Negotiations + Closings

A closing cost guide for buyers and sellers in NYC

  • Buyers need to budget for 2 to 4 percent of the purchase price in closing costs
  • Sellers can expect to pay from 8 to 10 percent of the sales price on fees and taxes
  • There are strategies to help both buyers and sellers lower closing cost payments
Freelance journalist and editor Evelyn Battaglia
By Evelyn Battaglia  |
January 22, 2024 - 2:30PM
closing costs new york city

Depending on whether the market favors buyers or sellers, you can negotiate who pays various closing costs.


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

For sellers, closing costs take a bite out of the proceeds. For buyers, they can have a real impact on your buying power and may affect your decision to buy 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. So when a market is slow, inventory is high, or an apartment is hard to sell, a seller or developer may be willing to cover some costs in order to seal a deal.

“Overall, when determining whether sellers are willing to negotiate closing costs or price, it really depends on the type of property and the location. Some properties are so desirable that there are bidding wars. And in 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, of course, will vary widely—and some ways that you can save. 

[Editor’s Note: A previous version of the article ran in January 2023. We are presenting it again with updated information for January 2024.]

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 if 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 is different based on the type of property, sales price, financing, and market. Here’s a breakdown of some of these costs. 

*Broker fees: Buyers should brace for an additional fee, because thanks to new rules for REBNY brokers, sellers are now required to make separate commission offers to the buy- and sell-side brokers. That means there is a slim but real possibility buyers can end up paying some or all of the broker fee if the 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: A standard range is from $3,000 to $5,000, higher for a more complex transaction, such as purchases involving two units that you plan to combine. This is not an area to skimp on, so steer clear of attorneys who say they can do this for $1,500 or who don't specialize in NYC real estate closings. 

Mansion tax: The mansion tax kicks in at 1 percent on co-ops, condos, and townhouses 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 is $500,000 or less and 1.425 percent on purchases of $500,000 or more, plus a .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) as well as part of 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 depends also on the broader market. You may be more likely to negotiate these types 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. That’s when a sponsor is more willing to make a deal.

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 a very 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, which can range from a few hundred to a couple of thousand dollars each. 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 the prospective purchaser or the broker a list of what is needed, as well as fees," says Ryan Greer, senior vice president of National Cooperative Bank (a Brick Underground sponsor). 

Title Insurance (condos & townhouses only): Title insurance can vary, but you can estimate .45 percent of the price, so for a $1 million property, it can be as much as $4,500. (For more information read: ”What is title insurance, and why do I need it?"

Co-op buyers do not have to buy title insurance, or pay a mortgage recording tax, because rather than a transfer of real property, co-op purchases are technically the transfer of shares in a cooperative corporation.

A closing cost guide for buyers and sellers in NYC

What buyers can
expect to pay

  • Attorney fees range from $3,000 to $5,000.
  • The mansion tax kicks in for purchases over $1 million.
  • Condos and townhouses require a mortgage recording tax (if you are financing) and title insurance as well as a transfer tax for brand-new units.
What sellers can 
expect to pay
  • Attorney fees start at $3,000, plus all or part of the 6 percent broker fee.
  • Transfer tax: 1.4 percent for sales of $500,000 or less; 1.825 percent for sales over $500,000; incrementally more for sales over $3 million. 
  • Some co-op and condo buildings have flip taxes ranging from 1 to 5 percent (or as high as 10 percent) of the purchase price. 
How buyers can lower closing costs
  • Buy a brand new condo in a building with a hefty tax abatement—or ask for a closing credit.
  • Or buy an almost new (first resale) condo to avoid having to pay the sponsor's closing costs.
  • If you are taking out a mortgage, look into whether a purchase CEMA loan makes sense. 

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 new 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 listing and buyer’s brokers. On a $1 million apartment, a 6 percent broker fee comes to $60,000. Now sellers must make compensation offers directly to buyers' brokers. (REBNY sell-side brokers are no longer allowed to pay the buy-side broker.) With the fees no longer combined, 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 state and city combined 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 2 percent of the purchase price up to 3 to 5 percent. Some buildings 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.  

In some buildings, the buyer pays, and in others the seller. In slower markets, a seller may be more willing to pay the flip tax in order to close the deal, even if it's technically the buyer's responsibility. “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.

Pro Tip:

Looking to buy a co-op apartment? National Cooperative Bank offers competitive rates and easy pre-qualification. With 40 years of lending to buyers in New York City, NCB is the bank for co-ops. After all, Cooperative is our middle name! Call us at (202) 349-7455 or email Ryan Greer [email protected] #507534. Equal Housing Lender.

How to lower your closing costs

Save on the broker's fee: At 5 to 6 percent of the sale price, a broker’s commission is 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. Keep in mind there are risks associated with this 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. This means the seller needs to have a mortgage with a high enough principal left to make it worthwhile. In addition, both the seller’s and the buyer’s banks need to agree to it.

“If all goes well, depending on the loan amounts, there is 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. There are usually $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 their units. If the sponsor doesn’t want to bring down the purchase price, which could impact the sales price on other units, they may offer closing credits where the buyer gets a sum given back to them at closing. 

It might seem like an odd thing to do, but it allows a building to keep the purchase price technically the same in order to maintain pricing on other units. In this way, the sponsor is still able 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 has a helpful breakdown. 

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A condo or co-op with lower carrying costs can make buying more doable. Here's where to find one: If you want lower carrying costs, brokers suggest you look for buildings with tax abatements, revise your list of must-have amenities and learn the financials of a building to avoid increases that would overstretch your budget. 

How do high carrying costs lower the sales price of a co-op or condo? Is there a formula to figure this out?: We asked NYC’s real estate experts to tell us how they figure out the relationship between co-op and condo carrying costs and an apartment's sales price. 

How to negotiate the price, concessions, and other terms when buying a brand new condo: When buying a new condo don't assume you'll get a discount on the price. Think of it as a package deal and consider negotiating the deposit, the contingency, or the closing details. 

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

Freelance journalist and editor Evelyn Battaglia

Evelyn Battaglia

Contributing Writer

Freelance journalist and editor Evelyn Battaglia has been immersed in all things home—decorating, organizing, gardening, and cooking—for over two decades, notably as an executive editor at Martha Stewart Omnimedia, where she helped produce many best-selling books. As a contributing writer at Brick Underground, Evelyn specializes in deeply reported only-in-New-York renovation topics brimming with real-life examples and practical advice.

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