What a sponsor closing adds
A resale buyer pays the mansion tax, their own attorney, title insurance on a deeded property, and the mortgage recording tax if they finance. A new development buyer pays all of that and then a second set of costs that exist only because the seller is the sponsor of the building.
The largest are the New York City and New York State transfer taxes. In a resale these are the seller’s. In most NYC offering plans they are passed to the purchaser, which on a $2,000,000 apartment is roughly 1.825% of the price before anything else is counted.
NYC and NYS transfer taxes
The NYC Real Property Transfer Tax is 1% on residential sales under $500,000 and 1.425% at or above it. The New York State transfer tax is 0.4%, rising to 0.65% on residential sales of $3,000,000 or more.
Whether the buyer or the sponsor pays them is a contract term, not a rule. It is negotiable, and in a slower market it is one of the first things a sponsor will concede.
Sponsor attorney and building contributions
The sponsor’s attorney fee is charged to the purchaser in most offering plans and typically runs between $2,000 and $5,000. It buys the purchaser nothing — it pays the seller’s lawyer.
Many buildings also require a working capital contribution at closing, commonly one to two months of common charges, and some require a contribution toward the resident manager’s apartment. Both are set by the offering plan and are not negotiable in the way a fee is.
What to do before you sign
Read the offering plan’s closing cost schedule before you make an offer, not after. It states which costs the purchaser carries, and it is the document the contract will point back to.
Then price the whole transaction, including what comes back to you. On an eligible new development purchase the Buyer Advantage is half the buyer-broker commission the sponsor pays, which on many sponsor units is larger than the transfer taxes being passed to you.
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New Development Closing Cost Calculator
Every cost above as a line you can toggle between buyer and sponsor, with total cash needed and your Buyer Advantage against it.
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