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Latest posts by Gea Elika (see all)
- Buying Property in NYC as a Foreigner - July 14, 2018
- Fiduciary Duties by Your Condo or Co-op Board - July 9, 2018
- Top Questions for Buyers to Ask When Viewing an Apartment - July 7, 2018
A sponsor unit might be your ticket to owning a slice of the Big Apple. Retained by an original owner of the building before it turned co-op, a sponsor apartment carries its share of advantages.
Usually located in prime Manhattan neighborhoods like the Upper East Side and Upper West Side, hunting for a sponsor sale could be worth your time, after all. These five reasons make it clear why so many New York City real estate buyers look long and hard for a sponsor unit.
No board interview
Skipping the standard co-op board interview is one of the leading benefits of buying a sponsor apartment. Questions can be intrusive, requiring applicants to reveal personal information such as income and other financial data to a group of strangers, often judging by numbers only.
Even if you dodge the board interview, you may be required to chat with the sponsor. However, this meeting is usually not as invasive as a typical co-op board interview.
Less money down
Many co-ops require a 25 or 30 percent down payment, but when you buy a sponsor apartment, you can get away with the minimum required by the bank, which is often 20 percent. Less money down means less penny-pinching for you, so you might be able to make that purchase sooner than you’d thought. A smaller amount of down money will leave more cash in the bank after the closing, which brings me to the next point.
Less cash required after closing
Different co-op buildings need different reserve funds after you close on the apartment (could be up to two years mortgage and maintenance in the bank). By purchasing a sponsor unit, you might slide on this one, and your reserve terms could be substantially lower, such as one year of maintenance payments. Most often, if you qualify for the bank loan, you’re home free and can expect to be the proud owner of sponsor apartment.
Many original details
Because most sponsor units are prewar, they most likely come complete with unique details such as hardwood floors with inlay, decorative moldings, tall ceilings, and original doors and hardware. These elements are not only selling points, but also desirable to anyone searching for a classic prewar residence, which could be you, or a potential buyer when you go to sell.
Certain rules may not apply
Known for their regulations, co-op buildings differ from one to the next. If you purchase a sponsor apartment, however, you might be in luck and could be exempt from some of these statutes, such as owning a pet or a particular size dog or installing a washer/dryer in your unit. Check with the sponsor to get details before proceeding with the sale.
Pricing is one thing to consider before actively searching for a sponsor unit. Sales prices could be as much as 20 percent higher if the apartment comes renovated. Flats requiring full renovation could be only slightly higher than non-sponsor units.
When you’re buying a sponsor apartment in a co-op, you’ll avoid much of the aggravation during the process. Know, in the end, your dream apartment in NYC may cost a little more.