Estimated closing costs are valuable for a buyer to avoid surprises at the closing table. Whether you're looking to buy your first home or sell your fifth, understanding the various New York City closing costs is helpful as you explore options.

If you’re starting your search and wondering how to calculate closing costs, I’ve tried to clarify what is fixed and what is variable. Until you have a specific property selected, you can’t know exactly what these costs will be. Look at these as a range. Once you have a specific property in mind, your real estate attorney will be able to share specific documentation and statements, as well as your lender, if you’re financing. Disclaimer: These are all estimates and do not constitute legal advice.

Below is a description of the buyer's closing costs. For a buyer closing cost calculator for NYC, check out the calculator I made below. (I’ve included a link at the bottom again if you want to read through first.)

Buyer Closing Cost Calculator

Mansion Tax

Fixed cost, are applied to every purchase type exceeding one million

The Mansion Tax is a fixed tax levied by New York City on all purchases over a million dollars. (Yes, I realize that most of these are not mansions. This was instituted in 1989 when the average purchase price of a home was $183,200.) The Mansion Tax is on a sliding scale depending on the value of your purchase.

Mortgage Recording Tax

Applies only to condo or townhome purchases, not relevant to cash purchase & only on the financed amount.

The Mortgage Recording Tax is a tax on the total mortgage amount for purchases of Real Property, ie, Condo and Townhome purchases. The tax is levied by the state of New York and the various counties in New York City. An interesting note is that, because purchasing a co-op is technically equivalent to purchasing shares in a corporation and is not real property, the mortgage recording tax does not apply. For a purchase in New York City, the mortgage recording tax starts at 1.8% on all mortgages with a loan amount under $ 500,000. For amounts over $500K, the rate is 1.925%. Great news: if you’re buying a townhouse, you will also receive $30 off that 1.925%. (Yes, some sarcasm may not come through my blog post.)

This is a good option to consider when evaluating co-ops and condos. For a million-dollar purchase, assuming a 20% down payment, you’ll save around $15,000 in closing costs on a co-op versus a condo.

Real Estate Attorney Costs

Required for every transaction; flat fee price that will vary somewhat depending on who you hire

A real estate attorney is essential to any transaction in New York City. They are a fantastic advocate throughout the process and ensure you are prepared for any risks associated with your purchase. Real estate attorneys also charge a flat fee per transaction. Any real estate attorney who charges by the hour is someone you should treat with suspicion.

A realistic range is $3,000 to $5,000 here. Service matters significantly in this transaction; a responsive and thorough attorney is essential to a smooth purchase.

Two notes on attorneys: If you are financing, you’ll likely pay for the bank’s attorney as well. If purchasing a new development, you may pay for the sponsor’s attorney at closing, too.

Title Insurance Cost Estimate

Varies; only required on Condo & Townhome purchases

This cost will vary, and your real estate attorney will likely have a recommendation for a vendor. For a condo or townhouse, you will need to purchase this policy, and it will start around .6%.

If you have a particular property in mind in the NYC area, I work with a great title company that will provide quotes in just a few hours.

Title & Lien Search Fees

Varies, applies to all purchases.

These fees are incurred prior to closing to ensure a clean title and to prevent any surprises when taking ownership of the property. You’ll probably pay $1,000-$2,000 in total for all of these fees.

Flip Tax

Varies, only applies to Co-Op purchases

Flip taxes are not technically taxes, but rather fees used by co-ops to generate additional funds for the building. Sometimes these will be charged to the seller, sometimes they don’t exist, and sometimes they are charged to the buyer.

Building Associated Closing Costs

Varies widely by building

These are additional fees charged by both condominium and co-op buildings, as well as the management companies that facilitate the transaction. I’ve listed out some common examples below. Many buildings in Manhattan and Brooklyn use a website called domecile.com, which lists all the fees. If you are researching a specific building, you can search for it by its address.

Move-In Fee (sometimes refundable $500-$2,000)
Contribution to working capital or reserve fund (often 2-3 months’ common charges at a condo)
Building management fee ($400-$1,500 paid at closing)
Questionnaire for management ($250-$750 paid during due diligence and potentially again if financing)
Application Processing Fee ($500-$1,500)

Mortgage-Related Closing Costs

Varies by lender; does not apply to cash purchases

When financing, a variety of smaller fees will accumulate. I recently financed a condo purchase, and my mortgage fees totaled approximately $5,000.

Appraisal ($1,000-$2,000)
Banks Attorney ($750-$1,250)
Origination Fees (varies by loan amount- $1,000-$3,000)
Mortgage Recording Fee ($400)
Credit Report ($100-$500)

Transfer Taxes

New Development purchases only; can be negotiated depending on market conditions

Transfer taxes are discussed when purchasing a new development or a sponsor unit. In a resale, the seller pays transfer taxes. In a purchase from a sponsor, the buyer pays transfer taxes unless they are negotiated otherwise. (Negotiations will vary depending on the market and the building—ask your real estate agent if you’re unsure. Or send me a note if you’re in the market.)

It’s New York City so of course there is a lot to consider.

Use My Buyer Closing Cost Calculator

Have any other questions about closing costs or need some more information to discuss? Send me a note and let’s chat.

Katie

Buyer Closing Costs in New York City