Seller Closing Costs in NYC: What Every Condo & Co-op Owner Should Know

Seller Closing Costs in NYC: What Every Condo & Co-op Owner Should Know

Selling a home in New York City is a significant financial event, and understanding your closing costs is the key to a smooth and profitable transaction. While the excitement of a signed contract is high, the closing table can present a sobering reality if you haven't budgeted properly. For sellers, these costs can range from 8% to 10% of the sale price, making them a crucial part of your financial planning.

The total amount you'll pay depends largely on two factors: the sale price and the type of property you're selling. Here, we break down the costs and compare what you can expect when selling a condo versus a co-op in NYC.

The Major Costs: A Breakdown

Several costs are common to nearly all NYC real estate sales, regardless of whether you’re selling a condo or a co-op. These are typically the largest expenses and should be the first items in your budget.

1. Broker Commission

This is almost always the single largest closing cost for a seller. The broker commission is the fee paid to the real estate brokerage for their services.

• Average Cost: 5% to 6% of the final sale price.

• Key Details: This fee is typically paid entirely by the seller and is then split between the seller’s agent and the buyer’s agent. While this percentage is negotiable, the 5-6% rate remains the industry standard in NYC.

2. New York State & New York City Transfer Taxes

These are the most significant government-imposed taxes you will pay as a seller. They are calculated based on the purchase price and are non-negotiable.

• New York State Transfer Tax:

  • Rate: 0.4% ($2.00 for every $500) of the sale price.

• New York City Real Property Transfer Tax (RPTT):

  • For Residential Condos, Co-ops, and 1-3 Family Homes:

    • 1% of the price if the sale is $500,000 or less.

    • 1.425% of the price if the sale is greater than $500,000.

• What You Pay: The total government transfer tax for a seller on a sale over $500,000 is 1.825% (0.4% NYS + 1.425% NYC).

Condo vs. Co-op: Where the Costs Diverge

While the core expenses above are similar for both property types, the structure of the transaction itself leads to some critical differences in other fees.

The Co-op "Flip Tax" (Transfer Fee)

This is the most common and often most expensive cost unique to co-ops. A flip tax is not a government tax but a fee imposed by the co-op's board to generate revenue for the building's reserve fund and capital improvements.

• How it Works: The "tax" is usually paid by the seller, although the specific rules can vary greatly from building to building. You might encounter a flip tax calculated as:

  • A percentage of the gross sale price (e.g., 1-3%).

  • A percentage of the seller's net profit from the sale.

  • A flat fee.

  • An amount per share of stock owned.

• Why It Matters: Because flip taxes are so variable, it is essential to check the building’s offering plan and bylaws with your attorney before listing your unit. A 2% flip tax on a $1.5 million sale would be an additional $30,000 in closing costs, so it’s a number you must know up front.

Attorney & Administrative Fees

• Seller's Attorney: Both condo and co-op sellers will pay their own real estate attorney a flat fee for their services, which typically range from $2,500 to $5,000. This is an essential cost, as your attorney handles the contract, title review, and closing process.

• Building-Specific Fees: Both types of buildings charge fees for managing the transaction.

A UCC-3 Filing Fee is a cost unique to co-op sales. When a seller has a mortgage on their co-op, the bank files a UCC-1 statement to secure its lien against the shares. At closing, the seller's attorney must file a UCC-3 statement to terminate that lien, a process which comes with a small fee.

Putting It All Together: A Tale of Two Sales

To illustrate the difference, let’s compare two hypothetical sales, both at a price of $1,500,000.

As you can see, the flip tax on the co-op sale adds a substantial amount to the total costs, often making co-op closing costs higher for sellers than those for a comparable condo.

Final Tips & Takeaways

• Get a Realistic Estimate: Work with a trusted broker and attorney early on to get a detailed closing cost estimate for your specific property. Knowing these numbers in advance is the best way to avoid surprises.

• The Biggest Cost Is Negotiable: While a 6% commission is standard, it is an area where you can potentially negotiate with your broker to save a significant amount.

• Don't Forget the Details: Beyond the major taxes and fees, budget for smaller costs like move-out fees, common charge/tax adjustments, and any repairs or concessions requested by the buyer.

• Condo vs. Co-op: Always remember that a condo sale is a transfer of real property, while a co-op is a transfer of shares in a corporation. This fundamental difference is why co-ops have the unique—and often costly—flip tax.

Ready to sell your NYC home? Don’t navigate the complex world of closing costs alone. The experienced team at Yeo Real Estate is here to help you understand your options, maximize your net proceeds, and achieve a seamless sale. Contact us today for a free, no-obligation consultation to discuss your property and learn how we can help you sell for the best possible price.