Who Pays Closing Costs in NYC?
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Who pays closing costs depends on the line item: NYC buyers usually fund loan, title and the 1% mansion tax at $1 million or more, while sellers usually fund transfer taxes and agreed brokerage costs. The contract can reassign some expenses. Start with the Closing Disclosure, then price every charge separately.
There isn’t one closing-cost percentage that works for every New York deal. A financed condo, an all-cash co-op, and a sponsor sale can share a price and produce three very different stacks of paper.
We’ve represented New York buyers since 2017. The useful question isn’t whether closing costs exist. It’s the party that controls each one before the contract is signed.
You can control more of that answer before the offer than at the closing table.
The buyer and seller split starts with the charge
The CFPB Closing Disclosure separates loan costs, government fees, prepaids, escrow and credits. That is the right mental model too. The invoice has no interest in your team colors.
| Usually buyer-side | Usually seller-side | Either side can negotiate |
|---|---|---|
| Loan costs, appraisal, lender title policy | NYS and NYC transfer taxes | Seller or lender credits |
| Owner’s title policy on deeded property | Payoff and agreed brokerage compensation | Sponsor charges and concessions |
| Mansion and supplemental tax where applicable | Building move-out or transfer charges when assigned | Attorney and selected service costs |
| Mortgage recording tax on new real-property debt | Seller’s own attorney | Repair escrows and prorations |
“Usually” matters. Your contract, brokerage agreements, lender program, and building documents decide the actual columns. A seller can credit a buyer without becoming the statutory taxpayer. A buyer can accept a sponsor charge without turning it into a universal market rule.
This is how you compare the closing costs paid by the buyer and seller. Compare them by each charge. Check who is legally required to pay each cost. Also review how the costs were negotiated and split.
If you want a transaction-specific estimate, our NYC closing-cost calculators separate buyer, seller, condo, and co-op assumptions instead of hiding them in one percentage.
Earnest money is credited until the contract says otherwise
In NYC practice, the buyer typically puts down 10% when signing the contract, according to the NYC Bar’s buying guide. The seller’s attorney usually holds it in escrow. At closing, it becomes part of the purchase price.
That is a deposit with consequences, not a ceremonial handshake. Refund rights depend on the actual contingencies and deadlines in the signed contract. Our guide to earnest money distinguishes the deposit from the later down payment and shows where buyers lose protection.
Title insurance protects two different interests
A lender’s policy protects the lender. An owner’s policy protects the buyer’s covered ownership interest. The lender protects its money with your money.
New York premiums follow filed rate bands, not one honest universal percentage. NYC and Westchester are Zone 2 under the current TIRSA manual. The title-insurance guide explains what the search does, what a policy covers, and why deeded property differs from a co-op.
Attorney fees pay for the contract, not the ceremony
Your attorney reviews and negotiates the contract, handles diligence, coordinates title or lien work, and gets the file to closing. New York has rules against excessive fees, but no official statewide price list for a residential deal.
Ask what the quote includes, when it becomes earned, and what triggers extra billing. The cheapest quote can become the most expensive person in the email chain. Our real estate attorney fee guide gives you the scope questions that make two quotes comparable.
Mortgage recording tax follows the loan, not the price
New York taxes mortgages recorded against real property. NYC’s statutory total is 2.05% for a $500,000 mortgage and 2.175% for mortgages at or above $500,000 for a qualifying one-to-three-family home or individual condo. The lender generally pays a 0.25% component on qualifying residential loans, subject to exceptions.
All-cash buyers don’t record a mortgage. Co-op share loans use a different security structure. Cash buyers get to dislike different line items. See the exact bases, lender share and CEMA limits in our NYC mortgage recording tax guide.
New Jersey changed the million-dollar rule in 2025
New Jersey buyers and sellers need a current worksheet. The state changed covered transfers on 10 July 2025. The old buyer mansion-tax shortcut is now a historical artifact.
The seller pays the standard Realty Transfer Fee. For covered property over $1 million, the seller also pays a Graduated Percent Fee from 1% to 3.5% of the full consideration, depending on the band. Our 2026 New Jersey closing-cost guide keeps buyer loan costs separate from seller transfer taxes.
Closing-cost credits move cash between columns
A seller credit can cover eligible buyer costs when the contract, appraisal, and loan program allow it. A lender credit usually lowers cash due in exchange for a higher interest rate. They have the same friendly noun and very different economies.
A credit can move the bill, but it can’t make the bill disappear. Fannie Mae caps interested-party contributions by occupancy and loan-to-value ratio, and they can’t fund the down payment or required reserves. Our closing-cost credit guide explains the three credit types without turning it into another commission article.
For a separate way to reduce cash at closing, see how our buyer rebate works. The rebate must still fit the lender and closing documents.
New construction adds a sponsor to the negotiation
A sponsor sale can shift transfer taxes, sponsor attorney charges, working-capital contributions, and other plan-specific items to the buyer. None of those charges should be assumed from a blog list. The offering plan, purchase agreement, and riders control.
The model apartment never displays the sponsor rider on the kitchen island. Price every concession in dollars and put it in writing. The new-construction closing-cost guide shows where a credit, rate buydown, or sponsor-paid tax can beat a cosmetic upgrade.
A co-op has title risk without a deed
A co-op buyer acquires shares in a corporation and a proprietary lease. You buy shares, a lease, and a vocabulary test. That is why ordinary deed title insurance doesn’t map neatly onto the transaction.
Lien and UCC searches still matter, and approved cooperative title forms exist. Whether you need one depends on the lender, the estate, or foreclosure history, and the actual policy. Our guide to title insurance for New York co-ops draws that narrower line.
Seller closing costs come off the top
NYC sellers usually face state and city transfer taxes, their own attorney, payoff and building charges, plus any brokerage compensation or buyer credit they agreed to. The sale price arrives wearing a much smaller coat.
For an individual residential unit, NYC RPTT is 1% on amounts up to $500,000 and 1.425% on amounts above $500,000. New York’s basic transfer tax is 0.4%, with an additional base tax for qualifying NYC residential transfers of $3 million or more. Our seller closing-cost breakdown also covers flip taxes, prorations, FIRPTA withholding and the federal home-sale exclusion without calling income tax a closing fee.
Westchester changes again at the city line
Westchester uses the state transfer-tax rules and its own recording workflow. Its statutory mortgage recording tax is 1.30%, while Yonkers is 1.80%. Where the lender pays the usual 0.25% component, the borrower’s arithmetic changes accordingly.
Yonkers also imposes a 1.5% city real estate transfer tax on sales above $25,000. Yonkers keeps its own calculator on the table. The Westchester closing-cost guide separates county, Yonkers, co-op, and condo cases before anyone multiplies the wrong base.
Build the worksheet before the offer
Ask your lender for the Loan Estimate. Ask your attorney which contract charges can move. Pull the building or sponsor fees. Then compare credits by their long-term cost, not their label.
Closing day is a poor time to discover arithmetic. If you want representation plus a disclosed rebate, see what NestApple returns to buyers and run the same deal through the calculators first.
Common questions
Can a buyer ask the seller to pay closing costs? Yes, through a negotiated credit, subject to the contract, appraisal, and loan rules.
Does the buyer always pay the mansion tax? New York generally imposes it on the buyer for residential transfers of $1 million or more, with statutory fallback rules if it isn’t paid.
Are closing costs part of the down payment? No. The down payment funds the buyer’s equity, while closing costs cover taxes, financing, and transaction services.
When do you know the final amount? A financed buyer receives the Closing Disclosure before closing, but title, building, and negotiated figures should be priced earlier.
Nicole Fishman Benoliel co-founded NestApple in 2017. She's a lawyer admitted to the New York bar - her law degree is from La Escuela Libre de Derecho in Costa Rica, with further study at IE Business School in Madrid and an LLM from Fordham in New York. She does not act in a legal capacity at NestApple; every client is referred to an attorney who handles real estate deals full time.
