Waiting for more choice in Manhattan? This fall is delivering it, at least in new construction. Brown Harris Stevens Development Marketing expects more new condo units to launch this quarter than in any quarter of the past ten years. At the same time, new-development contract signings fell 27% from a year earlier in the third quarter, to 240. That can mean more room to negotiate. But buying from a developer, or sponsor, works differently from a resale. Here's what we tell our clients before they sign.
1. Read the Offering Plan (Yes, Really)
Every new condo is sold under an offering plan filed with the New York Attorney General, plus amendments that can change prices, finishes, timelines and the building's budget. Your attorney should review all of it. It's the rulebook for your purchase.
2. Budget for Sponsor Closing Costs
In most new-development deals, the buyer pays the sponsor's NYC and NYS transfer taxes, which together typically add about 1.8% to 2.1% of the price, and often the sponsor's attorney fee too. With sales slower, ask early whether the sponsor will cover some of these costs or offer a credit.
3. Understand the Timeline
In a building still under construction, your deposit, often 10% to 20%, can sit in escrow for months or longer before closing. Ask for the projected closing date, what happens if it slips and how the first-year budget was set.
4. Line Up Financing Early
Lenders look closely at new buildings, including how many units have sold. With the 30-year fixed rate averaging 7.40% in Freddie Mac's October 15 survey, talk to your lender before you sign so there are no surprises later.
5. Look Past the Model Unit
Model apartments are designed to impress. Study your unit's floor plan, exposures, ceiling heights and finish schedule, and ask which amenities are still being built.
6. Plan for the Punch List
At the final walk-through, you'll note anything unfinished or flawed. Get the sponsor's process and timeline for fixing those items in writing.
Resale Still Has Its Advantages
New isn't automatically better. A resale condo comes with a real operating history and known reserves, and buyers usually avoid paying the seller's transfer taxes. Choice is tighter on the resale side, though: Manhattan listings fell 10.7% from a year earlier in the third quarter, while the median sale price held at a record $1.25 million, according to appraiser Jonathan Miller's report.
Let's Find the Right Fit
Drawn to a brand-new tower or a building with years of history? The Sapir Team is happy to compare both side by side. Reach out anytime. We'd love to help you find your next home.
