What Are the Hidden Costs of Buying a Home in New York City?

1. Attorney Fees

   In New York, both buyers and sellers must retain attorneys to complete a real estate transaction. The buyer’s attorney fee typically ranges from $1,000–$3,500.For new development purchases, buyers are usually responsible for both the buyer’s and sponsor’s attorney fees. For resale properties, each party pays their own attorney.

2. Home Inspection Fees

   For resale properties, buyers usually hire a licensed home inspector to evaluate the condition of the property. Condo & Co-op: Inspection typically covers interior condition, including walls, flooring, plumbing, electrical systems, appliances, etc. Fees generally range from $300–$600. Townhouse / House: Inspection is more comprehensive and may include structure, roofing, plumbing, electrical systems, foundation, basement, exterior walls, heating systems, etc. Fees typically range from $600–$1,200 or more.

3. Transfer Tax

   When purchasing property in New York, transfer taxes are incurred at closing. These taxes generally consist of two components: New York State transfer tax and New York City transfer tax. For new development purchases, transfer taxes are typically paid by the buyer. For resale properties, transfer taxes are generally paid by the seller. The calculation structure is as follows.

   NY State Tax：

   • Homes under $2 million: Transfer tax = 0.4% * Price

   • Homes over $2 million: Transfer tax = 0.65% * Price

   NYC Tax：

   • Homes under $500,000: Transfer tax = 1.425% * Price

   • Homes over $500,000: Transfer tax = 2.625% * Price

4. Title Insurance & Mortgage Insurance

   If you are purchasing a condo, you will need to buy title insurance. The cost is determined by New York State’s standard rate schedule. Generally, the higher the purchase price, the lower the marginal rate, typically around 0.4%–0.6% of the purchase price.

   
   

   If you are financing the purchase, you will also need to pay for lender’s title insurance. A reasonable range is 0.2%–0.3%, though this is not a fixed official rate and depends on the title company’s quote.

5. Mansion Tax

   In New York State, for residential properties sold at $1,000,000 or more, buyers must pay an additional mansion tax on top of the transfer tax. By law, the mansion tax is paid by the buyer and applies to both new developments and resale transactions. It follows a tiered rate structure based on the final purchase price:

   

   
   

6. Mortgage Recording Tax

   When obtaining a mortgage in New York City, buyers must pay a mortgage recording tax. This tax consists of three components: New York State tax, State supplemental tax, and New York City tax. It applies to loans secured by real property. Rates vary based on the loan amount:

   Tax Rates Based on Loan Amount

   • ≤ $500,000: 1.75%

   • $500,000: 2.0%

   In practice, the mortgage recording tax is typically part of the buyer’s closing costs. However, some lenders may cover approximately 0.25% through credits or fee adjustments, so buyers often pay around 1.5%–1.75%. The final amount depends on the lender’s closing disclosure

7. Other Costs

In addition to the above, financed buyers may incur the following expenses, subject to the lender’s final quote:

• Bank points（0–3%）

• Loan application fee（approx $400–$800）

• Bank attorney fee（approx $750–$1,500）

• Appraisal and recording fees（approx $150–$250）

• Short-term interest (usually no more than 1 month）

  
  

• RMU Review & Reserve Requirements (Not a Fee)

In some loan cases—especially for investment properties, purchases under an LLC, self-employment income, overseas income, or high-net-worth clients—the bank may initiate an internal RMU (Relationship Management Unit) review. RMU is not a fee, but an internal risk control and client review process to more comprehensively assess the borrower’s financial profile, source of funds, and repayment capacity.

During the RMU review, the bank may require the borrower to maintain certain reserves—typically 6–12 months of mortgage payments and related housing expenses (e.g., taxes, HOA). These funds remain in the borrower’s account, are not paid to the bank, and are not closing costs. Requirements depend on the lender’s final approval.

• Working Capital (Capital Contribution) vs. Bank Reserve Requirement

Working Capital is not a bank requirement. When purchasing a condo or co-op in New York, buyers may be required at closing to make a one-time payment to the building management (HOA/Building) to fund the building’s operating reserves. This is a closing cost, non-refundable, and not counted toward the down payment. The exact amount is determined by the building’s governing documents.

Most of the above costs are one-time closing expenses and do not include ongoing ownership costs such as property taxes, maintenance, or insurance. Buyers should budget accordingly.

ACRE agents help buyers systematically understand and plan for all costs involved in the purchase process. We coordinate with attorneys, lenders, inspectors, and title companies at each stage of the transaction, assisting buyers in making clear, well-controlled, and financially aligned decisions from offer to closing. If you have any questions about costs or procedures, feel free to consult an ACRE agent.