New York City Real Estate Closing Costs
Condo closing costs differ depending on whether you are purchasing a resale or a sponsor unit.
To purchase an apartment or brownstone in New York City, you will generally need a 20% down payment if it is your primary residence and 30% down if it is an investment property. While those are substantial amounts of cash to have on hand, you will need just a touch more to cover closing costs.
Depending on the property value, and whether it is a resale from an owner or a sponsor sale, you should have 3% to 5.5% extra cash on hand to cover these closing costs, specifically for condomiunums.
Nuances tend to occur based on price point, mortgage value and selling party. For instance, when buying from a developer (sponsor), the New York City + New York State transfer tax is paid by the buyer and not by the seller. When properties are $500,000 and lower, the transfer tax is 1.4%. When the sales price is above $500,000 then the transfer tax is 1.825%.
If the mortgage is above $500,000, then the mortgage tax increases from 1.80% to 1.925%. Also, if the property is above $1,000,000, buyers are levied with a 1% mansion tax.
So remember, on the low end, assuming you are financing, you should be looking at about 3% in extra closing costs. On the high end, assuming you are buying above the million dollar price point and are also purchasing directly from a developer, you should be prepared to have approximately 5.5% in cash available for closing costs.
Co-Ops have lower closing costs than condos.
Since in a co-op you are actually purchasing shares in a corporation as opposed to the physical property, there are several fees that are waived from the closing costs that a condo or townhouse buyer would need to consider. The fees that can be eliminated from a co-op purchase are the mortgage taxes and the title insurances. In total, this shaves nearly 2% off closing costs when it comes to buying a co-op. This mean that this is 2% less cash that you would need on hand to close on this type of property.
Each situation is unique and requires a conversation with your real estate broker and real estate attorney.
Also, it's important to note that as a buyer you will not be paying the broker fees. The seller pays broker fees.
Below is a breakdown of some of the fees involved for New York City real estate closing costs:
|Buyer’s Attorney||$1,500 - $2,500|
|Bank Fees||$2,000 - $3,000|
|Appraisal Fee||$300 - $1,500 (depending on apartment cost)|
|Credit Report Fee||$10.10 single/$15.20 joint|
|Bank Attorney||$650 - $750|
|Tax Escrows||2 to 6 months|
|Recording Fees||$250 - $750|
|Fee Title Insurance||Contact your real estate lawyer|
|Mortgage Title Insurance||Contact your real estate lawyer|
|Municipal Search||$350 - $500|
|Mansion Tax||1% of entire purchase where price is $1,000,000 or more|
|Transfer Tax (for new development only)|
|Property Value $500,000 or less||1.4%|
|Property Value over $500,000||1.825%|
|NYC Mortgage Tax (paid by borrower)|
|a. Mortgage less than $500,000||1.80%|
|b. Mortgage $500,000+||1.925%|
Do you have further questions about closing costs? Contact us and we'll be in touch with you shortly.