (Temporary Certificate of Occupancy): a time-limited C of O, common in new construction. It expires and must be renewed until the permanent one is issued.
• FAR (floor area ratio): a building’s floor area divided by its lot size, capped by zoning. It matters if you want to expand. See floor area ratio.
• Land lease: the building sits on land it doesn’t own and rents. The rent resets periodically and can spike, so land-lease buildings trade at a discount.
• Gross vs. usable square footage: gross includes wall thickness and a share of common space; usable is what’s inside your walls. Listings quote gross.
• Offering plan: the Attorney General-regulated document describing a condo or a new development, including what the sponsor will deliver.

The terms in national glossaries skip

These are the ones that surprise a buyer from anywhere else.

• Board package and board interview: no other US market makes a buyer submit to a co-op board.
• Flip tax: a private fee your own building charges you for selling.
• Maintenance vs. common charges: two different terms for the monthly bill, depending on whether it’s a co-op or a condo.
• CEMA: a New York-only way to cut the mortgage recording tax.
• Deal sheet: the pre-contract step that makes an “accepted offer” mean much less here than in most states.
• Land lease: a category of building most buyers have never heard of until the ground rent resets.

Our 8 essential tips for buying in NYC are in the order you’ll encounter them, and a commission rebate is another term worth knowing: your agent returning part of their fee to you at closing.

Common questions

What is a deal sheet in NYC real estate? A one-page summary of the agreed-upon price and terms is circulated to both attorneys after an offer is accepted. It is not a binding contract; the contract of sale comes next.

What’s the difference between maintenance and common charges? Maintenance is a co-op’s monthly charge that includes property taxes and the building’s underlying mortgage. Common charges are a condo’s monthly charge and exclude property taxes, which the owner pays separately.

What is a flip tax? A fee a co-op (occasionally a condo) charges on a sale, set in its own governing documents, often 1% to 3% of the price and usually paid by the seller.

Who pays the mansion tax in NYC? The buyer. It starts at 1% of the purchase price for purchases of $1,000,000 or more and increases in brackets above that.

What does “in contract” mean? Both the buyer and seller have signed the contract of sale, and the deposit has cleared. Until then, either side can walk away.

Written by Nicole Fishman Benoliel

Co-founder of NestApple and a lawyer admitted to the New York bar, not currently practising.