3 (More) NYC Real Estate FAQs: New Developments, Mansion Tax, and Cash Buyers

In this week’s episode, John answers some frequently asked questions about New York City real estate. Navigating the market on your own can be challenging, but our team is here to help you understand the ins and outs of buying NYC real estate, including what happens when a new development doesn’t sell out, what the mansion tax is, and whether or not cash buyers get better deals.

====What happens if new developments don’t sell out?====
New developments can be more complicated to buy in than resale apartments, simply because the building’s plan has to be declared effective, or 15% of the units need to sell in order for any of them to close. If a new development building can’t get to that magic number, it can spell financial trouble for the developer. Sometimes they will lower prices, cut bigger deals, increase buyer incentives, or simply rent out the units to get through.

If you’ve purchased a new development apartment and it doesn’t sell out, the value of your home can go down temporarily, and it might be harder to refinance.

If you are buying in a smaller development, there is much more risk. As in any transaction, having a great real estate broker and real estate attorney on your side can help you navigate the new development marketplace.

====What is the mansion tax?====
The mansion tax is imposed by the City of New York, and is a straight tax on the purchase price of any apartment over $1M. As of recording, this ranges from 1% for apartments between $1M-$2M, all the way up to 3.9% for apartments $25M+. The tax is usually paid at closing.

====Do cash buyers have more buying power in NYC than financed buyers?====
In a marketplace like NYC, where there are so many wealthy people, cash buyers are pretty common. But that doesn’t necessarily make them more attractive when compared to buyers that are financing, especially if they are willing to waive the financing contingency in their contract. At the end of the day, sellers just want top dollar for their apartments, and don’t worry too much about where the funds are coming from.

SHOW NOTES:
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While the market can be hard to predict, and both buying and selling properties can be challenging, our team has the experience, passion, and knowledge needed to help you find exactly what you need.

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As one of the top-performing teams at Corcoran, The Gasdaska Conlon Team has seen success, but none of that matters without our clients. We treat every person we work with like we would treat our own family, and it shows. John Gasdaska and Jonathan Conlon are expert, experienced brokers and they are ready to help you buy or sell your piece of NYC real estate.