Typical Closing Costs in New York City

-

When purchasing a property in New York City, knowing the closing costs involved in the transaction is crucial because understanding these costs will help you budget appropriately and avoid surprises at the closing table. Remember that closing costs can vary depending on the specifics of your transaction, so it's essential to work closely with your attorney, real estate agent, and lender to ensure you clearly understand your financial obligations.

In New York City, you must pay a mortgage recording tax when you obtain a mortgage. This tax varies based on the amount of your mortgage loan. The rates are as follows: For loans under $500,000: 1.8% of the mortgage amount. For $500,000 and above loans: 1.925% of the mortgage amount.

Title insurance protects the buyer and lender against any potential legal issues related to the property's ownership history. The cost of title insurance is based on the property's purchase price and can range from 0.5% to 1% of the purchase price. For example, on a $1,000,000 property, title insurance could cost between $5,000 and $10,000.  Once you know your purchase price and mortgage amount, your attorney and lender should be able to accurately calculate these numbers.  

The buyer and the seller each retain an attorney to handle the closing process. If there's a mortgage, the lender will also be represented by an attorney (who will be paid by the buyer).  Attorney fees can vary widely depending on the complexity of the transaction and the attorney's experience. In New York City, expect to pay between $1,500 and $5,000 for an experienced attorney's services.

Lenders usually require a property appraisal to determine the value of the property. Appraisal fees in New York City usually range from $400 to $800. In addition, a home inspection is typically recommended to identify any potential issues with the property for the buyer. Inspection fees can vary but expect to pay between $500 and $1,000 for a standard inspection. Make sure you hire a licensed inspector.

In New York City, properties with a purchase price of $1 million or more are subject to the mansion tax. This tax is based on a sliding scale, with rates starting at 1% for properties priced between $1 million and $1,999,999 and increasing to 3.9% for properties priced at $25 million or more.

Usually, the seller pays the transfer taxes, but in some cases, they may be negotiated as part of the purchase agreement. There are two types of transfer taxes in New York City: the New York State Transfer Tax and the New York City Transfer Tax. The state transfer tax is 0.4% of the purchase price, while the city transfer tax ranges from 1% to 2.625%, depending on the property type and purchase price.

Various other fees and costs are associated with closing a real estate transaction in New York City. These may include homeowners insurance for the first year, property taxes for the next quarter (as well as additional escrows for insurance and taxes if the lender will be making future payments), recording fees, title/owner/judgment/lien searches, bank fees, escrow service fees, and other administrative costs. Reviewing the closing disclosure statement provided by your lender, as it will detail all fees and expenses related to your transaction, is essential.

Put yourself in the best of hands - let Pete Weinman be your guide.

Location: Staten Island, NY 10314, USA

Comments

New comments are not allowed.

Popular posts from this blog

Things a Real Estate Attorney Doesn’t Want to Hear (Satire):

-
Image
Creative Fraud “My Loan Officer said I’m not allowed to get money back at closing, but they can write the check to you, you can put it in your escrow account, and then you can write the check to me.” “My parents are giving me the Down Payment as a gift, but after the closing I’m going to pay them back. That still counts as a gift, right?” “If I sign the Owner-Occupancy Affidavit at closing, how long do I actually have to live there?” “The Seller agreed to give me $15,000.00 after closing for repairs, but my Loan Officer said not to mention that in the Contract.” “My Mortgage Broker said that if the appraised value comes in low, we can just change the Contract price for the Bank and keep our real deal on the side.” “I know the funds need to be sourced, but if I deposit the cash in increments under $10,000.00, that should make things easier, right?” “In order to keep the price under a million, I’ll pay the Seller $100,000.00 for furniture so I can avoid the Mansion Tax.” “I am no longer ...
Read more

FinCEN's New Real Estate Reporting Rule: What Solos Need to Know

-
Image
For those of us who haven't been tracking it, the Financial Crimes Enforcement Network ("FinCEN") "Residential Real Estate Rule" is now live and reporting obligations begin for any closings that take place on or after March 1, 2026.  If you're handling a reportable transaction and there's no exemption, "someone" has to file a Real Estate Report with FinCEN - and that someone could be you. What triggers the reporting requirement, you ask? Any conveyance of residential real estate that's "all-cash" to an Entity.  "Residential real estate" includes 1-4 family dwellings, condos, co-ops, and even vacant land that the buyer intends to improve with any of the above.  "Entities" include LLCs, Corporations, Partnerships, and Trusts. "All-cash" includes financing by a non-bank lenders without anti money laundering obligations.  Exemptions Transfers at death (Will, Trust, Transfer on Death Deed ("TODD"...
Read more

New York State to Allow Transfer on Death Deeds (TOD Deeds) to Avoid Probate

-
Image
  Starting July 19, 2024, New Yorkers have a new way to transfer property after they die - Transfer on Death Deeds (TOD Deeds). This is great news because it lets you avoid the probate process, which can be time-consuming and expensive. Here's how TOD Deeds work: Name one or more people (beneficiaries) to inherit your property upon your death. The TOD Deed is recorded in the county where the property is located. Important: The TOD Deed doesn't take effect until you die, and you can change your mind and revoke it at any time during your lifetime. Benefits of TOD Deeds: Saves time and money by avoiding probate court. You can still sell, give away, or mortgage the property while you're alive. How to make a TOD Deed: Have the TOD Deed signed by two witnesses who see you sign it. Record the TOD Deed in the county where the property is located. Things to Keep in Mind: Beneficiaries inherit the property "as is," meaning they are responsible for any outstanding debts or ...
Read more