We came up with these definitions to go over every single cost outlined in these NYC Closing Costs Calculators. We hope you will find it helpful.
NYC Mansion Tax
The NYC Mansion Tax is a progressive buyer closing cost on sales of $1 million or more. It depends on the purchase price and ranges from 1% to 3.9% of the home price. There are a total of eight brackets. For instance, the lowest is 1% and applies to deals between $1 million and $2 million. At the top, the highest Mansion Tax bracket of 3.9% applies to residential property purchases over $25 million. Before 2019, this mansion tax was a fixed 1% interest rate for all deals over $1 million.
NYC Buyer’s Attorney Fees
The average real estate attorney fee for a purchase transaction in NYC is around $3,000. The flat fee rates will vary based on the complexity of the deal. For instance, legal fees can be as high as $5,000 for a more complicated deal and new developments. Buyers pay real estate attorney fees at closing, but some lawyers may negotiate for a half to be paid upfront and a half at closing. If you are buying a sponsor unit or new construction, the buyer usually covers the seller’s attorney fees (in addition to the Transfer Taxes). This is the reverse of a traditional private resale where sellers pay the Transfer Taxes and cover their attorney fees.
NYC Move-In Deposit & Fees
Most buildings charge buyers a (refundable) move-in deposit and a non-refundable move-in fee. These fees are non-negotiable since they are contractually based on the underlying management agreement.
NYC Board Application Fees
Most buildings in NYC charge buyers a non-refundable board application fee. The fee is collected upon submission of the board application along with move-in fees & deposits (from the buyer) and move-out fees & deposits (from the seller). Lastly, this fee is non-refundable: in other words, the
the buyer won’t receive this money back if rejected by the co-op board.
NYC Mortgage Recording Tax
The buyer pays this Tax: 1.8% for loan amounts under $500k and 1.925% for a mortgage over $500k, based on the amount of mortgage financing the purchase. However, the amount of the Mortgage can be reduced by negotiating a Purchase CEMA (“Consolidation, Extension, and Modification Agreement”) with the seller.
NYC Mortgage-Related Fees
NYC’s mortgage application or origination fee varies from $500 to $1,000. Sometimes. Some banks waive this fee as a favor to their premium clients. Besides, the average appraisal fee is ~$750 but can go up to $1,250 for higher price properties. Banks always hire a 3rd party appraiser. On top of that. Buyers also pay a Mortgage Recording Fee of about $200.
NYC Broker Commission
The standard real estate agent commission in NYC is around 6% of the sale price; sometimes, sellers negotiate it down to 5%. The main reason why commissions remain elevated in NYC is that most buyers work with a buyer’s agent. As a result, the typical 5% to 6% commission paid by the seller is split equally between the seller’s agent and the buyer’s agent. Sellers do not offer less than 2.5% to 3% to a buyer’s agent because it impacts the marketing of the listing. Concretely, sellers in NYC sign an exclusive listing agreement, which stipulates a fixed commission percentage paid at closing. The total commission is received by the listing agent instead of being split with a buyer’s agent for unrepresented buyers. As a result, buyers are encouraged to work with buyer agents because people perceived to be free since sellers are paying a fixed total commission for broker fees.
NYC Transfer Tax
The NYC Transfer Tax is a seller closing cost of 1% for sales under $500k and 1.425% for deals over $500k. On top of the NYC Transfer Tax, sellers in NYC also have to pay the New York State Transfer Taxes.
NY State Transfer Tax
The New York State Transfer Tax represents 0.4% for sales under $3 million and 0.65% for deals over $3 million. The higher rate of 0.65% starts at over $2 million for commercial transactions (and residential properties with four or more units).
NYC Seller’s Attorney Fee
The average real estate lawyer’s fee for a sale transaction in NYC is $3,000. The flat fee rates will vary based on the complexity of your real estate deal. Lawyer fees can go as high as $5,000 for more complicated transactions and new developments. Buyers typically pay for real estate attorney fees at closing. However, some lawyers may negotiate for half paid upfront, with the half at closing.
NYC Move-Out Deposit & Fees
Most buildings in NYC charge sellers a refundable move-out deposit and a non-refundable move-out fee. However, the seller may request an exception if the unit is vacant and ask these fees to be waived.
NYC Managing Agent Fee
This closing fee is a payment to the management company for the closing. This fee is generally upon submission of the application package.
NYC Bank Loan Satisfaction Fees
Most banks charge sellers this small closing cost as a fixed amount when paying off the mortgage balance with the net proceeds of the sale.
