UPDATE: NYS 2020 budget has updated the mansion tax rate. Take a look here to see how it has increased.
As a first time buyer or seller in NYC, the idea of closing costs, and what you can expect to pay for specific types of real estate transactions (coop vs condo vs single/multi family) can be confusing.
Buyer Closing Costs
Coop closing costs are relatively straight forward and always lower than for condos. For properties under $1 million, closing costs will be roughly around $8500; over $1M, it is this amount plus 1% of the purchase price. This is because aside from the mansion tax, coop closing costs are mostly flat fees not tied to value, such as loan origination fees which vary by bank, attorney's fees, certain recording fees, and board application fees.
Condo and townhouse closing costs are higher because in addition to these flat fees (and mansion tax, if applicable), condo buyers must purchase title insurance which is usually 0.5-0.8% of the purchase price. For condo purchasers who are financing, the costs are even greater as there are significant mortgage recording taxes (1.8 or 1.925% fo the financed amount) which also gets tacked on.
The following chart outlines most of the costs and compares the two types of properties. Please also refer to our detailed breakdown of closing costs for coop, condo, and townhouses.
Seller Closing Costs
Sell-side closing costs will be significantly higher than buy-side, largely due to broker fees. Since sellers pay for broker fees on both sides of the service, they are on the hook for a full 6% commission, in addition to other closing costs. The difference in condo and coop closing costs is only significant if the coop has a flip tax, which would make that more expensive.