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Health & Fitness

Saving Money When You Buy a New Construction Condo in Park Slope

One of the most important jobs of a New York Real Estate attorney is to save their clients money where they can. Negotiating closing costs in a new construction purchase is one of those places.

Lawyers love saving you money. We're known for it. When someone thinks of the word "lawyer" they almost automatically think, "Someone I tust who will save me money". No one thinks that. But here's the deal: When you're purchasing a home in Park Slope, or anywhere else in Brooklyn for that matter, you can save yourself a bundle of cash by negotiating with the spsonor about transfer taxes, attorneys fees, and various other closing costs.  

In a typical Real Estate purchase of a new construction, you'll receive an "Offering Plan" from the Sponsor. These are required reading. Not skimming....reading. They're filed by the Sponsor with the Attorney General and they contain the most important information about the building and unit that you are purchasing. Within this 400 pound paperweight are items discussing what you pay at the closing and what the Sponsor pays at the closing. Back in the days when Sponsors were rich and stuff, they would have you pay for something called transfer taxes. The amount of tax depends on the price you're paying for the Condo, but they typically hover around two percent or so of the purchase price. People were DYING to buy these places so they were forking over cash like they were in the midst of a bank robbery (not that I've been involved in a bank robbery). Anyway, when the economy tanked, many sellers agreed to take on this cost themselves, because they started going bankrupt. Now, for some odd reason, they are trying once again to have purchasers shoulder this cost. Ridiculous.  

The same can be said for attorneys fees. If I represent you, the purchaser, you're paying my fee. Sounds fair. But in new construction condos, many of the offering plans and contracts will call for you to pay the sponsors attorneys fees as well. Huh? Yea. You're paying their fee. And I charge a flat fee. Sometimes sponsors attorneys will charge you for inspecting your mortgage documents (which is beyond absurd because they have nothing do with your mortgage documents). They'll charge you if the closing doesn't happen in their office. They'll charge you if the closing runs over two hours. They'll just charge you. And in my opinion, it's nuts and you shouldn't have to pay for it.  

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So, when is this negotiated? At the very beginning of the purchase. Before you sign the contract. We call the sponsor's attorney and we tell them what we want them to cover. And they typically cover it. Because it's a really weird conversation for a sponsor's attorney to have with their client where the only thing stopping their client from making money is their attorney charging an extra $1,000. 

At the end of the day, you can literally save tens of thousands of dollars with just a few crossouts and some solid negotiation. Just because something is in a contract, or an offering plan, doesn't mean you can't get rid of it.  

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