25% downpayment req. - what effect on price?
Started by UES_Ida
over 9 years ago
Posts: 76
Member since: Oct 2015
Discussion about
Does a 25% down payment requirement effect price the same way that a 30 or 40% down does? Starting to notice more buildings at 25% so wondering if it no longer matters? OTH, with the high prices and reserve requirements seems like that extra 5% will eliminate a lot of the buyer pool in your typical Manhattan sale.
Zero effect up to 25%-30%.
UES_Ida, are you referring to coops or condos? Coops usually are 30% anyway...
What do new construction condos require these days? Are there any that allow less than 20%?
I have seen condos only requiring 10% down, and there are some new condos in Hoboken requiring only 5% down. I have never seen condos requiring more than 20%. It's usually the co-ops requiring more than 20%, but there seem to be a fair amount listed on SE only asking for 20%. I do think it affects the price somewhat if you are in the market under $2m. I have cash saved for a 20% down payment on an apartment under $2m but if 25% down were required it would be tight given the additional necessary outlay for closing costs. If your apartment will be marketed to someone at a higher price point with a thicker wallet it might not make a difference.
CCL, It is the banks which require more 10% down for condos unless you are willing to pay a higher rate. Typically at least 20% if not 25% for a condo >$2mm. Condo does not care.
It's rare for a Condo to have financial requirements at all, although I believe there are some (very, very few) which have written them into their By-Laws. Most Condo's remedy isn't to be able to reject a sale anyway, it's to exercise their right of first refusal, which most are rather loath to do. It's also why I find some of these rather lengthy Condo purchase applications odd - if you aren't going to do anything no matter what's written on the application, why bother?
So naive.