4 years ago

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/

NYC Buyer Closing Cost Overview: https://www.hauseit.com/buyer-closing-costs-nyc/

Buyer closing costs in New York City are approximately 4% for condos and houses, 2% for coops and 6% or more for new developments. Assuming your financing closing costs may be lower for an all-cash purchase you can reduce your closing costs by requesting a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/

So, let's go through the most important buyer closing costs in New York City real estate. Buyer closing costs are higher for condos versus co-ops, and closing costs are the highest for new developments which are also known as sponsor units.

The largest buyer closing costs in New York City include the Mortgage Recording Tax of 1.8% to 1.925% for buyers who are financing and the Mansion Tax of 1% to 3.9% on purchases of $1 million or more. Other large buyer closing costs include title insurance for condos and houses, real estate attorney fees as well as lender building and miscellaneous fees.

The mortgage recording tax is 1.8% for loans below $500k and 1.925% for loans of $500k or more. The actual rates are higher but banks generally cover 0.25% of this recording tax for residential deals. Commercial properties and four or more family houses have a higher Mortgage Recording Tax rate of 2.8% and the lender typically does not cover any of this tax. You can estimate your mortgage recording tax bill using Hauseit's interactive Mortgage Recording Tax calculator available at: https://www.hauseit.com/nyc-mortgage-recording-tax-calculator/

The Mortgage Recording Tax is not applicable to co-ops, as the tax only applies to real property. Co-ops are not considered to be real property since unit owners actually purchase shares in the private corporation that owns the coop this is different from condos and houses whereby a purchaser receives a physical deed.

Because the Mortgage Recording Tax is based on the loan size as opposed to the purchase price, you can lower your buyer closing costs by paying all cash or simply by increasing the size of down payment. It's also possible to reduce the mortgage recording tax as a buyer by negotiating a Purchase CEMA with the seller. This allows the seller to transfer some or all of an existing mortgage over to you as the buyer thereby reducing the amount of new loan money which needs to be originated and recorded. Sellers also benefit from a Purchase CEMA since it allows them to avoid paying the New York State transfer tax on the amount of mortgage which is transferred. Purchase CEMA FAQ: https://www.hauseit.com/purchase-cema-mortgage/

The Mansion Tax is a progressive buyer closing cost applicable to purchases of $1 million or more and the tax ranges from 1% to 3.9% depending on the purchase price. The Mansion Tax is a statewide tax collected by the New York State Department of Taxation and Finance. Although the New York mansion tax rate is just 1% for cities other than New York City. The tax was originally imposed in 1989. It remained at a fixed 1% unadjusted for inflation until it was overhauled in 2019 as part of changes to the New York tax law. The original tax rate of 1% is still around but it applies to purchases of $1 million or more and below $2 million the highest tax rate of 3.9% applies to purchases of $25 million or more.

Title insurance. Title insurance is approximately 0.4% to 0.5% of the purchase price. It's a one-time fee which provides a buyer with an insurance policy against defects or future claims which are against the title of the property being purchased which were unknown at the time of the purchase. Title insurance protects both you as the purchaser as well as your lender and the insurance policy covers legal fees as well as your principal. You can also purchase an additional insurance policy called a market value writer and this will automatically step up the value of your title insurance policy to match appreciation in the market value over time.

Attorney fees. The typical real estate attorney fee for a buyer in New York City is between $2,000 to $3,000. Fees can be higher depending on the complexity of the transaction.

All condos and co-ops charge buyers a handful of fees when making the purchase. These may include a board application fee, move-in fee and/or a move-in deposit.

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
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Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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