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In any closing transaction in New York, there will be closing costs involved for both sellers and buyers.
As a seller, you may not consider your closing costs when selling your property, but the closing costs for a seller can be quite steep and can take a chunk out of the proceeds you may be expecting at the closing table. Seller’s closing costs in New York City can run around 8 to 10% of your sale price, depending on the type of property, so it is important to be prepared. To discuss the closing costs you may expect during your home sale, contact top rated NYC real estate attorney Natalia Sishodia today.
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Disclaimer: Sishodia PLLC's NYC Seller Closing Cost Calculator provides estimates that are meant to be illustrative and used for reference purposes only. Exact closing costs in NYC will vary per transaction. Please consult the closing statement your real estate attorney will provide you for your exact closing costs.
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A seller’s closing costs will typically come out of the sales proceeds and will be deducted from the amount collected at closing. If your proceeds are not sufficient to cover these costs at closing, you will have to pay them out of pocket.
Closing costs that a seller may be subject to at closing include:
Real estate agents charge a commission for a sales transaction, with both the buyer’s and seller’s agents getting a portion of the total commission at the closing. Unless otherwise negotiated, the seller will typically pay both buyer’s and seller’s real estate agent’s fees to sell their property.
The real estate commission is what makes up most of the closing costs that are paid by a seller. Most real estate commissions in New York City will range from 5 to 6% of the sales price of the property. This will be split between the seller’s and the buyer’s agents.
A building flip tax is not really a tax but a transfer fee that is imposed by co-ops in the city when a unit is sold. Co-ops have always wanted to attract long-term residents. Flip taxes were primarily put into place to discourage unit owners from reselling at a profit, or “flipping” the unit. They also offer additional working capital for the building to use.
Flip taxes are determined by the individual policies of the co-op and can vary, typically between 1 and 3% of the sales price of the unit, although some charge a flat fee.
The New York City transfer tax, otherwise known as the Real Property Transfer Tax (RPTT), must be paid whenever real estate changes hands and applies to any property over $25,000. The New York City transfer tax is 1% of the sales price for any home selling for $500,000 or less. Any properties selling for over $500,000 are subject to a city transfer tax of 1.425% of the sales price.
Anyone selling a home in New York State will also be subject to a New York State transfer tax in the amount of 0.4% of the sales price for properties sold below $3 million. For those properties sold for over $3 million, the seller will be responsible for a New York State transfer tax of 0.65% of the sales price.
If you are selling a co-op in New York City, it is fairly typical for both buyer and seller to be charged a move-in or move-out fee. In most cases, a seller will pay a move-out fee to the managing agent when the new owner’s application is submitted. Co-ops may impose other administrative fees as well.
Depending on the property,transaction, and residency of the Seller, the seller can also expect to pay other miscellaneous fees, including:
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Closing costs for single-family homes and condominiums are fairly straightforward. But for those buying or selling a co-op, which represents the majority of New York City housing, closing costs can vary dramatically. While owning property is one thing, in the case of a co-op, you don’t own the property but a share in a corporate structure. Consequently, you are not an owner, but an investor in the corporation that owns the property.
Therefore, you will not only owe the usual city and state fees, but will also owe whatever fees are imposed by the co-op in the application process and administration of a change of hands.
In most cases, seller’s closing costs in New York and New York City are unavoidable, especially when it comes to filing fees, co-op fees, and other state and city taxes.
As either a buy or seller in today’s real estate market, it is always best to understand exactly what to expect in closing costs, so you aren’t unpleasantly surprised at the closing table. There are online closing cost estimators available so you have a good idea of what to expect at closing.
A real estate attorney will prepare the contract for sale based on the terms sheet prepared by the seller and the real estate agent. Most sellers’ lawyers start with a standard form, then add a rider that allows for additional terms to be negotiated between the buyer and the seller.
After the attorneys have completed the contract, both the seller and the buyer sign the contract. The buyer will then send the seller’s attorney a downpayment. If the buyer walks away from the deal without a reason, they can lose the downpayment money. In New York State, the downpayment for a purchase is 10%. The seller’s attorney will deposit this amount in an escrow account.
Once the contract is signed, the seller’s attorney will need to prepare for closing. The attorney will first review the title report that was ordered by the buyer’s lawyer to determine if any issues must be addressed before closing. Then, the seller’s attorney will also prepare all closing documents, including deeds and tax returns. The seller’s lawyer will then compute the amount owed at closing. If there is a mortgage loan, the seller’s attorney will request a payoff letter to determine the exact amount that is owed to the lender.
Lastly, the seller’s attorney will also represent them at closing. The lawyer will advise the seller about the documents they have signed and make sure all payments are made accurately.
What Our Clients Say:
This was actually my first purchase in NYC and I couldn’t have done it without the help of Natalia who guided me through every step of the way. She was always thoughtful and kept things light hearted even when things got to be stressful as home buying can be. She was happy to explain things so that I could be knowledgeable myself and was always looking out for my best interest. I’m looking forward to working with her on my future projects as I feel very lucky to have found her. Truly kind and I would like to recommend her services to anyone reading this.
Ariana Cade
I contacted Sishodia PLC about a commercial real estate deal that I’ve been trying to close. The lawyers here were very friendly and responded to my questions quickly. Ms. Sishodia gave me really sound advice. I would not hesitate to contact her again if I need help with my commercial real estate again. Thank you guys!
Una Eichmann
Ms. Sishodia is a first rate attorney. Her work was timely and flawless. She was extremely helpful and patient when opposing counsel was hi u clearly not up to the task at hand. Her knowledge of the relevant legal issues reflected a thorough understanding and vast experience. She also had real, financial sophistication which made her even more effective. An outstanding attorney who provided great value in every way.
Kim Fennebresque
Natalia is a gem. Not only is she incredibly responsive, but also knowledgeable, accountable and incredibly professional.
I worked with her on the sale of my Manhattan apartment – she helped me navigate all the questions and confusion and truly was a partner to me!
I’d recommend her for any of your real estate legal needs.
Jacqueline Ostrov
Navigating any real estate transaction in New York can be complicated. Having a skilled New York real estate attorney by your side ensures that your transaction is a smooth one and that the closing costs you are paying as the seller are fair and accurate.
At Sishodia PLLC, our New York real estate attorneys pride ourselves on our vast knowledge and experience with real estate transactions throughout the city and the state. If you are selling a piece of real estate in New York, call us at (833) 616-4646 or contact us through our online contact form to schedule an appointment to discuss your transaction.
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