How Much Are the Fees When Buying a Condo in NYC?
We’ll demystify this topic in the following video.
I’m Nick at Hauseit, based here in NYC.
Check out our website https://hauseit.com to learn how to save money if you’re buying
or selling a co-op, condo or townhouse here in NYC.
So let’s get started!
The fees associated with buying a condo in New York City range from 2% to 6%.
Your closing costs will be between 3% to 4% if you’re financing.
An all-cash purchase will have slightly lower closing costs, around 2% on average.
If you’re buying a new construction condo, closing costs can reach up to 6%.
In this video, we will focus on the most common scenario in NYC: you’re buying a condo,
and you’re financing around 80% of the purchase price.
In this scenario, your closing costs will be between 3% to 4% of the purchase price.
So what does this consist of?
Well, let’s take a look at Hauseit’s buyer closing cost calculator for NYC.
This calculator gives you an itemized breakdown of all buyer closing costs so you can better
understand the big picture when it comes to the costs of buying a home in NYC.
The link is below in the description.
The first item is the Mansion Tax.
This is by far the largest closing cost.
However, the good news is that it only applies if your purchase price is $1 million or more.
For purchases of $1 million or more and below $2 million, the Mansion Tax is 1% of the entire
purchase price.
If you’re fortunate enough to have a budget above $2 million, please keep in mind that
there are 7 additional Mansion Tax brackets.
The highest rate of 3.9% applies to purchases of $25 million or more.
Please check out our dedicated article on the NYC Mansion Tax for more information.
We also have a dedicated Mansion Tax Calculator on our website, hauseit.com The links are
below in the description.
Moving along, the next closing cost is Title Insurance.
The cost of the insurance policy itself is around 0.45% to 0.5% of the purchase price.
In addition, there are a bunch of other random fees associated with the issuance of a title
insurance policy, which are between $1,000 and $2,000 all-in.
Let’s do a quick refresher: Title insurance is an insurance policy against any defects
or future claims against the title for issues which were unknown at the time of purchase
when the original title search was conducted.
This means you’ll be protected if a previous owner comes out of the woodwork ten years
after your purchase, and claims that there was a mistake in the chain of title and that
he never sold the property to the seller of your property, which means the seller of your
property didn’t have a right to sell it to you.
The next closing cost is the buyer attorney fee.
The average real estate attorney fee for a purchase or sale transaction in NYC is flat
rate of $2,000 to $4,000.
Lawyer fees can be as high as $5,000 for a more complex transaction and for new developments.
There are also light-touch, discount lawyers available who charge flat fees as low as $800.
Visit our website, hauseit.com, for more information on real estate legal fees in NYC as well as
what questions to ask when interviewing attorneys.
Moving along, the next items consist of the move-in deposit, board application fees and
the move-in fee.
These vary by building.
In general, expect an application fee of at least $500.
There may also be a separate credit check fee for each applicant.
The next closing cost is the deed recording fee.
There may also be additional recording fees for any required power of attorneys.
The total cost of recording fees is typically a few hundred dollars.
Last but not least, we have financing related costs.
Unfortunately, if you’re financing a condo purchase it means you’re subject to the
Mortgage Recording Tax.
This massive closing cost ranges from 1.8% to 1.925% of the loan size for most purchases.
It’s by far the largest buyer closing costs in NYC.
Other mortgage related costs consist of a loan application fee, appraisal fee, bank
attorney fee as well as the mortgage recording fee.
Please note that your lender requires a specific title insurance policy for the bank itself.
However, the cost of this is reflected in the previous closing cost estimate we provided
for title insurance, which is between 0.45% and 0.5% of the purchase price.
In conclusion, buyer closing costs for a condo in NYC are 3% to 4%, assuming you’re financing.
They’re a bit lower, closer to 2%, if you’re paying all-cash.