Daveduv, Home Buyer in Upper West Side, New...

what does Down 10% means?

Asked by Daveduv, Upper West Side, New York, NY Sun Aug 21, 2011

on a real estate selling add for a condo apartment....
thank you,

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Mitchell Hall, Agent, New York, NY
Sun Sep 18, 2011
Hi Daveduv,

Many people confuse down payment with deposit. A 10% deposit is required on most purchases in NY when a contract is signed. The 10% (sale price) deposit remains in the seller's attorney's escrow account until the closing.

A down payment "down" is the amount of cash that someone puts down (equity) and finances the rest through a mortgage.

The 10% down in an ad means that the condo only requires a 10% down payment and they will allow up to 90% financing for purchasing in their building. While 10% down is a typical condo requirement in Manhattan, many lenders today will not finance 90%.

Before you start looking to buy a condo or coop apartment in Manhattan you need to be pre-qualified by a lender or mortgage broker. The mortgage broker will tell you how much you can afford. They will tell you how much they will loan you and how much you will need to put down regardless of the buildings requirement.

Working with an experienced local buyer's agent will help you with the search, through negotiating offers to a successful closing.


Good Luck!

Mitchell Hall, Associate Broker
The Corcoran Group
Web Reference:  http://nycblogestate.com
1 vote
Joseph Hasti…, Agent, Bayside, NY
Sun Aug 21, 2011
Hi Dave. This means the Condo board requires a prospective buyer to put down a deposit equal to 10% of the agreed to selling price of the Condo unit. In short, the Condo Board of Managers will allow purchases that have up to 90% financing.

Now that we understand that, getting a 90% loan may be the difficult thing as Banks are far more stringent in their lending practices. Many (most) Banks want buyers that are putting down more than 10%. Banks don't want to run the risk of foreclosure and in an effort to not loose out, they may require a much larger deposit. Good luck.
1 vote
Jerry Cibuls…, Agent, Southold, NY
Sat Oct 8, 2011
10% of the purchase price is placed in escrow with the sellers attorney when you sign a contract to purchase a property. This money is showing your intent to complete the terms of the contract and go to the closing table. If you should back out of the purchase and are able to make the purchase, this money can be held by the seller as recourse for taking the house off the market to other potential buyers during the time you had a contractual obligation to purchase thier home.
0 votes
Steve Riddle, Agent, New York, NY
Thu Aug 25, 2011
Be aware of one common tactic with this statement! Yeah, a Realtor can say 10% down, that doesn't mean anything! If the Home or unit does not qualify for a hud, Fannie, or other Program, you will be caught in a Jam.
There are buildings that advertise 10% down, looking to bring in uninformed buyers. The buyers see this as an ideal opportunity to secure a great deal with the minimum down requirement. Here is the thing, I don't know any bank that will write a loan 10% down on a building that is not already eligible for a Federal home loan program like FHA. So you put down 50K on a 500K unit. You think you are getting a deal because you are working directly with the seller's broker. (they get paid to grab your money) You secure your Pre approval, you set a closing date, hire a lawyer, and expect everything to go smoothly. Truth be told, You just fell into a trap! Your money isn't your money any longer. It is known as earnest money. Money that has been accepted in consideration of a closing!. Money that is Kept due to a clause known as "in consideration". Do your self a favor. Get a Buyer's agent! Their job is to look out for your best interest, not the seller's best interest as is often the case with the "in house" Agent! You want proof? it is right here on this board!
0 votes
Brett Malvin, Agent, New York, NY
Wed Aug 24, 2011
10% of the agreed upon selling price...so after the negotiations. Example: Asking price = $1.25M, Agreed upon purchase price after negotiations is $990,000. 10% down would be $99,000. Hope this helps and good luck with your purchase!
0 votes
Armen Meschi…, Agent, New York, NY
Sun Aug 21, 2011
Dear Dave, though the answer to this question is as simple as - 10% of the purchase price. On the other hand it's a loaded one because it opens a whole number of topics on both financing possibilities and property types. To make the best possible real estate buying decisions, especially in the New York market you need to be well informed as a consumer. I am happy to send you a guide that I put together that covers every step in the buying process of all different property types. It covers not only down payments but all the costs (fees, taxes etc.) associated with buying in New York. Feel free to reach out.

Warm regards,
0 votes
Annette Levi…, , New York, NY
Sun Aug 21, 2011
Daveduv, when down 10% in a add it means you only need to put 10% down and finance 90% of the purchase price. There could be a problem about that downpayment. If the ocndo is not a FHA, FREDDIMAC or FANNIEMAE approved you will need to put more down. You should consult with a mortgage broker on which condos can be approved for a 90% LTV mortgage.
0 votes
Spirit Messi…, Agent, Tucson, AZ
Sun Aug 21, 2011
10% down refers to the amount of money down required to secure the purchase. Condos are harder to obtain a loan on, for several reasons. Make sure to ask a local lender when you get pre-approved. This is a great example of why it is so important to be pre-approved before you start looking at housing, get questions like these answered up front. Best of luck.
0 votes
Jenet Levy, Agent, New York, NY
Sun Aug 21, 2011
It means that the policy of the condo building, like most condos, is they allow you to finance 90% and you only have to come up with 10% of your own. That used to be one reason why sometimes condos were more attractive to some buyers who did not have the 20-25% down that most co-ops require (and some require more). However, banks are not lending 90% these days, so though it is the building's policy, it is what a bank will lend you that determines if you can purchase it. My advice is to get pre-approved by a lender so you know your range for a condo and for a co-op. Then, work with an experienced agent who can answer this and the many, many more questions you (and any buyer) will have along the way. We have access to the agent database, are expert negotiators, and will take you through each step of the buying process.

Jenet Levy
Halstead Property, LLC
212 381-4268
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Sun Aug 21, 2011
Hi Dave,

Interesting for me to read these questions from other parts of the country. In our area we see this sometimes to indicate that a home won't qualify for FHA financing and that the buyer needs to be prepared to use conventional financing.

0 votes
Egen Warner…, Agent, New Rochelle, NY
Sun Aug 21, 2011
As all of the others have said its 10% of the agreed purchase price. I.e. If the purchase price is $100K then 10% wil be $10,000. This is your down payment only.

Egen Warner
Associate Broker
Web Reference:  http://www.EgenWarner.com
0 votes
Glenn K., , New York, NY
Sun Aug 21, 2011
Dear Dave,
It means that you have to put "down" in cash 10% of the seller's price, and you finance the rest through a 30-year mortgage. Your monthly payment will usually include your mortgage payment and the monthly maintenance on the unit, whether its a co-op or condo. If I can be of any other assistance to you, don't hesitate to call 24/7 @ (917)-941-0210. Sincerely yours, Glenn @ V & V Real Estate
0 votes
Therese L Ko…, Agent, Bayside NY 11361, NY
Sun Aug 21, 2011
Hi Dav- that means the management or owner is requiring no more than 90% fiancing. But if you have spoken to a mortgage broker/banker most of them(I have found) will only do 80% financing on Coop and Condos (some even less 75% ) there are many variables.... Terry K 718-614-3167 or therese.korahais@elliman.com
0 votes
Christopher…, Agent, Tarrytown, NY
Sun Aug 21, 2011
Hi, It means that it is probably a coop and they require a minimum 10% down payment when purchasing, this is pretty standard.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
Web Reference:  http://raveis.com/chrispagli
0 votes
Brett Grabel, Agent, NY,
Sun Aug 21, 2011
There is often confusion in Manhattan about down payment. The bank cares about how much you are putting down total (equity before closing).
10% is also the typical number you put down in NYC as a good faith deposit on contract signing to be held in escrow, normally by the seller's attorney.
I point out this confusion because while most contract deposits are still 10%, most banks will not lend the 90% balance on a 10% down payment any longer.
0 votes
Phil Rotondo, Agent, Melbourne, FL
Sun Aug 21, 2011
The owner is looking for a 10% down payment on an offer for the property. The 90% balance to be paid at the closing table.
Web Reference:  http://www.321property.com
0 votes
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