Closing costs in the State of New York

The Empire State has its share of oddities – including a long list of costs to close the deal.

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New York State comes in second for the most expensive closing costs in the US — not surprising, given it also boasts some of the most expensive real estate. In the Empire State, homebuyers will need to cough up between 3.81% and 5.08% of their property’s purchase price to cover closing.

Average closing costs in New York

Across the state, the average home sale price is between US$300,000 and US$400,000. If you buy a home in that price range, the average closing costs before taxes are approximately US$4,915. These fees pay for processing, appraisal and recording fees, as well as title insurance, municipal searches and more.

New York state is also notorious for its taxes, and real estate is no exception. If you live in the city, you face property taxes and the New York City mortgage tax — which can be anywhere from 1.80% to 2.80% of your purchase price — resulting in about US$15,254 in closing costs after taxes.

New York City’s Mansion Tax

If you’re buying a home for US$1 million or more in the Big Apple, your purchase is subject to the New York City mansion tax. It’s a mere 1% of your purchase price – but it ends up being no small tax on one million dollars. And you’ll have to pay it within 15 days of your closing.

Sellers don’t get away scot-free, either. If you’re the home seller, you pay fees as well as a New York State or New York City transfer tax. As a foreign seller, you’ll also face other taxes.

How to pay for your US property as a Canadian

Most Canadian mortgage lenders, including online lenders, banks and credit unions, will allow Canadians to take out a mortgage on a US property. What’s more, you can pay your monthly payments in Canadian dollars, which helps avoid exchange rate fluctuations and exchange fees.

Instead of taking out a mortgage on a US property, some Canadians use the equity in their current home to pay for their new US home in cash. With this option, you could potentially take out a home equity line of credit (HELOC) or a home equity loan on your Canadian residence.

Down payment and exchange rates

Since you’re buying property in the US, most Canadian mortgage lenders will require that you put at least 20% down on your new American home, as well as have enough cash on hand to pay the closing costs. Exchange rates (and possible exchange fees) will apply when transferring your down payment and closing costs, so you’ll need to consider this additional cost.

Once you send your down payment and closing costs, most Canadian mortgage lenders will allow you to pay for your US property in Canada dollars – which means you can avoid the exchange rate on your ongoing monthly mortgage payments.

Who pays closing costs in New York?

In New York, closing costs are split between the buyer and the seller. These are the fees and taxes you can expect to pay when purchasing or selling a home. They apply across New York State and New York City, unless otherwise indicated.

Buyers (all costs in USD)

For condos, townhouses and single-family homes

  • Attorney: Varies
  • Bank fees: $350–$750
  • Application fee: $350
  • Processing fee: $330
  • Appraisal fee: $300–$1,500, depending on sale price
  • Recording fees: $250–$750
  • Fee title insurance: Varies
  • Mortgage title insurance: Varies
  • Municipal search: $350–$500
  • Credit report fee: $15
  • New York City mansion tax: 1% of purchase when sale price is $1 million or more
  • Miscellaneous condominium fees: Varies
  • Mortgage fees: Varies

Potential fees for co-ops

  • Lien search: $250–$350
  • UCC-1 filing fee: $100
  • Recognition agreement fee: $200 or more
  • Miscellaneous co-op charges: Varies

Sellers (all costs in USD)

For condos, townhouses and single-family homes

  • Broker: Usually 6%
  • Attorney: Varies
  • Processing fee: $450 or more
  • New York City transfer tax
    • Residential
      • Properties of up to $500,000: 1%
      • Properties of $500,000 or more: 1.425%
    • Commercial
      • Properties of up to $500,000: 1.425%
      • Properties of $500,000 or more: 2.625%
  • Administrative fee
    • Residential deed transfers: $75
    • Commercial deed transfers: $165
  • New York State transfer tax: $4 per $1,000
  • New York State equalization fee: $75
  • Pickup or payoff fee: $250–$500
  • UCC-3 filing fee: $100
  • Miscellaneous condominium fees: Varies

Potential fees for co-ops

  • Co-op attorney: Varies
  • Administrative fee for non-deed transfers: $50
  • Flip tax: 1% to 3% of purchase price, if applicable
  • Stock transfer tax: $0.05 per share
  • Move-out fee: Varies
  • Miscellaneous co-op fees: Varies

How do closing costs in New York compare to other US states?

New York has the second-highest closing costs in the country, trailing only Washington, DC. In terms of its closing cost-to-sale price before taxes, it’s fourth-highest out of the 50 states.

What to know about buying a house, condo or co-op in New York City

While closing costs for condos and homes are straightforward, co-ops are a different ballgame — and they make up 75% of housing in New York City.

Unlike condos and houses, co-ops are owned by a corporation. If you buy an apartment inside a co-op building, you’re not actually purchasing property: You’re buying shares of the corporation. In other words, you’re an investor — not an owner.

All of these factors affect closing costs for the buyer and the seller. As a seller, you’ll pay a flip tax, a stock transfer tax, a move-out fee and miscellaneous co-op fees, along with a slew of standard city and state fees.

If you’re buying a condo, you’ll typically need to prove that you have the funds to cover up to two years’ worth of fees and mortgage payments after closing costs.

Bottom line

If you’re buying or selling property in New York, prepare to pay a lot at closing – plus any additional fees or taxes as a foreign buyer. The state of NY has the second-highest closing costs in the country.

While most closing costs are out of your control, you can save money by shopping around for an affordable mortgage that meets your budget. You can also save by finding a Canadian bank that offers free international money transfers and competitive exchange rates.

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