Welcome to the First Time Home Buyer Series where we help newbie NYC home buyers navigate through the most thrilling (and sometimes most headache-ridden) process out there.
When I purchased my first apartment in NYC (an adorable 1 bedroom on the Upper West), it was an exciting, but very stressful time for me. Mainly because I was blind-sided by how much I needed to have to close. I remember scrambling a couple days before the closing date trying to come up with all the cash needed and just barely making it with enough to close.
Many first time home buyers only think about the cost of downpayment and getting a loan. You also have to be aware of all the extra expenses involved in a purchase, such as attorney fees and building fees.
Nothing is ever easy (or cheap) in NYC and buying property is no exception. Where the rest of the country sees average closing costs of approximately $3,700*, here in NYC that number jumps up to around 2-5% of your purchase price. To put that into perspective, on a$500,000 purchase, your closing costs could range from $10,000 to $25,000!
So where are all these expenses coming from? Below is a general breakdown of the costs you can expect to incur as a buyer in a condo or a coop (brace yourself):
Closing Costs for Buyers – Condos
| Title Insurance – Owner’s Policy | -Approximately $4 per $1,000 ofclosing price plus $1,000 |
| Title Insurance – Mortgage | -Variable depending on loan amount |
| Real Estate Tax Adjustment | -Reimbursement to seller forpre-paid Real Estate Taxes |
| Common Charge Adjustment | -Reimbursement to seller forpre-paid Common Charges |
| NYS Mortgage Recording Tax | -1.8% if mortgage less than $500k,1.925% if mortgage is greater than $500k |
| Administrative Lending Fees | -Various – depending on lender |
| Bank Attorney Fee | -$700-$950 |
| Move-In Deposit (refundable) | -$500-$1,000 |
| Move-In Fee (non-refundable) | -$250-$1,000 |
| Purchase Application Fee | -$500-$1,000 |
| Mansion Tax | -1% of purchase price if $1mm or more |
| Purchaser’s Attorney Fee | -Varies, typically $1,000-$3,000 |
Closing Costs for Buyers – Coops
| Coop Application Fee | -$500-$1,000 |
| Judgement & Lien Search | -$250-$350 |
| Recognition Agreement Fee | -$150-$250 |
| Maintenance Adjustment | -Reimbursement to seller for pre-paid Maintenance |
| Title Closer Gratuity | -$250 |
| Administrative Lending Fees | -Various – depending on lender |
| UCC-1 Filing Fee | -$75-$125 |
| Bank Attorney Fee | -$700-$950 |
| Move-In Deposit (refundable) | -$500-$1,000 |
| Move-In Fee (non-refundable) | -$250-$1,000 |
| Purchase Application Fee | -$500-$1000 |
| Mansion Tax | -1% of purchase price if $1mm or more |
| Purchaser’s Attorney Fee | -Varies, typically $1,000-$3,000 |
Are there ways to lower or even avoid any of these fees?
Most of the time it is difficult unless you plan on doing an all-cash purchase. Then all of the fees associated with lending are made obsolete. However, if you work with Suitey, we offer all buyers a 1% rebate on the purchase price, which is a huge help in offsetting some of these closing costs.
I hope this helps you come up with a better estimate of what your actual closing costs could look like, and save you the stress I had on my first purchase.
View Printable Closing Cost Guide
Good luck!
