New York Property Purchasing Closing Costs
When buying property in New York, there are several costs to consider. These include attorney fees, transfer taxes, mansion taxes, title insurances, mortgage recording taxes, mortgage-related fees, and other various fees like inspection and appraisal fees. It's crucial to account for these costs to understand the full price of the property transaction.
In New York State, when purchasing property. Both the buyer and seller must engage the services of an attorney to facilitate the transaction. Generally, the buyer is responsible for paying their attorney fees when buying the property. However, in the case of newly constructed property, the developer may also require the buyer to cover the developer’s attorney fees. The attorney fee is between $2000 to $3000.
New York City transfer taxes are simply a tax paid to the government on virtually every real estate transaction, which are basically divided into two parts, one is the New York State tax, the other is the New York City tax. The specific calculation method for the taxes is as follows:
New York State
Property below $3million Property tax= purchase price *0.4%
Property above $3million Property tax=purchase price*0.64%
New York City
Property below $500,000: Property tax= purchase price *1.4%
Property below $500,000: Property tax=purchase price*1.425%
The most common total tax rate is 1.825%
Purchase Price Mansion Tax
Houses valued at over $1 million also requires mansion tax
Purchase Price NYC Mansion Tax
Fee Title Insurance & Mortgage Title Insurance
If the purchaser elects to obtain free title insurance, he or she will pay the premium to the title company. The premium will vary depending upon the amount or insurance requested. The premium for Fee Title Insurance (in accordance with the current schedule of rates set by the New York Board of Underwriters and filed with the New York State Insurance Department) is currently $350 for the first $35,000 of fee insurance, plus the following amounts for each additional $1,000 of insurance.
Amount of Insurance Premium
$35,001-$50,000 $5.81 per Thousand
$50,001-$100,000 $4.74 per Thousand
$100,001-$500,000 $3.8 per Thousand
$500,001-$1,000,000 $3.47 per Thousand
$1,000,001-$5,000,000 $3.19 per Thousand
Each purchaser is free to obtain title insurance from any title insurance company without incurring a penalty from Sponsor. Sponsor makes no warranty as to the cost, terms or availability of such other insurance or that the above rates will be in effect at the time of Closing. If the purchaser selects to simultaneously obtain both fee title insurance and mortgage title insurance from the title company, the premium on the amount of the loan policy that does not exceed the amount of the fee policy shall be calculated at a rate equal to thirty (30%) percent of the regular scheduled rates for loan policies. Using such discounted rates, the following would apply:
SIMULTANEOUS MORTGAGE RATE SCHEDULE
Amount Of Insurance Premium
$35,001-$50,000 $1.45 per Thousand
$50,001-$100,000 $1.26 per Thousand
$100,001-$500,000 $0.95 per Thousand
$500,001-$1,000,000 $0.87 per Thousand
$1,000,001-$5,000,000 $0.8 per Thousand
Mortgage Recording Tax
Property below $500,000: Mortgage recording tax= Loan amount *1.8%
Property below $500,000: Mortgage recording tax= Loan amount *1.925%
Mortgage Related Fee
If the buyer purchases the property with a mortgage, there will be loan costs. It is recommended to consult the loan institution for the specific lender charges associated with the loan portion. This section is for reference only.
Mortgage Point: 0%-3% of the loan amount (some banks charge this)
Application Fee: $500 (including credit checks, etc)
Banks Attorney Fee: $750+
Prepaid Appraisal Fee: $300
Property Appraisal Fee: $300
Loan Registration Fee: $150+ (various by different banks)
Short-term Bank Interest: Not exceeding one month
Loan Tax: Below $500,000 loan amount-1.8%; above $500,000 1.925%
Inspection Fee: Sometimes, the buyer may hire an appraiser to inspect the condition of the property. Depending on the condition of the property, the inspection fee varies around $450
Document Preparation Fee: Approximately $100 to $200
Registration Fee: The cost of registering the sale of the property in government records, approximately $100
HOA: In New York’s new condo developments, the payment of property fees varies based on the seller’s requirements. Some buildings require payment of 2-12 months’ worth of HOA upon occupancy.
Property Tax: Payment of property tax for a specific month, depending on the seller’s requirements.
Appraisal Fee: Inviting an appraiser to assess the property’s value is not mandatory and varies depending on individual circumstances, approximately $1500.
Some sellers may charge a deposit, usually found in larger condo units, to prevent damage to common area items. This deposit is typically around $1000