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EP 37: Closing Costs in NYC

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Closing Costs In NYC

The John and Jonathan Sell NYC Podcast: Episode 37

In this episode, John and Jonathan discuss everything to do with closing costs in NYC for both buyers and sellers.

What Are Closing Costs In NYC?

  • Closing costs in NYC are additional fees and taxes that are required to be paid at the time of closing.
  • Closing costs in NYC range between $5,000 on a co-op to over 10% for buyers, and between 7% – 10% for sellers.
  • Buyer closing costs in NYC are higher if you are purchasing new construction or you are financing your purchase with a mortgage, and are lower if you purchase a resale or co-op residential property.
  • Seller closing costs are higher if you’re selling a co-op, mostly due to the flip tax that many co-ops charge.

Buyer Closing Costs

  • Buyer closing costs generally fall between 1.5% – 10% of the purchase price, and may include:
    • Mansion Tax: A one-time tax of between 1% – 3.9% for all sales of $1M+, paid by buyers.
    • Mortgage Recording Tax: Around 2% of the total loan amount, excluding co-ops.
    • Title Insurance: A one-time fee of between  0.6% and up of the total purchase price paid at closing, excluding co-ops.
    • Buyer’s Attorney ($2500-$4000)
    • Additional Fees Relating To A New Development
      • NYC NYS Transfer Taxes
      • Developer’s Attorney’s Fee
      • Contribution to the reserve fund (1-3 months of common charges)
    • Other Costs
      • Seller’s Attorney Fee
      • UCC-1 Filing Fee
      • Bank Attorney Fee
      • Bank Loan Origination Fee
      • Appraisal
      • Mortgage Application & Processing Fee
      • Credit Report & Employment Verification
      • Title Search & Recording Fees

Seller Closing Costs

  • Seller closing costs generally fall between 7% – 10% of the sale price, and may include:
    • Real Estate Commission: Generally 5-6% of the total sale price.
    • NYC and NY State Transfer Taxes: Around 2% of the sale price.
      • NYC Real Property Transfer Tax rates are 1% for sales of $500k or less and 1.425% for sales above $500k.
      • The NYC Transfer Tax is usually paid by the seller, accompanied by a filing fee of $100.
      • New York State charges sellers a transfer tax of 0.4% of the sale price for sales of below $3M, and 0.65% of the sale price for sales above $3M.
    • Flip Taxes: Levied by some, but not all, co-ops, generally anywhere from 1% – 2% of the sale price.
    • Seller’s Attorney
    • Move Out and Deposit Fees
    • Additional Fees
      • Managing Agent Fee (for the closing itself)
      • Payoff Bank Attorney / Payoff Bank Fees / Loan Satisfaction Fee
      • Common Charge & Real Estate Tax Adjustment
      • UCC-3 Filing Fee ($50-$75)

Resources

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