Transaction Costs: Manhattan Condominium
Posted by Wei Min Tan on March 12, 2019
Transaction costs, better known as “Closing Costs,” when buying or selling property in Manhattan, New York.
The transaction costs for a foreigner buying property in New York is the same as for a U.S. citizen. There are no incremental taxes or stamp duties levied on foreign buyers, unlike in many countries that are trying to curb inflow of foreign investors. A foreigner may decide to own under a more complex entity structure and this would incur additional expenses. However, a local may decide on similar complex entities as well.
For the buyer, the all-in works out to around 6 percent of loan amount if there is mortgage financing. If a cash purchase, it works out to around 2 percent of price. For the seller, transaction costs amount to around 8 percent of price.
We do not have a “stamp duty,” which is a British term. Our equivalent of the stamp duty are the various government taxes listed below.
For The Buyer (in order to significance, estimated)
Mansion Tax (only for property $1 million or higher):
Mansion tax: 1% of property price
Title insurance fee: 0.5% of property price
Market value rider: $250
Mortgage Related Fees (not applicable to all-cash buyers):
Mortgage tax: 1.925% of loan
Origination points: This is a variable used to buy down interest rate, from 0.5% of loan to 4% of loan
Bank application: $1,000
Board Package Fees:
Managing agent: $1,000
Credit report fee: $200 per applicant
Lead based paint disclosure: $50
Purchaser’s attorney: $2,500
Title closer service fee: $200
Bankruptcy search: $100
Patriot search: $100
Sales tax: $50
Rec Mortgage: $300
Rec Deed: $200
RP5217NYC filing fee: $125
Condo unit power of attorney: $150
Condo insurance: $400 to $1500, an annual expense hence not specifically related to closing
Real estate tax : Will be pro-rated back to seller based on what seller has already paid for post closing period.
New York City Transfer Tax: 1.425% of price (only when buying brand new from developer)
New York State Transfer Tax: 0.4% of price (only when buying brand new from developer)
For The Seller (estimated)
New York City Transfer Tax: 1.425% of price
New York State Transfer Tax: 0.4% of price
Broker Fee: Typically 6% of price
Seller’s Attorney: $2,000
Condo Move-Out Fee: $750
Satisfaction of Mortgage: $200
Pickup/payoff fee: $500
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
1) 959 First Avenue in Midtown East. Represented multiple buyers at the $2 million price point. Amazing detailing and finishes. Property reserved at pre-construction stage and completed about 2 years later. This is a Toll Brothers development and reservation deposit was a very attractive 10 percent. Rented to high quality tenants since closing.
2) Sixty Four Condo, Upper East Side. Top amenity building in the Upper East Side’s 60s with an amazing roof deck with BBQ grill (pictured), a WOW factor for tenants. At purchase, the Q subway line extension was in progress and it is now completed. Represented multiple transactions at the $1 million price point when the building was converted.
3) Greenwich Club, 35th floor water view one bedroom apartment facing south. Around $800,000 at purchase, appreciated 40 percent since then. A high floor, south facing, water view is the most desirable view in Manhattan. Purchased with long term tenant in place hence no vacancy related to finding a new tenant.
Article updated March 12, 2019
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