First-Time Home Buyer Mistakes: What to Avoid in NYC
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The first-time homebuyer mistakes that cost the most in NYC are financial and legal, not cosmetic: waiving the financing contingency, underestimating closing costs, skipping the inspection, ignoring the board minutes, and using the listing agent as your own. Waiving the contingency alone can cost you your entire 10% deposit.
We see the same handful of mistakes on first purchases, and they’re rarely about picking the wrong apartment. They’re about the paperwork and the money. Here are the ones worth guarding against.
Waiving the financing contingency
A financing contingency lets you exit the contract and get your 10% deposit back if your mortgage falls through, per CFPB’s own homebuying guide. Waiving it is the fastest way to donate 10% of a purchase price to a stranger.
Buyers waive it to win a bidding war, and sometimes that’s a calculated risk. But a low appraisal, a job change, or a co-op that caps your borrowing all leave you choosing between finding the cash and losing the deposit. Only waive it if you can actually close all-cash. Our buying process guide covers the other contract contingencies.
Underestimating closing costs in NYC
New York buyer closing costs range from 2% to 5% of the purchase price. First-time buyers plan for the down payment and forget these. The mansion tax does not care that you already spent the down payment: on a $1,000,000 purchase, it’s $10,000, paid by the buyer.
A condo adds title insurance and the mortgage recording tax. New construction adds the transfer taxes that a resale seller would cover.
Build the real number before you set your price ceiling, using the closing cost calculators. A commission rebate offsets a large slice of it.
Skipping the home inspection
For a house or a condo, get an inspection even in a hot market. The seller’s paint is very confident about what’s behind it. An inspector checks the roof, the systems, the foundation, and the things a showing hides. On anything old, add a specialist.
Co-ops are trickier because you often can’t inspect beyond the unit. The building’s engineering reports and reserve fund take care of that instead. Ask for them.
Not reading the board minutes
For a co-op or condo, your attorney reviews the last two years of board meeting minutes. Read the summary they give you. The assessment that nobody mentioned is usually mentioned in the minutes.
Minutes reveal a leaking roof that the board has argued about for a year. Or a lawsuit against the building. Or a Local Law 11 facade project not yet billed. Any of those can mean a five-figure assessment lands on you months after closing.
Getting attached before the numbers
The apartment does not know you love it, and the co-op board definitely doesn’t. Buyers who fall in love with a place before running the numbers overpay, waive protections, and rush due diligence.
Do it in order. Set your budget to include closing costs, get pre-approved, decide on a co-op or condo, then tour. Falling in love is fine once the numbers already work.
Using the listing agent as your agent
The listing agent works for the seller. Letting them “represent” you, too, is asking the other team’s coach to also run your plays. It’s dual agency, and as Georges puts it, “A broker can’t really act in the interest of both parties.”
Get your own buyer’s agent, and since January 2025, you’ll sign a written buyer agreement with them before a showing. That agreement defines who works for you and how they’re paid.
| Mistake | What does it cost you |
|---|---|
| Waiving the financing contingency | Your 10% deposit, if the loan falls through |
| Skipping the inspection | Repairs you find out about after closing |
| Not reading the board minutes | A surprise assessment |
| Using the listing agent as your own | No one is negotiating for you |
What we stop clients from doing
Our whole job on a first purchase is being the boring one in the room. We hold the line on the financing contingency. Therefore, we put the real closing costs on the table before the offer. We insist on the building’s financials and read the minutes so you don’t have to guess.
None of that is glamorous, and all of it is where a first-time buyer actually loses money. The rebate is the upside we add on top.
Common questions
What is the most expensive first-time buyer mistake? Waiving the financing contingency and then failing to close. Once the contract is fully signed, that 10% deposit is gone if you can’t complete the purchase and have no contingency to fall back on.
How much should I budget for closing costs in NYC? Plan for 2% to 5% of the purchase price in addition to the down payment. It’s more for a condo or new construction, less for a co-op.
Do I need a home inspection for a co-op? You often can’t inspect beyond the unit, so rely on the building’s engineering reports, reserve fund, and board minutes instead. For a house or condo, always inspect.
Can I use the listing agent to buy the apartment? You can, but they represent the seller. A dual agent can’t fully negotiate for you. Get your own buyer’s agent and sign a buyer agreement.
