^ brb just throwing a few words out while I attempt to stop this mental free fall
While Facebook is wonderful for a way to stay in touch with others; start stalking someone and then 30 minutes later end up on their girlfriend’s ex’s scary cousin’s medieval reenactment group’s page; judge others for their assuming that their child is remarkably more special than every other baby holding a piece of paper broadcasting how many months they’ve been alive (JK guys), I must say it does make life so much easier when you run into someone you haven’t see in a while. While you and Chad haven’t spoken since high school, thanks to social media you can fast forward through the ibanking, his super cool West Village backyard, his girlfriend who facetunes their pictures, and his life changing vacation to some place where he had a hiking picture of himself taken while he looked pensively into the horizon ‘whilest he flexed his traps and delts. It saves you a spot of time and sanity.
But even with these FBI grade ways to seep into the bowels of someone’s most intimate life details, without fail I see someone I haven’t seen in 15 years in a transient moment and they ask the ever-sweeping, “What have you been up to?” Hmm…let me regurgitate what my life has amounted to since my Limited Too days:
“Well if you follow me on social media, I’ve mainly been in costumes eating breakfast.”
Please, fire away any loaded life, work, personal, theoretical questions at me over coffee, breakfast, Manhattan(s); I’m always game. Real Estate, while it can seem simple to some, is actually a hellish maze of constantly moving parts. While I love to talk about work, I was recently at a really horrible bar/club/circle of Dante’s Inferno against my will, when someone asked the weighted question, “What’s the deal with New Development? They’re soooo pretty.”
^”Let’s take your focus’ death grip off the listing’s Disney-World-level amenities and non-existent real estate taxes…”
a
So new construction is definitely a different animal than typical condos and coops. While they are the quickest sales to execute (and usually to move into unless it’s a pre-construction or the building doesn’t have its certificate of occupancy yet), they are sometimes the most expensive price per square foot and in lesser desirable parts of the neighborhoods, as they are more on the fringe where land is available and cheaper. The amenities are typically state of the art (to justify the often higher price for the smaller footprint), and they are all Condos (which comes with easier subleasing, having a deed to your home, an easier, investor friendly resale option, ect.), which are usually ~40% more expensive than similar Coops. With new developments, you avoid the board package and board interviews, but there areweightier closing costs due to the sponsor and the state.
Pros of buying early: Being among the first to invest in a new building will give you the most choices in terms of floor plans, views and exposures and you may have access to more favorable pricing as to move initial sales along. If you are getting a loan, mortgages can be difficult to obtain in new construction until a certain percentage of the project is sold. For this reason, many developers arrange for a “preferred lender” to provide financing. Closing dates are always approximate and it’s not uncommon for the developer to push it out a few weeks or even a few months. Construction projects generally take longer than expected. If you are buying new construction, be flexible on your timing and be prepared to put the deposit out months or years before you close.
In standard resales, the heavy hitters for closing costs are: your attorney fees, if over $1 million you’ll have the 1% mansion tax, mortgage recording tax (under $500k is 1.8% and over $500K is 1.925%), title insurance (about 0.5% of the purchase price), and then 2-6 months of real estate taxes in escrow.
With new development, you will have a few additional costs to what is expected with standard resales: NYC Real Property Transfer Tax (1.0% of the purchase price for under $500k, 1.425% of purchase price for over $500k), NY State Transfer Tax ($4 per $1000 of purchase price), sponsor’s attorney’s fee and a contribution to the working capital fund.
To note another benefit to new developments, many developers were granted incentives in the form of tax abatements when they first filed to start the project. If you’re on Streeteasy and see a new development with $11 for monthly taxes, that abatement will expire at some point and the taxes will be phased into the full value but will remain quite low for the first ¾’s of the abatement.
With whichever type of home you decide to purchase, there are pros and cons that you need to weigh to make sure it is the right purchase for you from an immediate and long-term financial and personal use perspective. While you won’t find me outlining your options with a tri-fold poster board at a table on the roof of the Gansevoort at 3am, I’m always down to pour over the details in a calm coffee shop with an IV of caffeine and a side of overpriced and loaded toast.