A. Some buildings charge a flip (or transfer) tax when you purchase or sell an apartment. The purpose of the flip tax is to add funds to the co-op’s reserves.
The fee is usually calculated as a small percentage of the gross sale price of the apartment or of the profit between the previous price and the current sales price. Most buildings charge the seller; however, there are some that will charge the buyer.
Your agent should inform you about this when you see the apartment or prior to purchase so that you can consider this in the purchase price. A flip tax is not necessarily a bad thing because it helps the co-op avoid charging assessments when certain work needs to be taken care of in the building.
Q. I am selling my house and buying an apartment. What do I do first? I need the money from the house to buy, but I’m afraid to accept an offer.
A. This is not an uncommon situation. Most of the people I deal with are selling and buying. Working with a real estate broker on both sides will help you through this process.
There are a number of solutions to this problem, but it’s important to be up front with all parties. It is possible to arrange a closing for both the sale and purchase on the same day. Alternatively, you can close on your sale property, stay for a few days, and pay rent until you can close on the purchase.
The other point is that if you cannot purchase without selling, you will need to make it clear that your purchase is “contingent” on the sale of your property.
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