Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Dear sellers, while we hope you are sitting on a big profit and lots of gains on your equity, you may be surprised at how much you will net after closings costs and taxes. What are the closing costs for sellers in NYC? Closing costs are high in New York City, ranging from 1.5% to 6% for buyers and 8% to 10% for sellers. These closing costs are additional fees that must be paid at the closing table. This means sellers will net less from their home sale. You can jump the gun to our closing cost calculator in NYC at the bottom right of this website. We will go over all the condo and coop closing costs in NYC.
Closing costs for sellers can total 8% to 10% of their sale price! Your closing cost bill results from several factors, including property type (condo vs. co-op), purchase price, borrowed amount, and whether the property is a resale or new construction. If you have a mortgage, this can mean a significantly more significant percentage of your equity. In some instances, 8 to 10% of the home price in fees from closing costs can represent 40% or more of the equity in your home (if you only put 20% down when you got a mortgage, for example).
There are five major closing costs types sellers pay:
This represents by far up the most substantial portion of the closing costs when selling a home. Sellers in NYC typically pay all of the broker fees (buyer’s agent commission included, hence the half-truth that it’s free to have a buyer’s agent since “the seller is paying for it”). Typical commissions represent 5 to 6% of the apartment price in NYC. These commissions are usually split evenly between a buyer’s agent and a seller’s agent.
Despite advances in technology, broker commissions in NYC have remained unchanged, around 6%. To make matters worse, it’s challenging for a seller to negotiate commissions with a prospective listing agent, and if you are lucky, you can get them down to 5%. Despite all recent technology advances in technology, listing agents in NYC are still refusing to go below 5% commission.
If you are selling two or more un-attached units to your buyer at the same time, you are required to pay the commercial RPTT rates:
Unfortunately, New York State also has a transfer tax and charges an additional 0.40% transfer tax on the purchase price.
Most real estate attorney fees will generally range anywhere from $2,000-$4,000 for the transaction. Real estate attorneys in NYC typically charge you a flat fee upon the closing of the deal. It’s essential to do proper due diligence and find an experienced attorney. Referrals are always a good route. Interview, call and quote before making a decision.
The specific amount varies by building, but a general rule of thumb is to budget around $1,000 for a refundable move-out deposit and another $1,000 in potential non-refundable move-out and closing-related fees levied by your condo or co-op.
While this isn’t technically a “closing cost,” it is certainly something you must consider. If you are selling your primary residence, you have lived there for two years or more (out of the last five years), and are married; you can typically exclude the first $500,000 in capital gains and take them tax-free. If you are single, it would be only $250,000. Don’t forget all the closing costs you paid when you bought your home and also be sure to tell your accountant about all the work and improvements you made along the way.
At 5-6% of the home price, commissions are the highest NYC condo and coop closing costs for NYC sellers that you can control. For example, sellers with NestApple, pay only 1.5% listing agent commission, allowing them to save up to 4.5% versus traditional brokers.
NestApple delivers the same experience as a traditional agent, handling pricing, marketing, private showings, open houses, and negotiation. If a buyer comes with a buyer’s agent, sellers typically offer an additional commission to the buyers’ agent (up to 2.5%) to incentivize them to bring their buyers. If a buyer comes without a broker, sellers pay only the 1.5% NestApple commission: a significant difference between NestApple versus traditional brokers.
Our advice to you regarding seller closings costs is to control what you can. If you have specific questions relating to your home, feel free to reach out to the NestApple agent for advice. In any case, we recommend you run your transaction through our NestApple closing cost calculator NYC.