The buyer's and seller's guide to NYC closing costs

Whether you're buying or selling real estate in New York City, you face hefty taxes and fees at the closing table—including some that you may expect and others unique to New York. 

For sellers, closing costs take a serious bite out of the proceeds. For buyers, they can have a tangible impact on your purchasing power and may affect your decision to choose one apartment over another. So it's crucial to understand the big picture before you begin your search.

The responsibility for some of these taxes is not set in stone. When the market is slow, inventory is high, or an apartment is difficult to sell, a seller or developer may be willing to cover some costs to seal a deal.

“Overall, when determining whether sellers are willing to negotiate closing costs or price, it depends on the property type and location. Some properties are so desirable that there are bidding wars. And for others, purchasers have more bargaining power,” says Adam Stone, a real estate attorney at The Stone Law Firm.

Read on for an overview of what you’ll pay in closing costs—the actual sum will vary widely—and some ways you can save. 

[Editor’s note: A previous version of the article ran in January 2024. We are presenting it again with updated information for January 2025.]

Buyers: Plan to pay 2 to 4 percent* of the purchase price of a co-op, condo, or townhouse 

A good rule of thumb is to set aside roughly 2 to 3 percent of the purchase price. Bump that to 3 to 4 percent if the apartment is over $1 million or you're buying a condo. If it's a brand-new condo, prepare to pay up to 5 percent of the purchase price in closing costs.

Every deal differs based on the property type, sales price, financing, and market. Here’s a breakdown of some of these costs. 

*Broker fees: Buyers should prepare for a potential additional cost because, thanks to new rules for REBNY brokers, sellers are now required to make separate commission offers to buy- and sell-side brokers. This means that a buyer may end up paying some or all of the broker fee if a seller offers your broker a fee that is too low. In this case, you'll have to budget an additional 1 to 3 percent of the purchase price for the broker fee. 

Bank fees: If you're taking out a mortgage, expect to pay $3,000 to $4,000 in bank fees, including your bank attorney’s fees and an appraisal. 

Attorney fees: The standard range is $3,000 to $5,000, but they can be higher for a more complex transaction, such as purchases involving two units you plan to combine. This is not an area to skimp on, so steer clear of attorneys who say they can do it for $1,500 or don't specialize in NYC real estate closings. 

Mansion tax: The mansion tax kicks in at 1 percent on co-op, condo, and townhouse sales of $1 million to $1.999 million—and rises in stages to 3.9 percent on sales prices of $25 million or above. This is typically paid by the buyer, not the seller, and applies even if your so-called mansion is a 600-square-foot one bedroom. 

Mortgage recording tax (condos and townhouses only): Condo and townhouse buyers who take out a mortgage must pay a state and city mortgage tax of 1.925 percent on loans over $500,000 or 1.8 percent for loans under $500,000 (note the tax is based on the loan amount, not the purchase price). On a $1 million condo with an $800,000 mortgage, that's $15,400.

Transfer taxes (sponsor co-op and new condo buyers only): If you buy a brand-new condo or a co-op directly from the sponsor, you may also wind up paying a NYC transfer tax of 1 percent of the purchase price on purchases of $500,000 or less and 1.425 percent on purchases of $500,000 or more, plus a 0.4 percent transfer tax to New York State. That's $14,250 on a $1 million condo. On a new condo purchase, you might also be expected to pay for part of the super's apartment (which can amount to thousands of dollars) and the building's insurance costs for the first year.

In a slow market, developers ("sponsors") are sometimes willing to pay your transfer tax, attorneys fees, and other miscellaneous fees as an incentive to close a deal with them. Don’t be shy about asking for these types of sales inducements. What’s offered varies greatly from building to building and also depends on the broader market. You may be more likely to negotiate these kinds of perks if the developer has just a few units left to sell or is trying to reach a certain percentage of apartments in contract. 

Homeowners insurance: Lenders, as well as co-op and condo boards, will require you to take out appropriate homeowners insurance. Expect to pay anywhere from $350 per year for the most basic policy to around $1,500-$2,500 annually for good coverage on a $1 million two-bedroom apartment.  

Building fees: Most condo and co-op buildings charge move-in and move-out fees, ranging from a few hundred to a couple of thousand dollars each. You should also expect to pay a managing agent and co-op attorney fee of around $1,500 and board application fees of $500 to $700.

When you apply, the board should send you or your broker a list of what's involved. 

Title insurance (condos and townhouses only): The cost of title insurance can vary, but you can estimate it at 0.45 percent of the price, which can be as much as $4,500 for a $1 million property. 

Co-op buyers do not have to buy title insurance or pay a mortgage recording tax because they are technically transferring shares in a cooperative corporation rather than transferring real property.

Sellers: Budget for closing costs of 8 to 10 percent of the purchase price

Sellers can expect to pay a lot more in closing costs than buyers—in large part because of their responsibility for paying the broker fee. 

Broker fees: Before REBNY's policy went into effect on January 1st, 2024, sellers were expected to cover the broker fee, which is traditionally 6 percent, split equally between the seller's and buyer’s brokers. On a $1 million apartment, a 6 percent broker fee comes to $60,000. Now a seller must make a separate compensation offer directly to the buyer's broker and some sellers may opt to offer lower commissions to the buyer's broker.

Attorney fees: Attorney fees start at $3,000 for a standard transaction—and can go higher.

Transfer taxes: Sellers pay a combined state and city transfer tax of 1.825 percent if the sale price is over $500,000 or 1.4 percent for deals $500,000 or less. That works out to $18,250 on a $1 million sale, and $7,000 on a $500,000 sale. If your apartment or townhouse sells for $3 million or more, the tax increases by 0.25 percent. 

Flip taxes: Some co-op and condo buildings have flip taxes (also known as transfer fees) ranging anywhere from 1 to 5 percent of the purchase price; others charge 10 percent of the seller's profit. Flip taxes are not really taxes, but a fee paid to support building reserves and capital improvements.  

Whether the buyer or seller pays depends on the building. Even when it's the buyer's responsibility, a seller may be more willing to pay the flip tax in order to close the deal in a slower market. “A knowledgeable buyer is going to try to get a transfer fee covered,” Stone says.

Building fees: Most condo and co-op buildings charge move-in and move-out fees, which can range from a few hundred to a couple of thousand dollars each, and a managing agent and co-op attorney fee of around $1,500.

How to lower your closing costs

Save on the broker's fee: At around 5 to 6 percent of the sale price, broker commissions are by far the largest closing cost for sellers. Aside from trying to negotiate the fee down, consider working with a brokerage that rebates part of its commission to you.

Structure the deal to your advantage: If you’re buying a $2 million condo, there’s not much you can do about paying the mansion tax. But if your purchase is close to the $1 million mark, there may be a way to structure the deal to avoid the extra assessment. 

Consult an attorney or tax expert on whether you can work out an agreement with the seller to keep the purchase itself under $1 million. Know there are risks associated if you end up being audited. For further details, read: ”Mansion or not, you may not escape that so-called mansion tax.”

Buy new—in a building with a hefty tax abatement: Assuming the apartment fits within your set budget range, and the savings aren't canceled out by the expense of covering the developer's closing costs, buying into a building with a heavy tax abatement can significantly lower the cost of your monthlies for years to come. Check out: "Why a tax abatement should be on your condo or co-op wishlist."

Buy almost new: A newly built condo is already going to be pricier than your average co-op; you need to factor in the expense of paying the developer’s closing costs (unless you're able to convince the developer to pay them), and it can be quite a bit more than a similar apartment that’s only slightly lived in. 

“A lot of people come in wanting new construction, but if they can wait for the first resale in new construction, that’s a great way to save,” says Tyler Whitman, an agent at The Agency.

Shop around for a mortgage banker: Some loan officers will compete to get your business by offering to cover various expenses, like the credit check or UCC filing fee, which can save $50 or $100 here and there, Whitman says. (Of course, it’s still probably the smartest move to choose a mortgage based on the best interest rate.) For more details, check out: "What's the difference between getting a mortgage for a co-op and a condo?”

Save on your mortgage recording tax: If you’re taking out a mortgage and your seller is still paying off their own mortgage, you can ask your attorney if a purchase consolidation extension and modification agreement—or "purchase CEMA"—makes sense. This little-known mortgage maneuver involves combining the seller’s mortgage with the buyer’s mortgage and then legally modifying the terms to current rates but the circumstances of your deal need to line up correctly in order to do it. To make it worthwhile, however, the seller's mortgage must have enough principal left to pay off. In addition, both parties' banks need to agree to it.

“If all goes well, depending on the loan amounts, there is the potential to save tens of thousands of dollars,” Stone says.

Shaun Pappas, a partner at Starr Associates, says he’s seen this strategy put to use. “It is generally a way for a seller to provide a buyer a reduction in their closing costs without feeling it in their own pocket,” he notes. The result in NYC is a saving on your mortgage tax of as much as 1.925 percent of the seller’s or buyer’s mortgage amount, whichever is lower. 

For example, if the seller has an $800,000 balance on their mortgage, and the buyer is getting a $1,000,000 mortgage, then the mortgage tax to be saved by doing a purchase CEMA is approximately $15,400, offset by the usual $1,000-$2,000 in extra fees to achieve those savings. For more details, read: "What is a CEMA loan, and when does it make sense to get one?”

Ask for a closing credit: Developers selling new condos may be willing to pay a buyer a closing credit rather than reduce the asking price of a unit, which could impact the sales price on other units. In these cases, they may offer to refund the buyer a sum at closing. 

It might seem like an odd thing to do, but this credit allows the sponsor to say they are still getting a certain dollar amount per square foot. 

Additional resources: For a detailed list of what you'll pay, Abrams Garfinkel Margolis Bergson has a helpful breakdown. 

—Earlier versions of this article contained reporting and writing by Emily Myers.