How Much Are New Construction Closing Costs in NYC?

New construction closing costs in NYC for buyers are 4% to 6% of the purchase price. A typical financed buyer on a new development condo purchase in NYC will pay closer to 6% in total closing costs. Buyer closing costs for new construction are higher than for traditional resales in NYC. 

The extra buyer closing costs for new construction in NYC include the NYC Transfer Tax (1% to 1.425%), NYS Transfer Tax (0.4% to 0.65%), sponsor attorney and document fees in addition to any working capital and/or super apartment contribution related to the specific new development you’re buying into.

Estimate your New Construction Closing Costs in NYC using Hauseit’s Interactive New Development Closing Cost Calculator for Buyers.

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Are New Construction Closing Costs in NYC Negotiable?

The negotiability of new construction closing costs in NYC varies by development. Sellers will usually show little or no wiggle room on sponsor closing costs if the building’s sales are healthy and progressing on time. If on the other hand a new development has a large number of unsold units and the market is soft, a sponsor (developer) may be willing to cover all new construction related buyer closing costs and possibly offer additional incentives.

The most commonly negotiated closing costs for new construction in NYC include the NYC & NYS Transfer Tax and sponsor attorney, document and closing related fees. In an especially weak market, a sponsor may also be open to covering the buyer’s Mansion Tax or perhaps some number of months or years of common charges or real estate taxes.

A developer may also offer to include a storage unit (or less commonly, a parking spot) at no cost depending on the attractiveness of your offer terms.

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What Are the Extra Closing Costs for New Construction in NYC?

The extra buyer closing costs for new construction in NYC include the NYC Transfer Tax (1% to 1.425%), NYS Transfer Tax (0.4% to 0.65%), sponsor attorney and document fees in addition to any working capital and/or super apartment contribution related to the specific new development you’re buying into.

Typical sponsor attorney, document and closing related fees range from $2,000 to $5,000. Closing related fees are typically higher if you wish to close at your own attorney’s office, if you adjourn (delay) the closing and if you’re also purchasing a storage unit or a parking space.

Here is an example of how sponsor attorney fees are structured in the Offering Plan for a new development:

Each purchaser shall pay a closing fee of $2,800 per Apartment Unit, to Sponsor’s counsel; if, however, the Purchaser does not close on the date designated for the transfer of title to his/her Unit and such closing must be adjourned to a subsequent date, the Purchaser shall pay to Sponsor’s counsel an additional closing fee of $350, as well as an additional fee in the amount of $350 for each default letter that Sponsor’s counsel shall serve; further, if the Purchaser assigns the Purchase Agreement (which assignment cannot be made without Sponsor’s consent), then the Purchaser shall pay to Sponsor’s counsel an additional closing fee of $350; finally, if the closing takes place out of the office of Sponsor’s attorney, then an additional closing fee of $350 payable to Sponsor’s counsel, will be paid by purchaser.

New construction related closing costs are payable in addition to all other standard buyer closing costs in NYC which include the following:

  • Mortgage Recording Tax (1.8% to 1.925%)

  • Mansion Tax (1% to 3.90%)

  • Title Insurance (0.4% to 0.45%)

  • Purchaser’s Attorney Fees

  • Bank Related Fees

  • Building & Filing Fees

Pro Tip: Estimate your New Construction Closing Costs in NYC using Hauseit’s Interactive New Development Closing Cost Calculator for Buyers.

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

How to Reduce New Construction Buyer Closing Costs in NYC

Save up to 2% when buying a new construction apartment in NYC by requesting a Hauseit® Buyer Closing Credit. Our experienced partner brokers guide you through the home purchase process for free, then split up to 2% of the buyer agent commission with you post-closing. Work with a highly rated, traditional, full-service broker who never openly discounts their services. Their discretion means more cooperation, less disruption and better execution for you.

Pro Tip: Estimate your Mansion Tax bill in NYC using Hauseit’s Interactive Mansion Tax Calculator.

What Else Can Be Negotiated with New Construction in NYC?

We’ve seen buyers negotiate storage units, parking spaces, common charges and real estate taxes and the installation of a kitchen range hood in addition to negotiating closing costs such as NYC & NYS Transfer Taxes, sponsor attorney fees and the Mansion Tax on a new development purchase.

The negotiability of a specific new development is determined by market conditions and how the building is performing relative to its sales targets. There may be zero negotiability on a popular new development with only a few units remaining. If, on the other hand, a developer has hundreds of unsold units and market conditions are poor, their starting offer may include covering all sponsor related closing costs and perhaps up to 10 years of common charges.

An experienced buyer’s agent can help you evaluate market conditions and strategically negotiate all components of a new development transaction, including the purchase price, closing costs and other possible incentives such as a storage unit or a parking space.

Pro Tip: Estimate the net proceeds from your sale with Hauseit’s Interactive Net Proceeds Calculator.

NYC New Construction Closing Costs Example ($2.95m, All Cash)

    • NYC Transfer Tax (1.425%): $42,038

    • Mansion Tax (1.25%): $36,875

    • Title Insurance (0.45%): $13,275

    • NY State Transfer Tax (0.4%): $11,800

    • Working Capital Contribution: $5,000

    • Super Apartment Contribution: $5,000

    • Sponsor Attorney & Document Fees: $3,000

    • Buyer’s Attorney Fee: $3,000

    • Other Closing Costs: $3,000

    • Total: $122,988 (4.2%)

A Full Service Listing for 1%

Sell your home with a traditional full service listing for just one percent commission.

NYC New Construction Closing Costs Example ($1.5m, 20% Down)

    • Mortgage Recording Tax: $23,100

    • NYC Transfer Tax (1.425%): $21,375

    • Mansion Tax (1%): $15,000

    • Title Insurance (0.55%): $8,250

    • NY State Transfer Tax (0.4%): $6,000

    • Sponsor Attorney & Document Fees: $3,000

    • Working Capital Contribution: $3,000

    • Super Apartment Contribution: $3,000

    • Buyer’s Attorney Fee: $3,000

    • Bank Fees: $3,000

    • Other Closing Costs: $3,000

    • Total: $91,725 (6.02%)

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

Posted: 12/11/19
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 148 Lafayette Street, New York, NY 10013.

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