Closing Costs
Taxes, bank fees, flip tax, and more
You probably already know that closing costs for buyers and sellers are based on completely different factors. Sellers, for example, pay city and state transfer taxes when they resell their apartments; and they are usually on the hook for the so-called "flip tax," which many coops use as a way of fortifying their reserve accounts. (In some cases, buyers are required to pay this – and sometimes it's a 50-50 split; make sure your agent or attorney verifies this before you sign a contract.)
For buyers, it's a mixed bag. If you're buying in a new development, and the market is strong, the developer will usually expect you to pick up their transfer taxes, attorney fees and more. (It sounds crazy because it is!) And if you're taking out a mortgage to buy a condo or a house, you will pay a mortgage-recording tax of 1.8% on loans of up to $500,000, and 1.925% above $500,000. (Coop purchases are exempt from this tax, as are all-cash purchases, obviously.)
Add to this very mixed bag of considerations attorney fees, condo and coop application and move-in fees, lien searches, appraisals and… I'm sure I'm forgetting something!
My closing cost guides for condos, co-ops and townhouses will help you tabulate the costs of your upcoming sale or purchase; just ask and I will send them over. An informed consumer is a good consumer – and it's a great idea to ask your attorney to confirm your calculations.
