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Closing Costs NYC

Closing costs for buyers and sellers in NYC can be substantial. Hauseit helps both buyers and sellers reduce closing costs, saving you thousands of dollars on your real estate transaction.

How can you save?

Sellers can save up to all 6% in agent commissions by listing agent-assisted FSBO or by working with a full-service agent for just 1%.

Buyers can save $20,000 or more on their purchase through a buyer broker commission rebate.

What are Closing Costs in NYC for Sellers?

Despite surging NYC property values and an overall real estate market that is very favorable to sellers, most NYC homeowners looking to sell are unable to maximize their overall profit when selling because of the extremely high closing costs in NYC.

Sellers in NYC can expect to lose between 8-10% of their sale price instantly when all closing costs, from broker fees to transfer taxes, are added together

In this article, we will identify and explain every single closing cost faced by a seller in NYC. We will base our example off of the NYC 2015 average sale price of $1.87 million and the reasonable scenario that the seller will be paying off an existing mortgage using a portion of the proceeds.

A typical NYC seller of a $1.87 million apartment can expect to pay between $153,178 (condo) and $181,728 (co-op) in closing costs! That is some serious money.

Closing Costs NYC - For Sellers

Closing Costs NYC – For Condo Sellers

$153,178 (8.19% of sale price)

Based on 2015 NYC average sale price of $1.87 million

NYC Closing Costs for Condo Sellers (based on $1.87m sale price):

  • NYC Broker Commission (6%) – $112,200
  • NYC Real Property Transfer Tax (RPTT) & Filing Fee (1-1.425%) – $26,748
  • NY State Transfer Tax (0.4%) – $7,480
  • Seller’s Attorney – $2,500
  • Move out Deposit & Fees – $2,000
  • Managing Agent Fee – $1,000
  • Bank Loan Satisfaction Fee – $500
  • Real Estate Tax / Common Charge Adjustment – $500
  • UCC-3 Filing Fee – $100
  • NYS Equalization Fee – $75
  • Residential Deed Transfer Fee – $75

Closing Costs NYC – For Co-Op Sellers

$181,728 (9.72% of sale price)

Based on 2015 NYC average sale price of $1.87 million

NYC Closing Costs for Coop Sellers (based on $1.87m sale price):

  • NYC Broker Commission (6%) – $112,200
  • NYC Real Property Transfer Tax (RPTT) & Filing Fee (1-1.425%) – $26,748
  • NY State Transfer Tax (0.4%) – $7,480
  • Seller’s Attorney – $2,500
  • Move out Deposit & Fees – $2,000
  • Managing Agent Fee – $1,000
  • Bank Loan Satisfaction Fee – $500
  • Real Estate Tax / Common Charge Adjustment – $500
  • UCC-3 Filing Fee – $100
  • NYS Equalization Fee – $75
  • Residential Deed Transfer Fee – $75
  • Co op Flip Tax (~1.5%) – $28,050
  • Co op Attorney – $500
  • Co op Stock Transfer Tax – $50

NYC Seller Closing Cost #1: $112,200 – NYC Broker Commission

A typical seller in NYC can expect to immediately lose 6% of his or her sale price through the standard 6% real estate agent commission charged by a listing agent. In the era before the internet and smart phones, the 6% broker commission was justified because agents actually had to work really hard to market your property by making calls and pounding the pavement with flyers and other traditional advertisements. There was no simple way to simply syndicate your listing on the internet to sites and databases like StreetEasy and RLS (REBNY Listing Service) and instantly market your property to the entire real estate community in just one click.

Despite all these advances in technology, NYC brokers today are still regularly charging their sellers 6%. Given the low inventory available to buyers, many listings which are properly syndicated to all the major websites and databases and professionally photographed simply sell themselves with very little ‘value add’ offered by the listing agent charging the NYC seller 6%.

Save money with Hauseit's 1% agent managed full-service seller service

We think that having a listing agent can be useful to the busy NYC home seller, but not if you are being charged 6%. If you are too busy to sell For Sale By Owner in NYC on your own, you may want to consider Hauseit’s 1% agent managed full-service seller option. It gives you all of the benefits of having a traditional 6% listing agent (like time savings and professional representation) but without the pain of having to write a check for $112,200 to the listing agent at closing.

Our solution more closely aligns the fees you pay with the value being added by the listing agent. NYC sellers shouldn’t have to pay the world’s highest agent commissions simply because the 6% commission is being multiplied by the highest average sale price in the country.

Even on a global scale, real estate commissions in the United States are egregious. Typical all-in commissions for home sellers in London and the United Kingdom are well below 3%.

List Full Service in NYC for just 1%

Save time and money by listing with a full-service, REBNY member listing agent for just 1% commission

Save up to 6% in NYC real estate commissions by listing FSBO and selling without a traditional broker

If you are selling in NYC and have the time and energy to manage the sale process on your own, you should definitely consider selling For Sale by Owner and eliminating the listing agent entirely from your home sale.

The formula for selling FSBO in NYC is a very simple one and it’s something most NYC brokers don’t want you to know. For a standard condo or co-op in Manhattan or Brooklyn, the formula is:

Successful FSBO Sale = Flat Fee Listing Service + Professional Photos + Realistic Listing Price + Professionalism

Flat Fee Listing Service

The internet has created a huge number of competing real estate property listing sites where you can advertise your listing. This fragmentation means that unless you are listed on every major real estate website, you run the risk of missing out on potential unrepresented buyers and possibly that one buyer who would have bought your property.

However, being listed on all of these real estate websites is easier said than done. In addition to the extraordinary amount of time it takes to manually list your property on every single website, many sites such as StreetEasy charge significant individual fees ($599) for listing your FSBO property.

Furthermore, as a non-agent it’s impossible for you to list your property yourself on the MLS (RLS for NYC customers). Without MLS access, you can expect to be ignored by the vast majority of buyers’ agents who are searching for properties for their clients. Poor listing syndication and lack of exposure to buyers’ agents is one of the top three reasons why NYC FSBO sellers fail.

Fortunately, Hauseit’s flat fee MLS listing service allows your property to be listed on dozens of major real estate websites and the MLS all at once for a low-flat fee and zero percent in seller broker commissions. It saves you time and money by offering you the comprehensive listing syndication power historically reserved for full-commission listing agents but without any of the traditional costs associated with having a listing broker.

List FSBO in NYC and Save up to 6%

Get full buyer exposure by listing on the NYC MLS (RLS), StreetEasy and over a dozen sites all at once

Professional Photographs

Making a condo or co-op marketable and attractive to buyers isn’t rocket science. When you put your home on the market, it’s going to be competing with traditional listings which almost always have stunning professional photographs.

You want these buyers to click on your listing and not the competition, so it’s a good idea for you to consider top-tier professional photography as well. Keep in mind that you are already saving $112,200 on average by listing FSBO. There’s no need to want to save an extra $300 and use your tablet or iPhone to take photos of your home.

Because your listing experiences the highest buyer traffic early on in the process, it’s important you start your listing from day one with professional photographs. You don’t want to be that FSBO seller who cuts corners initially only to eventually need to relist your home in NYC and pay for photos but miss out on the benefits from having them earlier on in the process.

buying a coop without a broker in nyc

Realistic Listing Price

As a FSBO seller, it’s also important to correctly price your listing from day one. Going to market with the wrong listing price could literally determine your success or failure before you’ve even started showing your property. We’ve seen many instances of FSBO sellers going to market with an overpriced listing and then 3 months later re-listing their property with an agent for a lower price.

Before listing, many FSBO sellers prepare their own comparative market analysis so that they may price their listing in line with the reality of the current market. Hauseit’s Agent Managed Listing service also offers complementary CMA pricing consultations with affiliated licensed real estate salespeople.

Professionalism

Just because you are selling FSBO in NYC doesn’t mean you should repudiate all brokers and not treat them courteously. The reality is that buyers’ agents control 90% of all buyers in NYC, and they can be very helpful to you in getting your property sold. Being off-putting or aggressive towards buyers’ agents just because you want to sell to an unrepresented buyer may hurt you in the end if your buyers end up coming through these agents. Therefore, we suggest you be courteous and helpful towards buyers’ agents throughout the FSBO sale process, even if you’d (obviously) prefer to sell to an unrepresented buyer for zero commission all around.

NYC Seller Closing Cost #2: $26,748 - Real Property Transfer Tax (RPTT)

New York City levies a tax on the sales, grants, assignments, transfers or surrenders of real property in NYC. The NYC Real Property Transfer Tax (RPTT) is a tax of 1%-1.425% on residential real estate transactions. The NYC Transfer Tax is typically paid by the seller along with a RPTT filing fee of $100.

  • 1% of the sale price: For home values below $500,000

  • 1.425% of the sale price: For home values above $500,000

Please keep in mind that if you are selling 2+ un-attached units to your buyer at the same time, you are required to pay the commercial RPTT rates:

  • 1.425% of the sale price: For sale values below $500,000

  • 1.625% of the sale price: For sale values above $500,000

NYC Seller Closing Cost #3: $7,480 - NY State Transfer Tax

New York State also charges home sellers a transfer tax of 0.4% of the sale price. The full NY State Transfer Tax is due and payable along with form TP-584 no later than the 15th day after the delivery of documents.

NYC Seller Closing Cost #4: $2,500 – Seller’s Attorney

It’s highly recommended that NYC sellers obtain top notch legal representation when completing the home sale process. Given the various legal risks and documentation requirements required of the seller, it’s a no brainer to hire an attorney so that you may sleep easy at night. You may be able to find a lawyer who charges less than one thousand dollars, however we advise you to proceed with caution. Having questionable, low-quality representation could cost you thousands of dollars down the road. We are in touch with fairly priced and proven, highly-experienced real estate attorneys if you need an introduction.

Furthermore, many of our attorney partners have agreed to friends and family discounts and additional help (i.e. board package preparation) for Hauseit customers. It’s important to have an attorney lined up ideally before you submit an offer. This way your buyer agent can credibly say that you are ready to move fast with an attorney on standby who can review the purchase contract ASAP.  Contact us today for an introduction to a local expert!

Closing Costs NYC

NYC Seller Closing Cost #5: $2,000 - Move Out Deposit & Fees

The specific amount of move out related deposits and fees varies by building, however it’s fair to budget around $1,000 for a refundable move-out deposit and another $1,000 in potential non-refundable move out fees levied by your condo or co-op.

NYC Seller Closing Cost #6: $2,250 - Assortment of Random Additional Fees

As a NYC seller, you will also face another random assortment of fees to complement the more substantial fees and taxes described above. The additional NYC seller closing costs can include:

  • $1,000 – Managing Agent Fee

  • $500 – Payoff Bank Attorney / Payoff Bank Fees / Loan Satisfaction Fee, which is levied by your mortgage provider upon paying down the remaining loan amount

  • $500 – Common Charge & Real Estate Tax Adjustment, which is the seller’s reimbursement of the purchaser for the percentage of common charge fees and/or real estate taxes which the seller is liable for during the transfer

  • $100 – UCC-3 Filing Fee

  • $75 – New York State Equalization Fee

  • $75 – Residential Deed Transfer Fee (or non-deed co-op transfer fee)

NYC Seller Closing Cost #7: $28,600 - Co-op Seller Fees

NYC Co-Op Seller Additional Closing Cost #1: $28,050 - Flip Tax

The dreaded NYC co-op flip tax is a non-deductible transfer fee payable to the co-op upon the sale of a unit within the building. For our example above, we will assume a standard flip tax rate of 1.5% of the sale price. Flip taxes come in many shapes and forms, however they generally will appear in one of the following formats:

  • Flat fee flip tax

  • Percentage of your sale price

  • Percentage of the net profit earned on your sale

  • A fixed fee which varies depending on your length of ownership

  • A per share amount, which is based upon the per share flip tix figure multiplied by the number of co-op shares assigned to your unit

  • Combined method, which incorporates one more of the above approaches

Co-op flip taxes are legally permitted provided that the flip tax details are present in the co-op’s proprietary lease or if the flip tax has been added as an amendment to the lease through the approval of more than 67% (2/3rds) of shareholders of the co-op.

Does it seem fair that sellers of co-ops must give away a portion of their profits to the co-op? We don’t think so. However there is a historical reason why most if not all co-ops in NYC levy a fee to their departing residences. During the rental conversion boom in the 1970s and 1980s, sponsors were faced with the challenge of poorly maintained buildings as well as long term rent controlled residents who could not afford to purchase a unit in the building. As a result, the conversion sponsor offered many of their rent controlled tenants the ability to purchase units in the building at substantially below-market prices.

As the converted rental tenants often made substantial profits during a sale, the co-ops decided to levy a flip tax on the beneficiaries of these profitable sales in order to fund the much needed improvements to the building for the long-term, committed residents. The original conception of the flip tax was as a temporary tax on quick flip sellers to fund renovations, however co-ops soon began making them permanent once they realized the size of the recurring revenues they could generate for the building.

Most of the time, the flip tax is paid by sellers. However, depending on building rules and the current state of the market (buyers’ or sellers’ market), the buyer may opt to pay the flip tax instead of the seller.

NYC Co-Op Seller Additional Closing Cost #2: $550 - Random Extra Fees

  • $500 – Co-op Attorney Fee

  • $50 – New York State Stock Transfer Tax, which consists of a tax levied by NYS of $0.05 per unit of stock being sold. While the number of co-op shares owned by sellers can vary widely, we’ve estimated $50 all in for the New York State stock transfer tax associated with our hypothetical NYC home sale

How can you reduce your Seller Closing Costs in NYC?

With the growth of the For Sale By Owner market in NYC led by Hauseit, NYC home sellers can now successfully navigate their home sale process without a listing agent and therefore cut out the most expensive component of the home sale process – the standard NYC 6% listing agent commission.

We offer you all the individual tools a FSBO seller needs to successfully manage on his or her own. Even if you end up selling to a buyer through a buyers’ agent (they charge 1-3%), you would still save the other 3% commission which would have been paid to the listing agent.

Sellers who want to hire an agent but don’t want to pay 6% should consider our 1% full service listing option. It offers you the same level of service as a traditional broker charging 6% but for a fraction of the cost.

List FSBO in NYC

List Full Service for 1%

What are Closing Costs in NYC for Buyers?

As a buyer in NYC, your closing costs are substantial and can end up being 2-4% of your purchase price if you are buying existing construction. Closing costs for buyers who purchase new construction units directly from a sponsor are even higher and can range from 5 to 6 %.

Fortunately, through our Broker Commission Rebate program you can save 1% on your home purchase, regardless of whether you purchase new or existing construction, and immediately use that money to lower your closing costs.

NYC home buyers pay between 3.7% (condos) and 1.4% (co-ops) in closing costs for purchases of existing construction units. For new construction, closing costs for NYC buyers balloon to 5.6% (condos) and 3.3% (co-ops)

Fortunately, NYC buyers who use Hauseit’s home buyer discount program can save 1% in closing costs.

Closing Costs NYC – For Buyers

Closing Costs NYC – For Condo Buyers

$68,748 (3.7% of sale price)

Savings with Hauseit’s buyer rebate: $18,700

Final Closing Costs: $50,048 (2.7% of sale price)

Based on 2015 NYC average sale price of $1.87 million
Purchase of existing construction with a mortgage

NYC Condo Buyer Closing Costs (based on $1.87m purchase price):

  • NYS/NYC Mansion Tax (1%) – $18,700
  • Title Insurance – $7,500
  • Buyer’s Attorney – $2,500
  • Move-In Deposit – $500

For NYC Buyers Seeking Financing (based on $1.87m purchase price):

  • NYC/NYS Mortgage Tax – (2.05-2.80%) $35,998
  • Bank Attorney Fee – $750
  • Bank Loan Origination Fee – $750
  • Appraisal – $450
  • Mortgage Application & Processing Fee – $500
  • Credit Report & Employment Verification – $100
  • Title Search & Recording Fees – $1,000
Additional Costs for Buying of New Construction in NYC:
  • NYC Real Property Transfer Tax (RPTT) & Filing Fee (1-1.425%) – $26,748
  • NY State Transfer Tax (0.4%) – $7,480
  • Seller’s Attorney Fee – $2,500

Closing Costs NYC – For Co-Op Buyers

$25,550 (1.4% of sale price)

Savings with Hauseit’s buyer rebate: $18,700

Final Closing Costs: $6,850 (0.4% of sale price)

Based on 2015 NYC average sale price of $1.87 million
Purchase of existing construction with a mortgage

NYC Co-op Buyer Closing Costs (based on $1.87m purchase price):

  • NYS/NYC Mansion Tax (1%) – $18,700
  • Buyer’s Attorney – $2,500
  • Move-In Deposit – $500
  • UCC-1 Filing Fee – $100

For NYC Buyers Seeking Financing (based on $1.87m purchase price):

  • Bank Attorney Fee – $750
  • Bank Loan Origination Fee – $750
  • Appraisal – $450
  • Mortgage Application & Processing Fee – $500
  • Credit Report & Employment Verification – $100
  • Title Search & Recording Fees – $1,000
  • Financing/Recognition Agreement Fee – $200
Additional Costs for Buying of New Construction in NYC:
  • NYC Real Property Transfer Tax (RPTT) & Filing Fee (1-1.425%) – $26,748
  • NY State Transfer Tax (0.4%) – $7,480
  • Seller’s Attorney Fee – $2,500

NYC Buyer Closing Cost #1: $18,700 – New York State / NYC Mansion Tax

The New York City mansion tax applies to the sale of property valued at or above $1 million. The amount of the mansion tax is 1% of the purchase price and is customarily paid by the buyer in the transaction.

The mansion tax threshold of $1 million has not been raised since the tax was initiated in 1989, when NYC was faced with recession and a budgetary deficit. Adjusted for inflation, $1 million in 1989 is worth approximately $1.92 million in today’s dollars. While there are currently discussions underway to raise the ‘mansion tax’ threshold to $1.75 million and also institute a mega mansion tax for sales over $5 million in order to fund the construction of affordable housing units, nothing has been finalized yet.

Pro Tip: Eliminate the 1% Mansion Tax with a buyer’s broker commission rebate. The typical NYC buyer agent commission rebate can save you $20k or more on your purchase, more than paying for your New York City mansion tax bill.

NYC Buyer Closing Cost #2: $7,500 – Title Insurance (Condo only)

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. In the event that you are financing your purchase, title insurance would consist of two parts: a lender’s policy, which covers the amount of the loan exposure and declines over time as you make payments, and an owner’s policy, which is taken out for the full purchase price and does not decline over time.

The costs of title insurance in New York State can be substantial. There are many factors which contribute to this, although the primary reason is overall lack of competition in the industry. As of 2015, New York State is currently looking into ways to increase competition and reduce the price for consumers.

Since co ops do not have physical titles, buyers of these units can avoid title insurance completely. For NYC co op buyers, the combination of not having to pay for title insurance or the NYC/NYS Mortgage Tax (in the event a bank loan is needed) means that co op buyer closing costs in NYC are substantially lower than for condos.

NYC Buyer Closing Cost #3: $2,500 – Buyer's Attorney

As is the case for sellers, It’s highly recommended that NYC home buyers obtain top notch legal representation when completing the home purchase process process. Given the various legal risks associated with such a large purchase, it’s a no brainer to hire an attorney so that you may sleep easy at night. You may be able to find a lawyer who charges less than $2,500, however we advise you to proceed with caution. Having questionable, low-quality representation could cost you thousands of dollars down the road. We are in touch with proven, highly-experienced real estate attorneys if you need an introduction.

Hauseit For Sale By Owner Real Estate Lawyer

NYC Buyer Closing Cost #4: $500 – Buyer Move-In Deposit

Depending on the rules of the condo or co-op in which your unit is located, you may be required to make a refundable ‘move-in’ deposit. You can generally expect to recover this money in the future, however as it is a required cash outlay it’s worth budgeting for in your purchase calculations.

NYC Buyer Closing Cost #5: $39,748 - Additional Fees for Buyers Seeking Financing

NYC Buyer Additional Financing Closing Cost #1: $35,998 - NYC Mortgage Tax (Condo only)

The NYC/NYS Mortgage Tax is levied on the total amount of the mortgage for the purchase of real property (condos, townhouses and homes) at the following rates:

  • Mortgages below $500,000 = 2.05% of borrowed amount

  • Mortgages over $500,000 for 1-3 family residential unit and individual residential condo units = 2.175%

  • Mortgages on all other property over $500,000 = 2.80%

Please note that these figures include the NYS mortgage tax of 0.5% in addition to additional NYC-specific mortgage tax elements. Fortunately, buyers of NYC co-ops are exempt from the Mortgage Recording Tax because co-op owners hold shares in a building instead of owning real property with a deed.

NYC Buyer Additional Financing Closing Cost #2: $3,750 - Collection of Additional Fees

NYC home buyers who will be financing the purchase can also expect to pay most if not all of the additional costs below:

  • $750 – Bank Attorney Fee

  • $750 – Bank Loan Origination Fee

  • $450 – Property Appraisal Fee

  • $500 – Mortgage Application & Processing Fee

  • $100 – Credit Report & Employment Verification Fee

  • $1000 – Title Search & Recording Fees

  • $200 – Financing / Recognition Agreement Fee (Co-op only)

NYC Buyer Closing Cost #6: $36,728 - Extra Fees for Purchases of New Construction Units

NYC home buyers who purchase new construction directly from sponsors are also responsible for costs which are normally paid by the Seller for existing construction units. They include the following:

  • $26,748 – NYC Real Property Transfer Tax (RPTT) & Filing Fee

  • $7,480 – NY State Transfer Tax

  • $2,500  – Seller’s Attorney Fee

NYC Buyer Closing Cost #7: $100 - Extra Fee for Purchase of NYC Co-ops

  • $100 – (Co-op Only) UCC-1 Filing Fee

How can you reduce your Buyer Closing Costs in NYC?

As a homebuyer in NYC, you can easily reduce your closing costs by 1% by taking advantage of Hauseit’s NYC home buyer discount service.

In NYC, sellers generally pay a fixed commission regardless of whether you are represented or not.  Therefore, the cost of your representation is included in the sales price whether you choose to have it or not!

Despite the concern of industry insiders about reduced profits for NYC brokers, incentives like Hauseit’s home buyer cash back program in NYC are growing in popularity after New York State’s recent publicity campaign to encourage buyers’ agent commission rebates as a way to reduce overall costs to buyers and sellers of residential real estate.

Save 1% on your NYC home purchase through a broker commission rebate