All New York Real Estate offers will include the following:

• The price
• A proposed closing date
• Inclusions or exclusions of property in the apartment, such as fixtures or air conditioners
• Mortgage contingency status
• The percentage of the contract price needed to be financed

Most condos require a minimum of 10% down, and the majority of co-ops require a minimum of 25% down.  In other words, most condos or townhomes allow your buyer to finance up to 90% whereas the majority of co-ops allow your buyer to finance up to 75%.  In addition, most co-ops want to see that your buyer will have a minimum of $50,000 in liquid assets after the purchase of the apartment.

Important:  While most condo associations accept financing of up to 90%, mortgage institutions are not obligated to offer such a high mortgage.  And there are many buildings that mortgage institutions will not offer a mortgage of 90%, regardless of your personal wealth.  In such an event, a mortgage institution is likely to offer a mortgage of 75% or 80% of the contract price.  If such an event takes place, the buyer may choose to take out a second mortgage, otherwise known as a subordinate mortgage.

Mortgage Contingencies
A mortgage contingency simply means that the purchase of an apartment is contingent upon getting a mortgage.  When the buyer signs a contract for an apartment (co-op or condo) in Manhattan, a deposit of 10% is required.  In a seller's market, buyers are often required to waive their mortgage contingency, meaning that that the seller would be entitled to keep the buyer's deposit if the buyer was unable to obtain necessary financing. Had the buyer been turned down from even a single mortgage company and not waived his/her mortgage contingency, he/she would have been able to be released from the contract without losing the deposit or suffering any further penalties.  The seller would then have to start the process all over again.

Unfortunately in Manhattan it usually takes a few weeks to get a commitment letter or notification of a mortgage from a mortgage institution.  It also takes time negotiating with buyers.  And from the time the contract was signed, to the day you learned your buyer was unable to obtain a mortgage, the apartment was off the market.

While there clearly is an advantage for the buyer to not waive their mortgage contingency (thereby not putting their deposit at risk), by doing so, the buyer's bid will be more compelling to the seller and give this buyer an advantage over any buyer not willing to waive their mortgage contingency.  

If the buyer is absolutely confident that either a satisfactory mortgage can be obtained or funds for the apartment will be available, the buyer may choose to submit a non-mortgage contingency.  This is makes the offer much stronger, and now this buyer will have an advantage over buyers that require a mortgage contingency.  Sometimes this is the difference between getting the apartment and not getting the apartment.

In other words, by placing a non-mortgage contingency, the buyer bets the 10% deposit that a satisfactory mortgage can be obtained.  For you, as the seller, a non-mortgage contingency reduces the risk associated with the buyer applying for a mortgage.  If you receive two offers at approximately the same price, and one of the offers has a mortgage contingency, you will probably choose to go with the non-mortgage contingency offer.