Understanding Closing Costs for Sellers in NYC
Selling a property in New York City can be a rewarding yet complex process, and understanding your financial obligations is key to avoiding surprises at the closing table. Closing costs for sellers in NYC typically account for about 8-10% of the sale price and can include various fees, taxes, and other expenses. Here’s a breakdown of the most common costs:
1. Real Estate Agent Commission
The largest expense for sellers is the commission paid to real estate agents, typically 5-6% of the sale price. This fee is split between the seller's and buyer's agents.
2. NYC Transfer Tax
New York City imposes a transfer tax on property sales. For sales under $500,000, the tax is 1% of the sale price. For properties sold at $500,000 or more, the rate increases to 1.425%.
3. NY State Transfer Tax
In addition to the city tax, New York State charges a transfer tax of 0.4% of the sale price. For residential properties sold above $1 million, an additional "mansion tax" applies, starting at 1% and increasing on a sliding scale for higher-priced properties.
4. Attorney Fees
Sellers in NYC are required to have an attorney represent them during the transaction. Attorney fees can range from $2,000 to $5,000, depending on the complexity of the deal.
5. Flip Tax (for Co-ops)
If you’re selling a co-op, you may be subject to a flip tax, which is typically 1-3% of the sale price, depending on the building’s policies.
6. Payoff of Existing Mortgage
If you have an outstanding mortgage, the balance will need to be paid off at closing. Be sure to confirm the payoff amount, which may include interest up to the closing date.
7. Miscellaneous Fees
Other potential costs include:
- Building Fees: Some condos or co-ops charge move-out fees or other administrative costs.
- Recording Fees: A small fee to record the release of the lien on the property.
Bottom Line
Closing costs can add up, so it’s essential to account for these expenses when planning your sale. Working with an experienced real estate agent and attorney can help you navigate these costs effectively and maximize your net proceeds.
If you’re considering selling your property and want to learn more about how to prepare for closing, feel free to reach out with any questions,.
If you have any suggested topics to cover, please let me know.
Thanks for reading!
-Sean
