Apr 28, 2022
You’re searching for an apartment and you continue to see this every now in the description and it says “sponsor apartment, no board approval”. It seems too good to be true but you wonder what is a sponsor apartment, do I own it the same I would any other apartment, once I buy it will it still be a sponsor apartment, and are there any cons to buying one. Today we are talking about sponsor apartments.
There are many terms in the real estate world but one that has been bandied about for a long time is “Sponsor sale”. What does it mean and is it right for you?
There is an upside to buying a sponsor unit, most popular is that it usually is a co-op and with a sponsor sale, there is no board approval. The downside is that there are additional costs to buying one. They are few and far between and most will need work.
There are definitely pluses and minuses to a sponsor sale. Most considerations are financial such as paying closing costs that would ordinarily be paid by a seller. Second, the property most likely is coming off a rent roll and hasn’t been updated for years. The upside is that you get to make the property your own but more importantly, there is no board approval. One thing to keep in mind is that most likely the property will be a pre-war or older post-war building, not the new shiny penny dotting the skyline. They are a rare gem indeed.
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