What Type of Closing Costs Can You Expect as a Buyer in NYC?

The Weekly Recap

Good morning and happy Friday! March jobs report came in hot with 303,000 jobs, well above the anticipated number of 200,000. The Fed stopped a push to make climate risk a focus of global financial rules. Bond traders put the odds of a June rate cut at 50% while Morgan Stanley is waging that policymakers will still cut in June. Bloomberg Economics ran a million simulations on US debt outlook and almost all of them showed borrowing is on an unsustainable path. US manufacturing expanded in March for the first time since 2022 while optimism for both IPOs and venture capital continue to increase and Taylor Swift has officially joined the Forbes’ billionaires club.

What Type of Closing Costs Can You Expect as a Buyer in NYC?

Once all the hard work of searching for a home, going through your own cost/benefit analysis, negotiating an offer, getting an accepted offer, going into contract and getting approved by the board of the building you’re buying in, you’re in the home stretch of the process of having access to the home you’ve wanted for so long. In NYC, closing costs range from 1.5% to 6% of the purchase price for buyers. Here are some closing costs to aware of as a BUYER.

Mansion Tax- Any home purchased in NYC that is over $1 million is subject to a mansion tax. The mansion tax scales from 1% up to 3.9% depending on your purchase price. 1% is for homes between $1m and $1.999m, while 3.9% is for homes $25m and above.

Title Insurance- If you’re purchasing a condo you’ll need to get title insurance. It ranges between .5% to .7% of the purchase price and is a one time fee paid by the buyer. Title insurance consists of the owners policy premium, search and endorsement fees as well as the lenders policy premium if you’re financing. Title insurance protects you and your lender against defects of future claims against a home’s title. This is NOT required for CO-OP purchases.

Attorney Fees- Fees vary by attorney and the scope of the deal, your run of the mill straight forward transaction can cost anywhere between $2500-$4000 for the services of the firm. They play an integral part in reviewing due diligence materials, looking at contracts and are part of the closing process.

Mortgage Recording Tax- This is only applicable if you are financing the purchase of your home. The rate is 1.8% for loans below $500k and 1.925% for loans above $500k. This is the largest closing cost for a buyer. This is NOT required for CO-OP Purchases.

New Development- If you are a buyer in a New Development project, the sponsor of the unit (the seller) passes on some selling closing costs onto the buyer such as the sellers attorney fee, the NYS Transfer Tax and the NYC Transfer Tax. All of these are negotiable when it comes time to discussing the offer.

These are some of the main costs you’re looking at when purchasing a home. Below you will see what the closing costs are for a re-sale purchase of a $1,500,000 home financing 80% of the purchase price in both a Condo and a CO-OP.

CO-OP Closing Costs

Condo Closing Costs

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan. (Correction to last week’s chart, it showed data Month over Month not Week over Week as listed in the description)

Mortgage Rate Update

Mortgage rates showed little movement this week, hovering around 6.8%. Since the start of 2024, the 30-year fixed-rate mortgage has not reached seven percent but has not dipped below 6.6 percent either. Inventory is somewhat improving which should help temper home price growth.

News You Can Use

• Powell Says Fed Has Time to Assess Data Before Deciding to Cut Bloomberg

• Fed Officials See Three Rate Cuts ‘Reasonable’ This Year Reuters

• June Fed Rate-Cut Odds At 50% After Strong ISM Data Bloomberg

• Fed on Track to Cut in June Says Morgan Stanley’s Chief Economist Bloomberg

• IPOs are Picking Up Again Axios

• March Jobs Report Comes in Higher than Expected Wall Street Journal

• US Private Payrolls Beat Expectations Yahoo Finance

• A Million Simulations, One Verdict for US Economy: Debt Danger Ahead Bloomberg

• US Manufacturing of the Mend, Grows for First Time in 18 Months Reuters

• Why Does Steam Float Over New York City? NY Times

• Fed Blocks Tough Global Climate Rules for Wall Street Banks Bloomberg

• Focus on Bitcoin in Q1 Overshadows Broadening of US ETF Landscape Reuters

• Taylor Swift Named to Forbes’ Annual Billionaire List Axios

The Deep Insight

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