Sponsor unit closing costs

[margaret]

what are the total costs in closing for the buyer on a sponsor owed unit

[aslan]

Hi Margaret, typical closing costs in NYC are explained in detail in this Hauseit article: https://www.hauseit.com/closing-costs-nyc/

The main difference to be aware of for sponsor unit purchases is that the developer or sponsor may trip to flip some of the seller's closing costs onto the buyer. This typically involves the seller's NYC and NY state transfer taxes, and/or the seller's attorney fees. That can be up to 1.825% for the transfer taxes and $2000-3000 for the sponsor's attorney fees.

[lower_nyc]

Hi Margaret, typical closing costs in NYC are explained in detail in this Hauseit article: https://www.hauseit.com/closing-costs-nyc/

The main difference to be aware of for sponsor unit purchases is that the developer or sponsor may trip to flip some of the seller's closing costs onto the buyer. This typically involves the seller's NYC and NY state transfer taxes, and/or the seller's attorney fees. That can be up to 1.825% for the transfer taxes and $2000-3000 for the sponsor's attorney fees.

This is accurate. Co-op sponsor sales are the same as new construction from a closing costs perspective. Buyers are usually asked to pay NYC & NYS transfer taxes and seller attorney fees. For non sponsor and new construction deals, sellers pay the transfer taxes and their own legal fees.

Just remember that everything is negotiable!

[margaret]

Thank you both

[showtime]

Margaret, besides closing costs, you might see a price premium because sponsor units are more rare. It might takes months or even years to find a suitable one for your client. Furthermore, because of the smoother and easier purchase process (i.e. no purchase application or board interview or normal coop financial requirements) you can see a price premium of 5 or even 10% or more for a sponsor unit.

I know some sites like StreetEasy will allow you to filter by sponsor units, and of course so will your buyer's broker in the RLS.

Lastly, don't forget that some coops will require more stringent financial requirements and down payments than even bank lenders. Some coops might require 25% to even 50% down. Whereas a sponsor may care less and let you buy a sponsor unit with only 10% or 20% down. Big difference.

[lower_nyc]

Margaret, besides closing costs, you might see a price premium because sponsor units are more rare. It might takes months or even years to find a suitable one for your client. Furthermore, because of the smoother and easier purchase process (i.e. no purchase application or board interview or normal coop financial requirements) you can see a price premium of 5 or even 10% or more for a sponsor unit.

I know some sites like StreetEasy will allow you to filter by sponsor units, and of course so will your buyer's broker in the RLS.

Lastly, don't forget that some coops will require more stringent financial requirements and down payments than even bank lenders. Some coops might require 25% to even 50% down. Whereas a sponsor may care less and let you buy a sponsor unit with only 10% or 20% down. Big difference.

Thank you. The only thing I would add here is that most 'sponsor' co-op units will still ask the purchaser to fill out some sort of abbreviated board application. The difference is that, unlike with a normal co-op sale, the building cannot reject you. So there is a purchase application, but it's more procedural than anything else.