New York city Real Estate is made up with Co-ops, Condominiums, Townhouses and Rental Apartments.
Many of my out of town buyers have often seen 'SPONSOR' unit Co-Ops, I thought it will be helpful to create a post so everyone can understand the difference between a traditional Co-Op and a Sponsored Co-Op apartment.
"Sponsor units have NO BOARD APPROVAL! When an individual or company converts a rental building to a co-op or condo, the first transfer of an apartment, or "sponsor unit" does not require board approval. Sponsor Unit: Apartments that are held as an investment by the sponsor, the original developer who built the building or converted the building to a co-op. Sponsor apartments are usually exempt from board approval. (Source: Wallfly.com's Glossary)
- Sponsor units command a premium because people who might not pass a board can buy them.
- For example, a sponsor unit would be a good choice for parents who want to buy an apartment for a child who is a student.
- A sponsor unit may be the best apartment for someone who is not working, or only has a short job history.
- Basically, if you aren't a candidate for a co-op building and can't quite afford a condo, keep an eye out for a sponsor unit!
- Buyers of a sponsor unit should take note that they will need to pay NY State and NY City transfer taxes, and often the seller's attorney fees.
- You still have to submit a board package (Homeland Security! The management company needs to know who is moving into their building) and you almost always have to abide by the building's house rules as far as sublet requirements and pets.
- Although it varies from sponsor to sponsor, you may be able to put down less than the minimum financing normally required by the building.
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