New York City Closing Costs: Sky High for New Developments

It amazes me how many people begin the process of shopping for or selling a property and are completely unfamiliar with the costs associated with doing so.  For those who are buying in new development projects, pay particular attention to these numbers as you will likely be paying NYC and NY State transfer taxes as well as other seller fees and expenses such as the cost of the seller’s attorney.  Here is a good summary of closing costs from the Prudential Douglas Elliman web site that will give you a rough idea of what your sale or purchase may cost:

For Condominiums:

For the Seller

• Broker: Typically 6%
• Own Attorney: Consult your attorney
• Processing Fee: $450+
• NYC Transfer Tax: 1% of price up to $500,000; or, 1.425% of price if $500,000 and over.
• NY State Transfer Tax: $4 per $1,000 of price
• Miscellaneous Title Fees: $200-$500
• Payoff Fee to Title Closer: $100-$300
• Miscellaneous Condominium Charges: Vary by building

  Note: For condominiums in new developments, the Purchaser will pay costs normally paid by the Seller. These include Seller attorney fees as well as NY and NYC Transfer Taxes.

For the Purchaser

• Buyer’s Attorney: Consult your attorney
• Bank Fees: $750
• Application Fee: $500
• Appraisal Fee: $300-$1,500 (depending on sales price)
• Credit Report Fee: $9.80 single/$14.60 joint
• Bank Attorney: $750-$850
• Tax Escrows: 2 to 6 months
• Recording Fees: $250-$750
• Mortgage Tax: 1.80% of amount of mortgage on loans under $500,000; or 1.925% of amount of mortgage on loans of $500,000 and over
• Fee Title Insurance: Approx. $450 per $100,000 of sales price under 1m – +15% on 1M or more
• Mortgage Title Insurance: Approx. $130 per $100,000 of mortgage amount
• Municipal Search: $350-$500
• Mansion Tax: 1% of entire purchase where price is $1,000,000 or more.

  ADDITIONAL REAL ESTATE EXPENSES

• Common Charge Adjustment: Pro-rated for the month of closing
• Real Estate Tax Adjustment: Pro-rated depending on when the tax is collected
• Miscellaneous Condominium Charges: Vary by building
• Short Term Interest: Equal to interest for balance of month in which you close

For Co-ops:

For the Seller

• Broker: Typically 6%
• Own Attorney: Consult your attorney
• Co-op Attorney: $450+
• Flip Tax: Typically 1% to 3% of price (if applicable)
• Stock Transfer Tax: $0.05 per share
• Move-out Deposit: Varies by building
• NYC Transfer Tax: 1% of price up to $500,000; or 1.425% of price if $500,000 and over.
• NY State Transfer Tax: $4 per $1,000 of price
• Pick-up / Payoff Fee: $250-$500
• UCC-3 Filing Fee: $100
• Miscellaneous Coop Charges: Vary by building

For the Purchaser

• MORTGAGE CLOSING COSTS (ask your bank and/or mortgage broker and read your Good Faith Estimate and these tips
• Buyer’s Attorney: Consult your attorney
• Bank Fees: $350-$750
• Application Fee: $350
• Processing Fee: $280
• Appraisal Fee: $300-$1,500 (depending on sales price)
• Credit Report Fee: $9.80 single/$14.60 joint
• Bank Attorney: $750-$850
• Lien Search: $250-$350
• UCC-1 Filing: $100
• Mansion Tax: 1% of entire purchase price where price is $1,000,000 or more.

  ADDITIONAL REAL ESTATE EXPENSES

• Miscellaneous Co-op Charges: Vary by building
• Recognition Agreement Fee: $200+ (best explanation of Recognition Agreements from Braverman & Associates, P.C.
• Maintenance Adjustment: Pro-rated for the month of closing
• Short Term Interest: Equal to interest for balance of month in which you close

And that’s about it.  Again, this is an estimate of closing costs and in no way represents a completely accurate indicator of your particular situation.  Consult your attorney, broker, bank and mortgage broker to confirm your costs.  And please don’t forget to read your Good Faith Estimate but it’s best to review the HUD-1 Settlement Statement for the most precise indication of your costs.

UPDATE:  Micky pointed out that I forgot multi-family closing costs for NY