how to reduce your buyer closing costs when purchasing a townhouse in new york
city we'll demystify this topic in the following video i'm Nick at Hauseit visit
hauseit.com to learn how to save money when buying selling or renting real
estate in new york city long island the hudson valley as well and south florida
so let's get started
so if you're watching this video you may very well be looking to buy a townhouse
and so you're probably aware that the typical buyer of a townhouse in new york
city pays between two and four percent in buyer closing costs which is quite
frankly a ton of money especially when you consider the fact that your typical
townhouse in new york city is really expensive
so for something about five million you know four percent on that is a huge
amount of money we're talking about two hundred thousand dollars in closing
costs on on something like that so naturally you're wondering how can i
reduce my buyer closing costs well we'll give you a few ideas in this video some
of them are less actionable than others but will be very transparent and lay
them all out and then you can decide how to proceed so the first way to reduce
your buyer closing costs when purchasing a townhouse in new york city is simply
to lower your budget i know that's probably an annoying statement to hear
but it really is important because of the fact that the mansion tax in new
york city is now a progressive tax structure which has many different tax
brackets so if for example you were thinking about
spending say 3.25 million if you're able to go down to say
2.95 million that will take you down in terms of the mansion tax threshold
you'll go from 1.5 down to 1.25 on the mansion tax
threshold candidly not a huge amount of money but
it is legitimately one way for you to lower your buyer closing costs on a
townhouse so if your budget is around those mansion tax thresholds just be
mindful of that keep that in the back of your head as you think about offers and
ultimately what property to purchase another way to reduce your buyer closing
costs on a townhouse in new york city is to consider paying all cash or to simply
put down more money the reason why this matters is because one of the largest
buyer closing costs for a townhouse is the mortgage recording tax
naturally no mortgage no mortgage recording tax so you can save quite a
bit of money there by way of paying all cash of course there are many other
benefits to financing which we'll talk about in another video but the specific
scope of this video is how to reduce your buyer closing costs and you can
absolutely reduce them either by paying all cash or simply lowering the amount
of money that you actually are looking to finance
another way to reduce your buyer closing costs in new york city is to receive a
buyer agent commission rebate from your buyer's agent at hauseit we offer this
through our Hauseit Buyer Closing Credit service
and essentially how it works is you are paired with one of our traditional
buyer's agents who helps you throughout the process from start to finish much
like any other buyer's agent will in new york
the difference is that at closing instead of the buyer's agent keeping all
of the commission paid by the seller we'll actually credit you back up to
two-thirds of the amount of money paid in commissioned by the seller
so on say a five million dollar purchase the buyer agent commission is typically
three percent that's a hundred and fifty thousand dollars in commission which is
paid to your buyer's agent a normal buyer's agent will keep all 150
000 in commission maybe buy you a 50 box of chocolates and that'll be that
through house it buyer closing credit we will actually credit you back in that
particular example up to 100 000 in the form of either a credit at closing which
would reduce the amount of money you have to bring to the closing table or in
the form of a check post closing whichever method you choose is up to you
but in other words easiest way to save money reduce your buyer closing costs on
a townhouse in new york city is simply to request a buyer agent commission
rebate we make that very easy at hauseit through the buyer closing credit service
that we offer if you are interested in learning more visit hauseit.com or send
us an email to teamhouse.com another way to reduce your buyer closing
costs in new york city is to request a seller's concession now effectively what
happens in this example is you would raise your offer price by
the amount in concession that you need say like 10 000
and then upon closing the seller will actually give you back the 10 000 which
allows you to reduce the amount of money you have to
bring to the table for closing costs so the nomenclature is a bit odd because
the seller is not really conceding to anything
they're just basically doing you solid by allowing you to manipulate the
contract price so that you can extract some cash and liquidity during the
process to help cover your closing costs now one thing we'll say about this
method is that it is a bit uncommon in new york city and that's just because
people who typically are buying townhouses in new york are flush with
cash and they have no problem coming up with
the amount of money needed for closing costs so in all honesty your typical
seller in new york they're not going to love the sound of this they'll be
perhaps a bit naturally dubious about what it really means a good buyer's
agent a good listing agent can easily explain it all thoroughly and and you
know the deal can definitely happen but if there's a competitive situation
there's multiple offers and you're that one person with a sort of confusing
seller concession concept associated with your offer it might not be
favorable uh you know compared to those other offers so you might be at a
disadvantage is what we mean to say but nevertheless if you do need the seller's
concession in order to make the math work for you then there's no harm in
trying it deals do get done with them in new york but like we said they're just
less common so we hope you found this video to be
helpful we gave you four ways to reduce your buyer closing costs on a townhouse
in new york city they include lowering your budget to reduce the
mansion tax threshold that you fall under the second
option is to consider paying all cash or simply to take out a smaller loan that
will reduce the amount of mortgage recording tax bill you have to pay
the third option is to request a Hauseit Buyer Closing Credit which will save you
up to two percent or more on your purchase price thereby reducing your
closing costs and you can learn more about that by visiting hauseit.com and
finally the final method for lowering well not technically lowering but simply
paying for your buyer closing costs in new york city is to request a seller's
concession so if you have any questions leave a
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on the next video