New York Real Estate Contract Guide
New York's real estate process is fundamentally different from most of the country. Attorneys — not agents — draft the contract. Attorney review is standard practice. Co-op purchases involve board approval. And the closing process is entirely attorney-driven. Here's what you need to know.
NY Contract Forms
Unlike most states, New York does not use standardized contract forms. Attorneys draft the contract for each transaction, typically starting from firm-specific templates or bar association forms. This means every contract can be different.
Contract of Sale (Attorney-Drafted)
The primary contract document, drafted by the seller's attorney and reviewed/negotiated by the buyer's attorney. Content varies significantly between attorneys and transactions.
Bar Association Template (NYC)
The New York City Bar Association and Real Property Law Section publish template contracts that many attorneys use as starting points, but they are heavily customized.
Rider to Contract of Sale
Additional terms and modifications attached to the main contract. Often extensively negotiated and can be longer than the base contract itself.
Co-op Contract of Sale
Specialized contract for cooperative apartment purchases. Addresses stock and lease transfer (co-ops are personal property, not real property), board approval contingency, and flip tax provisions.
Condo Contract of Sale
While similar to a standard contract, condo contracts include additional provisions for common charges, right of first refusal, and building-specific requirements.
NY Deadline Rules
New York's deadline rules are less standardized than states with mandated forms. Many deadlines are negotiated between attorneys and written into the specific contract.
Attorney review period
While not codified in state law like New Jersey, attorney review is standard practice in New York. The buyer's attorney typically has 3–5 business days to review and negotiate the contract before the buyer signs.
Mortgage contingency deadline
Usually 30–45 days from contract signing. Must be expressly negotiated and included in the contract. Without it, the buyer has no financing protection.
Closing date ('on or about')
New York contracts typically use 'on or about' language for the closing date, usually 60–90 days from contract signing. This is treated as a target with 'reasonable adjournment' allowed, typically interpreted as 30 days.
Time of the essence letter
To make a closing date firm, one party must send a 'time is of the essence' letter to the other, typically giving 30 days notice. Only after this letter is the closing date a hard deadline.
Board application deadlines (co-ops)
If purchasing a co-op, the buyer must submit a board application within a specified timeframe. The board interview and approval process can take 30–60+ additional days.
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NY Contingency Rules
New York contracts can include various contingencies, but they must be expressly negotiated and included by the attorneys. Nothing is included by default.
Mortgage Contingency
Protects the buyer if they cannot secure financing. Must specify the loan amount, interest rate cap, and deadline. If the buyer cannot obtain a commitment letter by the deadline, they can cancel and receive their down payment back.
Inspection Contingency (if negotiated)
Not standard in NYC transactions. In many NYC deals, the buyer conducts inspections BEFORE signing the contract. In suburban NY, inspection contingencies are more common.
Board Approval Contingency (Co-ops)
Essential for co-op purchases. If the co-op board rejects the buyer, the contract is canceled and the down payment is returned. This is one of the few contingencies that is almost always included.
Sale of Current Home Contingency
Rarely accepted in competitive NYC market but more common in suburban areas. Allows the buyer to cancel if they cannot sell their current home.
Appraisal Contingency
Must be expressly negotiated. Many NYC attorneys include this as part of the mortgage contingency — if the property doesn't appraise, the lender won't approve the loan.
For a complete overview of how contingencies work, see our guide: Real Estate Contract Contingencies Explained.
NY Disclosure Requirements
New York's disclosure requirements are notable for what's NOT required. The Property Condition Disclosure Act allows sellers to opt out by paying a $500 credit.
Property Condition Disclosure Statement (PCDS)
Required under NY law, but sellers can opt out by giving the buyer a $500 credit at closing. Most sellers in NYC choose the credit to avoid liability — making buyer due diligence even more important.
Lead-Based Paint Disclosure
Federal requirement for pre-1978 buildings. Particularly relevant in NYC where many buildings are pre-war.
NYC Smoke/CO Detector Affidavit
Seller must certify that smoke and carbon monoxide detectors are installed and operational.
Bed Bug Disclosure (NYC)
NYC requires disclosure of bed bug infestation history for the past year. Specific to New York City.
Flood Zone Disclosure
Sellers must disclose if the property is in a FEMA flood zone. Particularly relevant for coastal Brooklyn, Queens, and Staten Island.
Asbestos/Environmental
Not specifically mandated but common in attorney-drafted contracts, especially for pre-war buildings that may contain asbestos, lead, or other environmental hazards.
NY Earnest Money Rules
In New York, the earnest money deposit is commonly referred to as the 'down payment' or 'contract deposit.' It's typically much larger than in other states.
Typical amount
10% of the purchase price is standard in New York. This is significantly higher than the 1–3% typical in other states. In some competitive situations, 20% may be requested.
Deposit timing
The deposit is due when the buyer signs the contract, which happens after attorney review. The check is typically held by the seller's attorney in escrow.
Held by seller's attorney
In New York, the contract deposit is held in the seller's attorney's escrow account, not by a title company or broker.
Release upon closing or cancellation
The deposit is applied to the purchase price at closing. If the deal falls through under a contingency, the buyer gets it back. If the buyer defaults, the seller may keep it as liquidated damages.
Escrow agreement
The contract includes provisions governing the attorney's escrow obligations, including when and how the funds can be released.
Learn more about common pitfalls: Earnest Money Clause Mistakes (And How to Fix Them Fast).
New York-Specific Rules
New York's real estate process — especially in NYC — is unlike any other market in the country.
Attorney involvement is essential
Both buyer and seller should have real estate attorneys. Attorneys negotiate the contract, conduct due diligence, review title, and attend closing. The agent's role is primarily matchmaking and negotiation guidance.
Co-op vs. Condo distinction
In NYC, approximately 75% of apartments are co-ops (buying shares in a corporation) rather than condos (buying real property). Co-ops have stricter requirements: board approval, financial requirements, flip taxes, and subletting restrictions.
NYC transfer taxes
NYC imposes transfer taxes on top of New York State transfer taxes. Combined, the seller typically pays 1.4–1.825% for properties under $500K and 1.825–2.075% for properties over $500K. The 'mansion tax' adds graduated surcharges above $1M.
Mansion tax
Purchases of $1M+ in NYC are subject to a buyer's mansion tax starting at 1% and increasing at higher price points (up to 3.9% for $25M+). This is a significant closing cost unique to NY.
Title insurance
In New York, title insurance is strongly recommended but not mandated (lenders require it for mortgages). Rates are set by the NY Department of Financial Services. CEMA (Consolidation, Extension, and Modification Agreement) can significantly reduce mortgage recording tax on refinances.
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