What Will My Closing Costs Be?

When we consult with a client about representing them in purchasing or selling a home, we are usually asked about closing costs. We like to have this discussion up front with clients so that they know what to expect when we get to the closing table.

While every transaction is different, in our experience, there are certain closing costs that are standard for purchasers and sellers. The following closing costs are standard for sellers in New York:

1. New York State Transfer Tax. Whenever there is a transfer of real estate in New York, the state charges a transfer tax on the transfer. The rate is $2.00 for every $500.00 and applies to the transfer of any real property in New York State.
2. Real Estate Brokers. In New York, if there are real estate brokers involved in the transaction, seller is responsible for paying the cost of both purchaser’s and seller’s broker.
3. Legal Fee. Each party to a real estate transaction is responsible for paying their own legal fees.
4. Condo or Co-Op Fees. If a client is selling a condominium or co-op, there are always fees charged by the homeowners’ association or management company that are associated with the sale, such as a move-out fee (which is normally refundable) and a fee to the attorney preparing the documents on behalf of the condo or co-op.
5. Pick-Up Fee. If seller has a mortgage that must be paid off at closing, there will be a pick-up fee paid to the title closer for performing that service.

The following costs are standard for purchaser’s in New York:

1. Title Insurance. We always advise clients who are purchasing a property of what the potential costs will be for title insurance. All of the title searches, as well as the premium for title insurance, will be included on the title invoice at closing. In addition, depending on the time of year that a client will be closing, they may have to pay property taxes up front at closing, which will also appear on the title invoice at closing.
2. Legal Fee. As set forth above, each party to a real estate transaction is responsible for paying their own legal fees.
3. Adjustments for Taxes. Unless a client is purchasing a co-op, the purchaser will have to reimburse seller for property taxes they have already paid for the portion of the fiscal year after the parties close.
4. Condo or Co-Op Fees. If a client is purchasing a condominium or co-op, there are always fees charged by the homeowners’ association or management company that are associated with the purchase, such as a move-in fee/security deposit (which is normally refundable), a fee to the attorney preparing the documents on behalf of the condo or co-op, capital contribution (normally in the amount of one or two months of common charges), and the next month’s common charges or maintenance.
5. Survey. If seller does not have a survey, or has a survey that is several years old, we always recommend getting a new survey. This cost is borne by the purchaser and if the survey is ordered through the title company, the cost will be paid at closing.

Our goal is to avoid surprises, to the extent that we can, for our clients at closing. In an effort to avoid those unwanted financial surprises at closing, we like to discuss these costs with clients up front so that they can be prepared. There can always be things that are unexpected, and each transaction is different, but we have found that by advising of the costs discussed above, the chance that a surprise will pop up for the client as we approach closing are much lower!

Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.