Negotiation
When buying a new development condo in New York City, the purchase price is negotiable. Sponsors typically prefer offering concessions, such as covering closing costs, providing credits, or including upgrades, rather than lowering the sale price. This helps preserve comparable sales values for remaining units. Buyers usually have the most leverage early in a building’s sell-out or when only a few units remain and the developer wants to move on.
Sponsor Closing Costs Are Often Reversed
In a typical NYC resale, sellers pay transfer taxes and their own legal fees. However, in new development purchases, this structure is often reversed, meaning buyers are often asked to cover NYC and NYS transfer taxes, as well as sponsor attorney fees. While developers are often resistant to covering these costs, they may agree to pay transfer taxes and legal fees, especially for higher-priced units or during slower sales periods. Negotiating can produce substantial savings without requiring a reduction in the contract price.
Contract Structure Impacts Risk & Cash Flow
Beyond price and closing costs, the structure of the contract itself is negotiable and can significantly impact financial risk. Buyers financing their purchase may negotiate a Purchase CEMA to reduce Mortgage Recording Tax liability. The contract deposit amount and payment timing may also be flexible, and negotiating an outside closing date protects the buyer’s deposit if the sponsor cannot complete the project on time.
Hidden Value Opportunities
Developers may also agree to include or discount extras such as storage, parking spaces, or bike storage to finalize a deal. In certain situations, particularly when construction is ongoing or for higher-priced units, buyers may negotiate alterations like layout changes or appliance upgrades. Additionally, working with a buyer’s agent who offers a commission rebate can further reduce the effective purchase price, creating additional savings beyond what is negotiated directly with the developer.
