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2018 Closing Costs in New York City

2018 Closing Costs in New York City

Closing Costs for Buyers and Sellers in New York City, NY

View of New York CiIty High Rise Buildings

What are Closing Costs?

Once a property purchase in New York City has been finalized, both the buyer and seller must compensate the parties involved in funding, approving, and insuring the sale. These charges and fees are what we call closing costs.

Typically, the buyer’s closing costs include the following:

  • Mortgage Insurance
  • Homeowner’s Insurance
  • Appraisal Fees
  • Property Taxes

These costs can be added to the buyer’s mortgage amount and paid in installments. The seller’s closing costs, on the other hand, cover ownership transfer fees and commission to their real estate agent. In some cases, buyers are able to negotiate with their new home’s seller to cover some of their closing costs.

Average Closing Costs for Buyers and Sellers in New York City, NY

Buyer closing costs in New York City range from 1.5% to 5% of the purchase price, while seller closing costs can be anywhere between 8% to 10% of the sale price. These costs will also vary depending on whether you are selling a condo or a co-op apartment.

View of Typical Apartments in New York City

A typical New York City apartment sells at $1.87 million. Given this figure, an NYC buyer can expect to pay around $68,748 (3.7% of sale price) closing costs for a condo, while a co-op apartment buyer would be paying roughly $25,550 (1.4% of sale price). A seller, on the other hand, would have to shoulder closing costs estimated at $153,178 (8.19% of sale price) for a condo and $181,728 (9.72% of sale price) for a co-op apartment.

To have a better idea of how these costs were estimated, below are the average closing costs for both buyers and sellers of condo and co-op apartments in New York City, NY:

AVERAGE CLOSING COSTS FOR BUYERS IN NEW YORK CITY, NY
(Based on $1.87 Million Purchase Price)
TOTAL CLOSING COSTS FOR NYC BUYER$68,748$25,550
Standard Closing Costs NYCFor Condo BuyersFor Co-Op Buyers
NYS/NYC Mansion Tax (1%)$18,700$18,700
Title Insurance$7,500NA
Buyer’s Attorney$2,500$2,500
Move-In Deposit$500$500
UCC-1 Filing FeeNA$100
For NYC Buyers Seeking Financing
NYC/NYS Mortgage Tax – (2.05-2.80%)$35,998NA
Bank Attorney Fee$750$750
Bank Loan Origination Fee$750$750
Appraisal$450$450
Mortgage Application & Processing Fee$500$500
Credit Report & Employment Verification$100$100
Title Search & Recording Fees$1,000$1,000
Financing/Recognition Agreement FeeNA$200
Additional Costs for Buying of New Construction in New York City, NY
NYC Real Property Transfer Tax (RPTT) & Filing Fee (1-1.425%)$26,748$26,748
NY State Transfer Tax (0.4%)$7,480$7,480
Seller’s Attorney Fee$2,500$2,500

Breakdown of New York City Closing Costs

New York City closing costs for buyers and sellers of condo and co-op apartments differ from one another, and so we have compiled a comprehensive guide that lists all of the standard closing costs for every scenario to help you come up with a more accurate estimate of how much you would need to pay for, whether you are in the market to buy or sell.

Closing Costs for Buyers in New York City, NY

Facade of New York City Apartment Buildings

  • Attorney Fee
  • Managing Agent Application Fee
  • Credit Report Fee
  • Lead-Based Paint Disclosure Fee
  • Mansion Tax – 1% of purchase price for property sale that exceeds $1 million
  • Move-In Deposit
  • Real Estate Taxes
  • Title Insurance – offers the buyer protection against any future claims made against the title for issues which were undiscovered at the time of the purchase when the original title search was conducted by the insurance agency
  • Condo Mortgage Associated Fees
  • Mortgage Tax
  • Recording Tax Sales – 1.8% of the entire mortgage for sale under $500,000; 1.925% for sale over $500,000
  • Application, Credit Check
  • Appraisal Fee
  • Bank Attorney
  • UCC-1 Filing
  • Recognition Agreement Fee
  • Lien Search
  • Fee Title Insurance
  • Mortgage Title Insurance
  • Recording Fees
  • Origination Costs
  • Departmental Searches
  • Real Estate Tax Escrow
  • New York City Property Transfer Tax – 1% of purchase price up to $500,000; 1.425% of purchase price over $500,000
  • New York State Transfer Tax – $4 per $1,000 of the purchase price
  • Sponsor’s Attorney Fee
  • Attorney Fee
  • Bank Fees
  • Application, Credit Check
  • Bank Attorney
  • Miscellaneous Bank Fees
  • UCC-1 Filing
  • Lien Search
  • Appraisal Fee
  • Credit Report Fee
  • Move-In Deposit
  • Recognition Agreement Fee
  • Maintenance Adjustment
  • Mansion Tax – 1% of purchase price for property sale that exceeds $1 million
Infographic Showing the Average Closing Costs For Buyers In New York City
Closing Costs for Sellers in New York City, NY

A Glance at Residential Apartments in New York City

  • Broker Fee
  • Seller’s Attorney Fee
  • New York City Property Transfer Tax – 1% of sales price for sales $500,000 or less; 1.425% of sales price for sales over $500,000
  • New York State Transfer Tax – $2 per $500 (or 0.4% of sales price)
  • Miscellaneous Title Company Fees (if seller has mortgage)
  • Move-Out Deposit or Fees
  • Managing Agent Fees
  • Broker Fee
  • Seller’s Attorney Fee
  • New York City Property Transfer Tax – 1% of sales price for sales $500,000 or less; 1.425% of sales price for sales over $500,000
  • New York State Transfer Tax – $2 per $500 (or 0.4% of sales price)
  • Flip Tax
  • Managing Agent Fees
  • Stock Transfer Tax
  • Payoff Bank Attorney (if seller has mortgage)
  • Move-Out Deposit or Fees

Buyer and Seller Shake Hands After a New York City Property Deal Has Been Closed

Strategies for Buyers and Sellers on How to Reduce Closing Costs in New York City, NY

1. Get a Rebate on Your Broker’s Fee

Aside from negotiating for a lower broker’s fee, it is best for buyers to work with a brokerage firm that offers a rebate on its commission to significantly reduce closing costs. For instance, you may opt to do some of the legwork, such as viewing properties without a broker and as a reward, you will be given a percentage of the commission paid to the broker at closing.

The same goes for sellers. At 5% to 6% of the sale price, a broker’s commission is the highest closing cost associated with selling an apartment in New York City. While negotiating for a lower broker’s fee is recommended, it is also good to consider working with a brokerage firm that rebates part of its commission to the seller.

2. Do Your Research

Being aware of the fees and charges involved at closing can greatly help you think of ways to structure the deal, to avoid certain fees and consequently minimize your total costs. Take the mansion tax, for example. Knowing that this is applicable for property purchases over $1 million would drive you to negotiate the sale price for less than this amount so that you would no longer be required to pay for additional fees.

3. Wait for a Resale in New Construction

Most buyers want to buy new construction, but new would always translate to a higher purchase price and, of course, higher closing costs. Instead of buying new, you may want to opt for a slightly used apartment or consider waiting for the first resale in new construction.

4. Take Your Time and Shop Around

Mortgage bankers can get quite competitive just to get your business, so take your time and see which of these would give you the most savings. While it is ideal to choose a mortgage based on the best interest rate, you will be amazed at how much more you can lower your closing costs by choosing the right loan officer. Some would even offer to cover some of the closing costs, like the credit check or UCC filing fee.

5. Delay Your Closing

You can minimize certain costs, such as pre-paid daily insurance charges, by delaying your closing at the end of the month. It pays to plan in advance and schedule your closing at the time when you can pay less money upfront.

To get an accurate estimate of your closing costs, for a property in New York City, please call us at 212.462.4766 or you may fill out our contact form below and we will get back to you the soonest possible time.

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