An insiders perspective of what buyers should look for when purchasing in a new development condominium.
- First and most important is that unless the project has been built already and is ready for move-in, you should be flexible on your closing timeline. Construction always equals delays. Be prepared to wait 6 months and up to 12 months from the closing projections that you are given by the sales team. From fire alarm inspections, to Con Ed installing the gas meters, you are at the mercy of various city agencies and construction teams and, of course, those custom windows being shipped from Italy never arrive on time. The good news is that the finished product is usually pretty spectacular and worth the wait.
- Expect to pay slightly higher closing costs. It is customary in NYC new development purchases for buyers to be asked by the sponsor to pay NYC and NYS Real Property Transfer Taxes of 1.825%, the sponsor’s attorney fee (which varies but usually around $2750), a capital contribution to the new condominiums reserve fund of usually one or two months of common charges, and on occasion, a Residents Manager contribution to pay for the live-in super’s unit. Instead of your closing costs being 3 to 4% as they would in a normal resale purchase, you can add another 2% in a new development purchase. Fret not, all of this at the end of the day is negotiable.