Buyer Closing Costs Calculator

Overview

Broker Commission

Real estate commissions are not set by law and are fully negotiable. With that in mind, real estate agents are 100% commission-based and are compensated for their services. Buyers are best represented by a professional real estate agent when making one of the significant and complex financial transactions of their lifetime. Buyers deserve an expert advisor to guide them through the process and protect their interests.

The traditional real estate brokerage commission is approximately 6% of the sale price, and is generally paid by the seller at Closing. The commission is most often baked into the sale price and split 50/50 between the Seller’s agent and your Buyer’s agent.

Approximately 90% of buyers in New York City work with buyer agents. So the vast majority of all sale transactions have 2 agents involved:

1. Seller’s Agent

2. Buyer’s Agent

There is the possibility a seller will not pay the buyer agent’s fee — us. In that case, we will further negotiate our commission of 2% - 3% of the gross purchase price. Our goal, however, is always to keep the traditional structure of baking this into the sale price so that you are not paying out of pocket. Again, it’s all a negotiation and we have you covered.

Purchase CEMA

A Purchase CEMA is also known as a Purchase Consolidation Extension Modification Agreement, i.e, CEMA. Buyers can purchase and negotiate a CEMA Mortgage. A Purchase CEMA is a strategy for reducing your closing costs when buying or selling a condo or house in New York City. The Purchase CEMA itself is the act of assigning a seller’s existing mortgage to the buyer. The CEMA reduces the amount of new loan money which must be originated, and this reduces two closing costs: the buyer’s mortgage recording tax bill and the seller’s New York State transfer tax bill.

1. Purchase CEMA
   
   A Purchase CEMA is a strategy for reducing your closing costs when buying or selling a condo or house in New York City. A Purchase CEMA is also known as a Purchase Consolidation Extension Modification Agreement. The Purchase CEMA itself is the act of assigning a seller’s existing mortgage to the buyer. The CEMA reduces the amount of new loan money which must be originated, and this reduces two closing costs: the buyer’s Mortgage Recording Tax bill and the seller’s New York State Transfer Tax bill. Because a Purchase CEMA requires the permission of the seller and the buyer saves more than the seller, most sellers will use this leverage to propose an equal split of the total savings between the buyer and seller.
   

2. Seller Savings with a Purchase CEMA
   
   Under a Purchase CEMA, the seller does not have to pay the New York State Transfer Tax on any existing loan amount which is assigned to the purchaser. The NY State Transfer Tax is currently 0.4% for most residential sales below $3 million, and 0.65% for sales of $3 million or more.
   

3. Buyer Savings with a Purchase CEMA
   
   Under a Purchase CEMA, the buyer may not have to pay the Mortgage Recording Tax on any existing loan amount which is assigned from the seller to the buyer. The Mortgage Recording Tax for most residential transactions is currently 2.05% for loans under $500k and 2.175% for loans of $500k or more, however most lenders cover 0.25% of the tax (excluding commercial transactions).
   

4. Mortgage Recording Tax
   
   The NYC Mortgage Recording Tax is a buyer closing cost which is 2.05% for loans below $500k and 2.175% for loans of $500k or more. Most lenders cover 0.25% of the tax (excluding commercial transactions). The amount of the Mortgage Recording Tax is based on the amount of new loan being underwritten. This means your MRT bill will continue to go down as you increase the size of your down payment. You can reduce the amount of the Mortgage Recording Tax by negotiating a Purchase CEMA with the seller.
   

5. NYS Transfer Tax
   
   The New York State Transfer Tax is 0.4% for sales below $3 million and 0.65% for sales of $3 million or more. The higher rate of 0.65% kicks-in at a lower threshold of $2 million for commercial transactions and residential properties with 4 or more units. Prior to the New York Tax Law amendments in 2019, the NYS Transfer Tax was previously a fixed 0.4% regardless of the sale price. The New York State Transfer Tax is authorized by New York Consolidated Laws, Tax Law – TAX § 1402.

Progressive NY State Transfer Taxes & Mansion Tax

Below is a summary of New York State’s Transfer Tax and the Mansion Tax.

Additional Changes in the New York State Budget:

1. For residential purchases greater than $3 million, the NYS Transfer Tax increases to 0.65%

2. For commercial purchases greater than $2 million, the NYS Transfer Tax increases to 0.65%

3. The NYS income tax rate (for household income over $1 million/year) will not be increased again until 2024

4. The proceeds from these new taxes are earmarked for the MTA for subway repairs and upgrades

Title Insurance

Title insurance is an insurance policy against any defects or future claims against the title for issues which were unknown at the time of purchase when the original title search was conducted. This means you’ll be protected if a previous owner comes out of the woodwork ten years after your purchase, and claims that there was a mistake in the chain of title and that he never sold the property to the seller of your property, which means the seller of your property didn’t have a right to sell it to you. Title insurance comes in the form of an owner’s policy (which protects your home equity based on the purchase price) and a lender’s policy which insures your mortgage lender from any title-related losses on your loan’s principal balance. You can also purchase an additional insurance policy called a ‘Market Value Rider’ which will automatically step-up the amount of your Title Insurance policy coverage to match appreciation in the market value over time.

Attorney Fees

Real estate attorneys in NYC charge a flat fee between $2,500 to $5,000. The flat fee rates you are quoted will vary based on the complexity of your real estate transaction. Lawyer fees can be as high as $5,000 for a more complex transaction and for new developments. Real estate attorney fees are typically taken at closing and will be part of the closing costs mentioned in your lawyer’s closing statement. Some lawyers may negotiate for half or some other portion of the fee to be paid upfront, with the remainder to be paid at closing.

NEW CONSTRUCTION & SPONSOR UNITS

If you’re buying a sponsor unit (new construction), it’s customary for the buyer to also cover the seller’s attorney fees in addition to the NYC and NYS Transfer Taxes. This is the reverse of a traditional private resale where sellers pay the Transfer Taxes and cover their own attorney fees. Keep in mind that sponsor closing costs are negotiable.

Move-In Deposit & Fees

Most condos and co-ops in NYC charge buyers a refundable move-in deposit in addition to a non-refundable move-in fee. Exact fees vary by building, and they are usually listed in the resale application (also know as board application). Keep in mind that these fees are usually non-negotiable, as they are contractual based on the underlying management agreement in place between a condo or co-op building and the managing agent.

Board Application Fees

Most Condos and co-ops in NYC charge buyers a non-refundable board application fee. The fee is customarily collected upon submission of your board application along with move-in fees & deposits from the buyer and move-out fees & deposits from the seller. Always check your specific coop purchase application to see what forms of payment are accepted. Even if personal checks are permitted, we always suggest sending certified checks because it will eliminate the processing time associated with waiting for your checks to clear the bank. Keep in mind that this fee is non-refundable, meaning you won’t receive any money back if you’re unfortunate enough to be rejected by the co-op board.

Townhouses, Brownstones, and Multi-Family transactions do not have Applications or subsequent fees.

Mortgage Recording Tax

The NYC Mortgage Recording Tax is a buyer closing cost which is 1.8% for loans below $500k and 1.925% for loans of $500k or more. The amount of the Mortgage Recording Tax is based on the amount of new loan being underwritten. This means your MRT bill will continue to go down as you increase the size of your down payment. You can reduce the amount of the Mortgage Recording Tax by negotiating a Purchase CEMA with the seller.

NYC Mortgage Recording Tax rates are as follows:

Mortgage Related Fees

The typical mortgage application fee in NYC is $500 to $1000. Some banks will waive this fee for their preferred clients who have above $100k to $250k on deposit with the bank. The average appraisal fee is ~$750. Banks usually will not offer to cover this, as they have to hire and pay a 3rd party appraiser. Other mortgage-related expenses include a Mortgage Recording Fee of ~$200.