I don’t mean to sound like an infomercial, but… you, yes YOU, can save thousands of dollars when purchasing new construction condos in places like:
- Upper East Side
- and even SHEEPSHEAD BAY!
Okay, enough silly gimmicks. Let’s get to the point.
When a sponsor sells a new construction to a potential purchaser, i.e., you, they will always have an offering plan. Think of the Offering Plan as the Bible of the condo. All the rules, fees, regulations, etc. are placed there.
What you will almost always find is that the seller makes you, the purchaser, pay for things like the seller’s attorney’s fees, which you no doubt love to pay for. But wedged in there is a requirement to pay the New York City and State Transfer taxes as well.
This differs significantly from any other real estate purchase or sale in New York City. In other transactions the SELLER is the one who usually pays these taxes. For some reason, in a new construction – especially in the crazed market of yesteryear – the buyers always paid these taxes.
The taxes are typically 1.5 percent of the purchase price, plus another 1 percent for a mansion tax if the condo is going for over $1,000,000.
However, this is not the case anymore. In the weakened market, purchasers of newly constructed units are granted a bit of leeway to bargain.
Example: I am involved in the purchase of a property for several millions of dollars right now in SoHo, in the heart of New York City. Not me personally (sad face), but a client. The Offering Plan stated that the buyer would pay all transfer taxes. We said “Nah, you pay the taxes.” They said, “OK.” I’m not kidding. It was easier than negotiating….I don’t know, something that’s easy to negotiate.
Any New York City real estate attorney worth their weight will write up a rider to the contract and specifically state that the seller shall pay for all the taxes. Sometimes they’ll take the whole thing, sometimes they pay for half. Either way, there can be enormous savings when your trusty lawyer catches this and tries to negotiate this away. There is no guarantee it will happen, but in this soft real estate market it happens much more often than you think.
Now please allow me to go back to staring at that condo in SoHo….
Daniel Gershburg Esq., is a real estate and bankruptcy attorney with offices in Sheepshead Bay and Manhattan. The practice was specifically set up to change the way people view attorneys, by incorporating radical ideas like calling people back quickly, returning emails, giving clients ’round the clock access to their cases and charging low fees. For more information please visitBrooklyn Real Estate Attorney Daniel Gershburg