New construction condominiums continue to go up at a consistent pace in New York City. They offer the purchaser a brand-new home, usually using the latest in materials, technology, amenities and design.
Despite these upsides, new construction condominiums pose special risks and should be purchased with additional due diligence. Our lawyers at Greenberg & Wilner in Manhattan know the condo market in New York City, and they can put their more than 50 years of real estate law experience to use for you, helping you complete a purchase that fits your unique needs.
Providing The Legal Guidance And Cost Estimates You Need
Buyers often purchase new condos before the units or building is completed, based on floor plans, models or mock-up drawings. However, it is the offering plan that will contain the actual floor plan, list of materials and actual appliances the unit will include. The offering plan will also contain the prices and projected common charges, taxes and operating budget.
Since the condo is new, there will be no audited financial statements to review or any due diligence reports of board meetings. It is essential that the purchaser's attorney examines the offering plan thoroughly.
New construction condos often carry higher closing costs than existing condos. The seller usually passes its transfer taxes on to the purchaser. This is approximately 2 percent of the purchase price. You can learn more about closing costs here. Other additional costs can include fees for the sponsor's attorney, fees for drafting the offering plan book, and fees to start the operating fund. We can provide you with all the details of these potential costs.
We Know The Risks
Purchasing new construction carries a great deal more risk than an existing condo. Our attorneys can help you think through every possible hurdle to closing on your purchase, including:
- The difficulty in obtaining mortgage financing, since lenders prefer established condos. We keep a list of lenders that do provide mortgages on new construction.
- There is usually no mortgage contingency, so if you are unable to obtain financing, you can be required to close anyway or lose your deposit.
- Completion of the unit may be delayed, which can affect your current living situation.
We can provide a clear picture of how much money you are going to have to bring to the table and help you through the steps so that you do not lose your deposit.
We invite you to schedule a consultation with our attorneys today to discuss the possible risks and benefits of purchasing new condo construction. Call us at 212-953-2300 to learn more about how we help homebuyers and sellers in Manhattan, Queens, Brooklyn and throughout New York City. Hablamos español.