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How Much are Closing Costs in NY?

If you want to be a homeowner in NY, you should know how much closing costs are in NY. This will give you an idea of how much to budget in order to own a home in New York.

Closing costs in New York are different for the buyer and seller. Industry practice provides that the seller pays for certain costs, while the buyer has the responsibility for the other costs. Generally, the seller should budget 8% to 10% of closing costs, which includes the agent’s real estate commission, while buyers’ closing costs range from 1.5% to 6%. Despite the fact that it is customary for buyers and sellers to pay certain costs according to industry practice, the parties can still negotiate. For example, in a buyer’s market, the seller can agree to shoulder some of the buyer’s costs, while in a seller’s market, it is the buyer who will agree to take on some of the seller’s costs.

If you are purchasing property through a mortgage, the bank will provide you with a Loan Estimate that includes the estimated closing costs. When you are nearing closing, this Loan Estimate will be updated with the final actual costs to be reflected in the Closing Disclosure.

The Closing Disclosure is mandated by law and one of the most important real estate documents in closing. You must review this with your attorney so you can understand each and every cost involved in buying a home.

How to save on closing costs

Your attorney can help you negotiate some closing costs. In addition, you can shop inquire about the rates of the different vendors to get the best price. For appraisers, ask your bank if you can find your own licensed appraiser. You can also get your own homeowner’s insurance and title insurance to get the best price.

For new developments, check to see if the developer is willing to pay for the transfer tax, attorney fees and other miscellaneous costs. If not, try to negotiate a lower price.

Talk to the seller to see if you can keep the purchase price under $1 million so you don’t have to pay the mansion tax. Shop around with the different loan companies to see which costs the loan company is willing to cover.

A good real estate attorney will be able to guide you through this process.

Seller’s closing costs

Generally, the seller’s closing costs include the following:

  • Broker’s commission
    • Ranges from 4% to 6% of the purchase price
  • Transfer taxes
    • New York City transfer tax (in addition to New York State transfer tax if purchasing in New York City)
      • 1% of sale price for residential properties up to $500,000
      • 425% of sale price for residential properties greater than $500,000
    • New York State transfer tax
      • $4 for every $1000 of the sale price for properties below $3M
      • For new developments, this tax is paid by the buyer.
    • Attorney’s fees
      • Ranges from $1500 to $4000
    • County recording fees
      • Ranges from $50 to $100
    • Pickup Fee to Title Closer
      • Estimated $250
    • Additional closing costs for selling a co-op in NYC:
      • Moving out fees
        • Ranges from $500 to $1000
      • UCC-3 filing fee
        • Ranges from $75 to $125
      • Flip tax/fee
        • 1% to 3% of purchase price
      • Co-op attorney’s fees
        • Estimated $450
      • Transferring agent fee
        • Ranges from $250 to $700
      • Additional closing costs for selling a condo in NYC:
        • Waiver Application fee
          • Ranges from $250 to $750
        • Moving Out Fees
          • Ranges from $500 to $1000
        • UCC-3 filing fee
          • Ranges from $75 to $125
        • Condominium Attorney Fee
          • Estimated $500
        • Miscellaneous condo closing fees
          • Ranges from $200 to $300

Buyer’s closing costs

The buyer’s closing costs will generally include the following:

  • Mortgage recording tax (if buying using mortgage, based on mortgage amount and not purchase price, does not apply to co-ops)
    • 8% of the mortgage for a mortgage amount less than $500,000
    • 925% of the mortgage for a mortgage amount $500,000 and more
  • New York City mansion tax (if property is in NYC and more than $1,000,000)
    • Progressive tax rate (1% to 3.9%) depending on purchase price, starting at 1% for purchase price ranging from $1 million to $1.999 million (as of 2022)
  • New York State mansion tax (if property is outside NYC and more than $1,000,000)
    • 1% of purchase price
  • New York State transfer tax (for new developments)
  • Title insurance fee
    • 4% to 0.45% of the purchase price
  • Mortgage insurance title fee
  • Attorney Fees
  • Bank and title fees (for buyers seeking financing)
    • Loan fees
    • Bank attorney
    • Appraisal fee
    • Mortgage Application & Processing Fee
    • Title search and recording fees
    • Credit report and employment verification
  • Additional co-op costs:
    • UCC-1 Filing Fee
    • Move-in deposit
  • Other fees not included in closing costs but may be required prior to closing:
    • Home inspection
    • Homeowner’s insurance
    • Prepaid daily interest
    • Property survey
    • Property tax escrow

Depending on the circumstances of your case, some costs will be applied, while others will not. A good real estate attorney can help you navigate the process of selling or purchasing a home and may lower your closing costs in the end. Should you need assistance in selling or purchasing a home, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at attorneyalbertgoodwin@gmail.com.