how much are buyer closing costs for 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 if you are looking to buy sell or rent
in new york city long island the hudson valley or south florida so let's get
started
so how much are buyer closing costs for a townhouse in new york city
well your typical buyer is going to pay anywhere from two to four percent of the
purchase price in buyer closing costs when purchasing a townhouse also known
as a brownstone here in new york city now closing costs for a townhouse in
particular are largely driven by two specific items the first being the
mansion tax and the second being the mortgage
recording tax as a result your closing cost bill
depends on two associated factors number one the purchase price the
mansion tax itself is a progressive tax structure with many different tax
brackets therefore the higher your purchase price the higher percentage you
will have to pay for the mansion tax as a result
to reduce your buyer closing costs in new york you could potentially spend
less money and you'll fall into a lower mansion tax bracket
the second determinant of your closing costs of course is whether or not you're
financing and that's because the mortgage recording tax certainly is only
applicable uh to people who are financing and going further certainly
the size of your loan is what determines the amount of your mortgage recording
tax bill if you're putting down 85 percent and financing 15
a very insignificant amount your mortgage recording tax bill will be very
low but if you are financing 95 of your
purchase of course the loan size will be substantial and as a result
the mortgage recording tax bill will also be meaningful
so to go into extremes if you end up say
buying a townhouse in new york city that's under a million dollars if you
somehow managed to discover something like that they do exist by the way but
not in the areas that most people are considering such as brownstone brooklyn
but let's say you find something that's under a million and you're paying all
cash in that case your closing cost bill will
actually be significantly less than two percent you have no mansion tax because
you're below a million and you have no mortgage recording tax because you're
not financing now on the flip side if you're buying a
substantial townhouse let's say a 5 or 10 or 15 million type of property
and you are financing a fair bit of the purchase let's say you know 70
you're gonna have a massive closing cost bill and that's because you're paying a
very high mansion tax percentage and of course you have a substantial mortgage
loan size which will translate into a high mortgage according tax bill
so the third buyer closing costs for townhouses that is meaningful is title
insurance now this is not something you can avoid
you have to get title insurance everybody gets it whether your purchase
price is a million dollars or 28 million dollars or if you're financing or not it
doesn't matter you have to get title insurance now title insurance costs
anywhere from roughly 0.4 to 0.5 percent of your
purchase price it is an insurance premium it's a one-time payment upfront
which protects your property your title against future claims uh by somebody who
may have potentially uh had a claim to your property but fail to come forward
prior to you purchasing so that closing costs cannot be avoided
0.4 0.5 percent it'll of course be a little bit higher if you are financing
because then of course there needs to be a title insurance policy for your lender
as well so that'll bring it up a little bit and there's also this thing called
the market value writer it's an optional additional component of title insurance
which basically allows the value of the insurance policy to float in line with
the market appreciation over time if you do not purchase the market value
rider and somebody makes a claim against your
title in 30 years your insurance policy will only cover
your purchase price it will it will not give you any credit for the 30 years of
appreciation that happened thereafter so in our opinion you really do need to buy
the market value rider and it's very inexpensive relative to the total cost
of of title insurance so just to summarize the three largest
closing costs for townhouses in new york city include
the mansion tax the mortgage recording tax as well as title insurance
now outside of these three main ones you have a few other incidentals for
starters you have buyer closing costs associated with your attorney
your attorney charges usually a flat fee in new york city of a few thousand
dollars which includes contract review buyer
due diligence as well as the closing itself but relative to the typical
purchase price of a new york city townhouse a flat fee of you know three
four five-ish thousand dollars is pretty much insignificant
now outside of attorney fees of course you have other you know various
incidental type fees for example if you're financing you will have a loan
application fee you'll have an appraisal fee those are usually around seven
hundred and fifty dollars to a thousand dollars each you'll also have the fee
for the bank's attorney the lender's attorney that you pay for as the
borrower and you also have various filing related fees for your mortgage
other types of miscellaneous type closing costs also include
recording fees for your actual title and some fees associated with your title
search but the collective amount of these random fees is extremely
insignificant relative to the first three closing costs that we've mentioned
and the typical purchase price of a townhouse in new york city we hope this
video was helpful and of course if you want a more specific estimate of your
buyer closing costs for a townhouse in new york city you can actually use our
closing cost calculator on hauseit.com it is extremely thorough interactive you
can change various parameters based on your purchase purchase price percentage
down and so forth to give you a rather accurate
estimate of your buyer closing costs but just to reiterate again it's only an
estimate we are not you know attorneys we're not accountants
so it's really just for illustrative purposes only but it should point you in
the right direction and certainly the main way we can really help you if you
are buying is to help lower your closing costs through our Hauseit Buyer Closing Credit
Hauseit Buyer Closing Credit service this is a very easy way to save up to two percent of your
purchase price by way of working with one of our buyer
agents in new york city who has agreed to provide you with a substantial rebate
of the commission paid to them by the seller of your property
so you can learn more by visiting hauseit.com or give us a call
888-494-8258 i'm Nick at Hauseit and we'll see you on the next video