Do This Before Negotiating a New Development Condo in NYC

Buying a new development condo in NYC is slightly more complicated than buying a regular apartment. Here's why:

1) Buyer closing costs for new developments are higher. They can be up to 6% compared to 3% to 4% for non new-development condos.

2) Whether the buyer or seller pays certain closing costs on a new development is negotiable.

Reduce Your Buyer Closing Costs in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/

New Construction Buyer Closing Cost Calculator for NYC: https://www.hauseit.com/new-development-closing-cost-calculator-nyc/

So in this video, we’ll tell you exactly what you should do before negotiating a new development condo in NYC. I’m Nick at Hauseit. Visit https://hauseit.com to learn how to save money if you’re buying or selling a co-op, condo or townhouse here in NYC. So let’s get started!

First things first, a bit of terminology. In this video, we use the words ‘developer’ and ‘sponsor’ interchangeably. They mean the same thing. Both words refer to the seller.

The first thing you should do before negotiating a new development condo in NYC is to request the closing cost summary from the building’s Offering Plan. This document provides a highly detailed overview of all closing costs applicable for the new development you’re considering.

Many buyers (and buyer’s agents) make the mistake of simply asking the listing agent for an overview of the closing costs, without asking to see the exact language from the Offering Plan.

This is problematic because a listing agent could provide a vague answer, or the agent could accidentally or intentionally omit a closing cost.

In one small Brooklyn new development we came cross recently, the sponsor added an additional buyer closing cost of $3,000 to “defray the Sponsor’s costs of creating the condominium.”

The listing agent didn’t mention this extra $3,000 closing cost, only saying that the buyer is responsible for transfer taxes and sponsor legal fees.

The second thing you should do before submitting an offer and negotiating on a new development condo is to confirm what incentives (if any) are being offered by the developer.

For example, many new developments will openly advertise that the developer has agreed to cover some closing costs which are typically the responsibility of the purchaser, such as transfer taxes and sponsor attorney fees.

Whatever incentives being offered by the developer don’t need to be negotiated since the sponsor has already agreed to them upfront.

The first step in obtaining this information is to re-read the listing description. Often times, the incentives being offered by the developer are listed there. However, this information is frequently out of date.

Even if the listing description mentions something about developer incentives, make sure you confirm what’s being offered in writing with the listing agent before submitting an offer.

Developers might also be offering a higher buyer agent commission for contracts signed within a certain time-period. fIyfou mistakenly think you’re negotiating for something which is in fact already being offered by a developer, it means that the terms of your original offer aren’t aggressive enough.

The third thing you should do before submitting an offer and negotiating on a new development condo is to confirm what other things are for sale. For example, what size storage cages are for sale, and what are the asking prices for each size? It's very common for a developer to give away a storage cage.

If you don’t have the complete picture of what sorts of things might be negotiable, it will weaken your negotiating position and reduce your chances of getting the best possible deal.

The final thing you should do before submitting an offer on a new development is to request a buyer agent commission rebate. This is an easy way to save thousands of dollars on your purchase. In essence, your buyer’s agent will give you back a large portion of the commission paid to her or him by the developer.

Buyer agent commissions on new developments are typically the highest in NYC, and this means the size of the rebate you can receive from your buyer’s agent can be substantial. It’s a great way to significantly reduce your buyer closing costs.

At Hauseit, we offer buyer agent commission rebates through our Buyer Closing Credit program.

Request a NYC Buyer Agent Commission Rebate: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/

To learn more and sign up, check out our website, https://hauseit.com, send us an email to team@hauseit.com or give us at a call at (888) 494-8258. We’ve saved New Yorkers millions on closing costs since we were founded in 2014, and we’d love to help you too.

Don’t be one of those people who leaves money on the table by not receiving a buyer agent commission rebate from your’ buyer’s agent.
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Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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