How to Buy a Townhouse in New York City

Anyone looking for a new home in Manhattan or Brooklyn will have noticed that most properties for sale are co-ops and condos. While these properties may have many benefits, they also have downsides, such as needing board approval for renovations and restrictions on noise levels. Consider buying a townhouse for those who want the ultimate privacy and own their piece of New York City land.

This complete guide takes you through buying a townhouse in NYC.

Gardens, historical details, privacy, and many bedrooms and bathrooms are just some benefits of townhouse living. The space and flexibility they provide make them dream homes for many buyers. However, they also come with a whole new set of responsibilities. You’ll be responsible for salting your icy stoop, taking the garbage to the curb, and maintaining your boiler and HVAC. But if it’s privacy and independent living that you’re after, they’re probably the best choice in the whole city.

What is a Townhouse?

If you’ve recently moved to the city or have only lived in apartment buildings until now, you may be uncertain about what constitutes a townhouse. A townhouse is a multilevel residential structure that usually shares a wall with an adjacent property. They’re narrower than a detached house but typically provide some outdoor space in the rear. They can be found throughout NYC and are differentiated depending on the architecture and building material used.

Only 2% of New York’s available residential properties are townhouses, making for a competitive market and safer investment. The best-known type is brownstones, named for the reddish-brown sandstone from which they are made. Different categories include clapboard, limestone, vinyl-sided, and brick. You can gain the most advantage over other interested buyers by working with an experienced townhouse buyer’s agent.

What are the Benefits of Buying a Townhouse?

One of the most attractive benefits of townhouse living is that there is no co-op or condo board approval process in the purchase or sale. This means less hassle and delays in closing, but it also means no house rules. Most townhouses have backyards, decks or terraces, and beautiful tree-lined streets.

I do not forget the original and historical details you can find in each one — most, but not all, date to the 19^th and early 20^th centuries. Stained glass, original woodwork, and decorative fireplaces are some unique details buyers love.

There are also the low carrying costs. By owning a townhouse, you can save big by avoiding monthly co-op maintenance and condo standard common charges to use the amenities found in many New York buildings. Along with that, real estate taxes are typically lower in townhouses.

What are the Disadvantages of Buying a Townhouse?

Like everything, though, there are a few downsides to consider. The cost of maintaining the townhouse falls entirely on your shoulders. Unlike in a co-op, sharing costs with other owners is no way.

The townhouse and all its utilities are entirely your responsibility. Suppose you’re planning to sublet by splitting it into multiple units. In that case, you may require a change in the Certificate of Occupancy — which you should consult with a real estate attorney before doing so.

Pros and Cons of Buying a Townhouse

In a crowded city like New York, privacy is always a luxury. But if that’s a high priority on your home wish list, then there’s no reason you can’t have it, assuming you have the means. Owning a townhouse not only gives you greater privacy. You also get greater flexibility to renovate without going through a pesky co-op board for approval. Nor will you have to deal with a downstairs neighbor making noise complaints. But it’s not all smooth sailing. Townhouse living also comes with maintenance responsibilities, which can be both a pro and a con depending on the appearance. Here are the pros and cons when buying a townhouse in NYC.

Pros

Lots of living space

Townhouses mean lots of living space. This makes them perfect for a growing family as you won’t need to rent out storage over time. The average width of an NYC townhouse is 18-20 feet. Anything less is considered narrow, while anything above 25 feet would be called a trophy property.

It could have excess FAR.

If the building has any extra FAR, this can be used to add extensions or additions to the back of the building. When done right, you can reap profits if you choose to sell in the future.

Privacy

Compared to an apartment building, you have total privacy within a townhouse as you own the entire unit. You won’t need to worry about neighbors above or below you causing a nuisance with renovations or late-night cocktail parties. Or, if that’s what you plan on doing, you won’t need to worry about many noise complaints.

Convenient location

Unlike detached houses in the suburbs, most townhouses are located in the city and Brooklyn. This means you get the benefits of your own private space and all the amenities and conveniences of living in the city.

You own the land

Owning a townhouse doesn’t just mean you own the structure; you also own its ground. This is an excellent investment because if there’s one thing that only goes up in value over the years, it’s land. Perfectly captured in a quote by John Jacob Astor, America’s first multimillionaire. On his deathbed in 1848, Mr. Astor is said to have exclaimed:

“Could I begin life again, knowing what I now know, and had money to invest, I would buy every foot of land on the island of Manhattan.” – John Jacob Astor 1848

Cons

Limited freedoms

Depending on the NYC Department of Buildings and applicable to the Landmarks Preservation Commission, there may be strict restrictions on what improvements you can make inside and outside the home. If you envision making major renovations, this could severely limit your options and stifle creativity. Before buying, check first to see which laws and rules you’ll be bound by.

Small yards

While a townhouse can be very spacious, the same can’t often be said for the backyard. Don’t expect to have a lot of space for landscaping. However, this does depend on the design of the townhouse.

Searching for a Townhouse

Before you can begin the search, there are a few things you need to organize. The first thing to start with is deciding which part of town you want to live in. Begin by seeing as many open houses as possible to familiarize yourself with what’s there. Secondly, find a suitable buyer’s agent that specializes in townhouses. Once you understand your needs, they can provide recommendations and start making phone calls.

Learn the details about rent-stabilized and rent-controlled tenancies. Also, educate yourself about buying a townhouse and think about the costs of possible renovations. Multi-Family townhouses are cheaper but come with less privacy. You’ll also need to have your finances in order. The closing costs are typically 20-40% of the purchase price.

Home Inspection is a must.

Once you’ve found a townhouse you like, you might be tempted to move straight to making a purchase offer. Instead, hold out until you’ve had the property inspected by a licensed home inspector. This is usually not an issue with co-ops or condos, but it should be mandatory with townhouses. Have them check for any structural issues, plumbing, or electrical issues. That way, you can avoid any nasty surprises after buying the property. If you find any problems, you might be able to negotiate a reduced price or ask that repairs be done before you sign a purchase contract.

Negotiating a Townhouse

Your buyer’s agent runs a comparative market analysis and then will conduct negotiations on your behalf and work to get the best offer in your favor. Your buyer’s agent will help you draft a purchase offer if you’re happy with everything.

There may be a bit of back and forth as counteroffers are made, but you can move on to the next step once you’ve reached an agreement. Once an offer is accepted, your broker will introduce you to a real estate attorney, ironing out the final details and composing a purchase contract. Remember that nothing is binding until both parties have signed on the dotted line.

Reviewing the Contract

Once an agreement has been reached, the seller’s attorney will draw up the deal sheet. The deal sheet is then sent to the seller’s attorney, who will, in turn, draft the contract for the buyer’s attorney to review. Upon signing the contract, you must write a check for 10% of the purchase price. The cash from this will be kept in an escrow account of the seller’s attorney until the sale has closed. You are now “in contract” with neither side able to walk away without legal consequences.

If you’re having the purchase financed, now is the time to begin applying to banks for the mortgage loan. You’ll also need to arrange for homeowner’s insurance. If you’re taking out a loan, you won’t be able to close without it. You will still need to clear the title if you’re an all-cash buyer. You can usually close within a couple of weeks if you’re paying all cash.

The Closing

Once the lender is ready, the buyer’s attorney will schedule a closing. Be sure to do a final walk-through of the property to ensure it is still in the same condition you first saw it.

At closing, buyers, sellers, lenders, and attorneys will gather in an office to sign the various documents that transfer ownership. The buyer will also write checks for such things as a first mortgage payment, escrow payments, and closing costs.

Congratulations! you are now the owner of your own New York City townhouse.

Final Thoughts

If you’re considering buying a townhouse, your budget will be the main factor. Prices can vary widely depending on the neighborhood. The highest sales prices are in the 70s on the block between Central Park West and Columbus on the Upper West Side. The Upper East Side it’s between Fifth Avenue and Madison. In Chelsea, it’s on 21^st and 22^nd Street between 10^th and 11^th Avenue. The West Village also has some of the most prestigious properties.

Buying a townhouse in New York City is the best investment one can make. Buying the right townhouse for the right price in the right location is even better. Townhouse buyers should research average prices and consult a buyer’s agent for advice and guidance.

Sample Townhouse Home Inspection Report