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I've bid on a sponsor apartment and am waiting to hear back on the results. It was a best and final offer process, so hopefully I win. However, I just heard back from the managing agent that there is a flip tax, and that I am to pay it? Doesn't the seller normally pay the flip tax? I realize for new construction deals, developers usually ask the buyer to pay the transfer taxes and their attorney fees, but the flip tax? That's crazy as I'd have to pay it twice effective, once more if I ever decide to sell.
Here's what the real estate agent told me:
For sponsor sales, the flip tax is usually paid for by the buyer. Since #3A is a sponsor sale, the buyer would pay the flip tax there and legal fees. This is why you see bellow that there would be a flip tax of $7k for this unit (350 shares by $20/share). This flip tax is still under the average 1%-2% for most NYC co-ops over $500k.
Asking for flip taxes to be conceded is recommended on a case by case basis and depends on several factors. When there tends to be aggressive competition for a property with multiple offers that are extremely close in range, it would not be advisable to suggest that the sponsor/seller pay the transfer taxes because that leaves more probability for the seller to go with another offer. Further, the elimination of board approval for the sponsor unit is usually enough incentive for the buyer to not ask for a flip tax concession.
In cases of private sales, such as with #5C, the seller typically pays the flip tax.
Can anyone confirm this? Numbers changed around for privacy reasons of course.
Here's what the real estate agent told me:
For sponsor sales, the flip tax is usually paid for by the buyer. Since #3A is a sponsor sale, the buyer would pay the flip tax there and legal fees. This is why you see bellow that there would be a flip tax of $7k for this unit (350 shares by $20/share). This flip tax is still under the average 1%-2% for most NYC co-ops over $500k.
Asking for flip taxes to be conceded is recommended on a case by case basis and depends on several factors. When there tends to be aggressive competition for a property with multiple offers that are extremely close in range, it would not be advisable to suggest that the sponsor/seller pay the transfer taxes because that leaves more probability for the seller to go with another offer. Further, the elimination of board approval for the sponsor unit is usually enough incentive for the buyer to not ask for a flip tax concession.
In cases of private sales, such as with #5C, the seller typically pays the flip tax.
Can anyone confirm this? Numbers changed around for privacy reasons of course.