Probably the best way of looking at your Closing Costs for a Sale of a Condominium Unit is that they will be divided into four (4) different categories. The four (4) primary categories are:
Brokerage Commissions may vary depending on the particular geographical region that you are located and based upon the particular market condition that you are in. For instance, if you are in what is commonly known as a “Seller’s Market Place”, the Brokerage Commission may be a bit less, depending upon the aggressiveness of various Brokers. As a general rule, a Brokerage Commission is 6% of the Purchase Price. When getting ready to sell a property you should count on the Brokerage Commission being 6% of the Purchase Price. From experience, Brokers that are very well versed in the particular area of selling Condominiums, especially those that are well known in the industry generally do not budge from the 6% position of their entitlement to a Brokerage Commission.
Most people agree that having a Broker involved with the particular transaction is a very highly positive maneuver. The Broker may assist in negotiating prices and maximize the potential that a Seller will receive. Regardless, there are many Sellers that proceed with what is commonly known as “SBO” and/or a “FSBO” transaction, which is “For Sale By Owner”. This is dealt with in another section of this website entitled FSBO. It speaks for itself, that a true “For Sale By Owner Transaction”, you do not generally pay a Brokerage Commission. However, this is not always the case.
There are a lot of instances in which although you are selling and announcing that the transaction is “For Sale By Owner”, it may be that the Purchaser that actually visits the Unit is accompanied by a Broker. In such situations the Broker, is entitled to a Brokerage Commission. Sometimes there may be negotiations with that particular Broker so the 6% commission is not 6% but be a lower commission structure. However, under all circumstances, it is imperative to have in writing your Brokerage Commission Agreement. One should never be in a situation where the Brokerage Commission is a debatable proposition. As such, under all circumstances, there must and should be written Brokerage Agreement.
Many people assume that since they are selling a Condominium that the Condominium itself does not have fees nor the requirement of submitting an application. Both these assumptions are wrong. First, there is a Condominium Application that is required to be submitted by a Seller. Unlike the Cooperative, it is the Seller who is required to submit the Condominium Application. In particular the Condominium has the right to either exercise and/or waive its right of first refusal. Due to this concept, a Condominium has the right to issue or not issue its waiver of the right of first refusal. There will be the requirement of the submission of a Condominium Board Application. It is the Seller who is responsible for the ultimate submission of this particular application, although it is mostly the Purchaser’s information that is required. As such, any good Purchaser along with their attorney will review the Condominium Board Application to understand what requirements and more particularly for this particular Closing Cost Section, what fees are attributable to the sale. Common fees are indicated below.
As can be seen, Closing Costs are unique and need to be carefully analyzed. Only through the assistance and expertise of Kishner Miller Himes may one fully understand the ramifications and obtain a true total of Closing Costs.