This glossary of New York real estate terms and phrases is compiled from our experience working with clients in the field as well as other industry resources such as The Real Estate Board of New York (REBNY). We hope you find it useful and practical.
An all-cash deal is a purchase that is not contingent on the purchaser obtaining financing from a bank or another lender. The purchase is financed with the purchaser's own funds at closing, rather than funds sourced from a mortgage or other types of purchase financing.
Amenities of a building are features that benefit apartment owners and increase the overall value of the building. A few examples of amenities in New York apartment buildings include a gym, common area for residents, doorman, cold storage for grocery deliveries, parking garage, and a pool.
An appraisal is an exercise conducted to estimate the value of an apartment or building. Banks will conduct an appraisal of the apartment, when the purchaser is financing, to determine the value of the apartment for lending purposes.
A board of directors provides oversight and governance of a building's operations and financials. Each condo and co-op building has a board. The board is elected by the owners and acts in the owners' best interests. Board members are unpaid volunteers and, in larger buildings, work closely with a management company / managing agent to ensure the efficient functioning of the building.
A real estate broker represents individuals or companies in purchasing, selling, leasing, or renting real estate. Real estate brokers and real estate salespersons are licensed by the State of New York.
A capital expenditure is an improvement to an apartment or a building with a useful life of more than 1 year.
Certificate of Occupancy
A Certificate of Occupancy (CO) states a building’s legal use and/or type of permitted occupancy. New buildings must have a CO, and existing buildings must have a current or amended CO when there is a change in use, egress or type of occupancy.
A real estate closing is the event when title to the apartment or property is formally transferred to the purchaser, and funds for the purchase transferred to the seller. At the most basic and practical level, the keys to the apartment are handed to the purchaser, and the money is given to the seller. The purchaser(s), seller(s), attorneys, banks, brokers / agents, and their representatives will gather and execute the necessary forms and documents to complete the transaction.
Commission is how licensed real estate brokers are typically paid in residential or commercial transactions. Real estate agents who work for sellers, buyers, owners, and renters and are compensated via commission, which is typically calculated as a percentage of the gross purchase or lease value of transaction. In a residential apartment purchase, the commission is paid by the seller's broker during closing. The broker representing the buyer is paid out of this commission, which means the buyer does not pay any commission fees.
Condo is short for "condominium". A condo is a type of real estate ownership that gives you (or you and a partner) legal title to an apartment in a building with multiple units. You are the legal owner of that apartment. Many recent New York new development buildings are condo buildings. Condos are in general less restrictive than their cooperative counterparts and are more investor-friendly. Condo boards can be more flexible in allowing investors to purchase in the building for purposes of leasing the unit, or for those looking for pied-à-terre apartments.
A real estate contract is an agreement between two or more parties to transact real estate. A contract is the formal agreement negotiated by attorneys representing the seller and the buyer respectively to purchase real estate. Every purchase / sale in New York will require an executed contract as part of the purchase process.
Co-op is short for "cooperative". A co-op is a type of real estate ownership that gives you shares of a corporation. Those shares entitle you to a proprietary lease of your apartment. In general, the larger the apartment relative to other apartments in the building, the more shares in the corporation you will have.
A deed is a written document that conveys or transfers legal title to a property from one party to another.
A duplex apartment is an apartment that has two levels.
An exclusive listing is a contract whereby the owner of an apartment grants one real estate broker the right to market the property.
A flip tax is a tax imposed by a cooperative building to be paid by the seller or purchaser of an apartment. The tax is usually a percentage of the purchase price. Some cooperative buildings impose this tax to discourage the "flipping", or frequent sale, of apartments within the building. Condos generally do not impose this type of tax. A real estate broker would be able to determine whether a flip tax exists within a given building.
A full bath is a bathroom that includes either a bathtub or shower.
A half bath is a bathroom that does not include a bathroom or shower.
A loft is an apartment that has features such as open space, large windows, and high ceilings. Many lofts in New York exist in the downtown area, and are converted from former commercial spaces.
A managing agent is a residential property manager retained by the Board to maintain continuous and efficient operations of the building.
A mortgage is an agreement between a purchaser of real estate and a lender or creditor (typically a bank such as Chase or Wells Fargo, among many other banks and financial institutions) to loan money in exchange for title to the property as security against the loan.
A multi-family is an entire apartment building that contains individual apartments for rent.
An offering plan is a comprehensive disclosure of material facts about a condominium or cooperative building filed with the New York Attorney General's Office. Developers must create and file with the Attorney General's Office this prospective document to comply with laws that regulate the sale of real estate securities. An offering plan must be filed prior to any offer, sale, or advertising of real estate securities. A review of the building's offering plan is a normal part of the legal due diligence involved in any real estate sale.
A pied-à-terre is an apartment that is kept for occasional use by its owners. Examples of occasional use include coming to the city for work or for use as a second home.
A real estate salesperson is licensed to transact real estate and is supervised by a licensed real estate broker.