Despite having to pay sky high prices for apartments in New York City, some buyers may not even realize that there are additional NYC closings costs that they haven’t considered. The extra costs can really add up, especially for condos. In this article, you'll see a comparison of condo vs co-op closing costs NYC buyers pay.
Overall when purchasing a co-op in NYC, buyers should expect to pay about one to two percent of the purchase price, or two to three if the apartment costs more than $1 million. As for condos, expect two to four percent as a safe range, the lower end for properties under a million dollars with small mortgages. New construction can be much higher, in some cases above 5%. You can quickly estimate what you'll pay with Prevu's closing costs calculator for buyers.
It’s a double whammy, condos cost more in price terms and they also have higher real estate closing costs! The reason is that when you are buying a condo with a mortgage you a required to pay a mortgage recording tax and typically required to purchase title insurance. While if you purchase a co-op with a mortgage, you are not. Technically when you are buying a co-op apartment, you are buying shares in the co-op and have a proprietary lease on the apartment. While it may be possible to purchase title insurance for a co-op, most opt not to buy it.
|Mortgage Recording Tax||Yes||No|
|State Transfer Tax||No**||No|
|NYC Transfer Tax||No**||No|
|Other Smaller Costs||Yes||Yes|
* Applicable if price is greater than or equal to $1,000,000
** Applicable if new development
While most of these costs are unavoidable and are the “cost of doing business” when buying an apartment in NYC, potential buyers should educate themselves so that they are prepared when it comes time to make an offer on an apartment. In addition, a good way to help offset some of your closing costs is to get cash back with a buyer commission rebate. Prevu, a tech-enabled real estate brokerage in NYC, rebates two-thirds of the commission it receives representing buyers. Prevu’s Smart Buyer™ Rebate is the largest in NYC and you also benefit from having an expert real estate agent with you every step of the way. When buying a home in NYC with Prevu, you receive up to 2% cash back which certainly will help buyers cope with the mountain of closings costs.
Prevu has created a closing costs calculator for buyers in NYC so you can quickly estimate these costs. You can also reach out to Prevu or your real estate attorney to better estimate your closing costs so that you can plan for them in your budget.
Prevu is the real estate technology company on a mission to save people money when they buy or sell a home. Our industry-leading Smart Buyer™ Rebate makes it possible for homebuyers in NYC to receive a commission rebate of up to 2% of their purchase price with a seamless, end-to-end buying experience and the expert advice of a dedicated, salaried agent.
Thinking about buying a co-op in NYC? Check out the answers to the most common questions New Yorkers have about purchasing a co-op in NYC.
December 21, 2018