Question: Are the closing costs different for coops and condos?
Answer: Coops and condominiums have several major differences in closing costs. Coops will often impose a tax on the Seller, at the time of closing called a “flip tax” which could be a percentage of the sale price, or could be based on the amount of the Seller’s shares in the corporation.
Purchaser of condos, on the other hand, incur additional costs because they are actually purchasing a title to real property, as opposed to shares in a corporation. For the protection of the Purchaser, the title needs to be insured against all “liens” on the property, or disputes of ownership. In New York State the title insurance rates are uniform, and are regulated by the New York State Superintendent of Insurance. The approximate fee is $675.00 per $100,000.00.
When buying a condominium directly from the sponsor of a project , the ere will usually not be title insurance fees, but there will be fees for the Sponsor’s attorney. The Purchaser is also expected to pay the transfer tax for both
New York State and New York City.
However, as Lior Aldad, of Aldad & Associates (212.268.6998, ClosingProfessionals.com) remarks, “It is important to remember that although you may be expected to pay these attorney’s fees, they are not representing you unless you have specifically agreed otherwise. It is your responsibility to seek out an attorney who will zealously advocate on your behalf, and confirm that you will legally receive all that you have negotiated upon with the Seller.”