Selling your New York City apartment is your top priority, and you want to get the most financial reward from your investment. But real estate values in The Big Apple fluctuate, meaning your apartment may be worth more or less than when you purchased the unit.
When selling, you’ll also find yourself responsible for a slew of closing costs, which could cut into your bottom dollar. By anticipating your closing costs, you can better estimate your financial returns.
Good news: you don’t need to tread the treacherous waters of real estate alone. In fact, you shouldn’t. To ease your experience in finding the right buyer at the right price with the right terms, you’ll want to work with a qualified real estate agent who can guide you through the process, help you price your apartment for sale, and guide you through the process of selling your cooperative or condominium apartment.
The real estate agent you select to work with should have expertise in your type of apartment as well as its location. Choose a New York real estate agent with whom you feel relaxed and comfortable, who is happy to answer your questions thoroughly, and can help you understand and prepare for your closing costs when you’re ready to sell your New York apartment.
- What Does “Closing Costs” Mean for Sellers in New York?
- What Separates Real Estate from Real Property in New York?
- What’s the Difference Between a New York Apartment, Co-Op, and Condo
- What’s Covered in New York Closing Costs When Selling an Apartment?
- Have Questions? Ask Interactive Realty Solutions
What Does “Closing Costs” Mean for Sellers in New York?
When you set out to sell your New York City condominium or cooperative apartment, you’ll accumulate a set of fees, taxes, and expenses for services provided throughout your transaction.
Once you’ve accepted an offer on your apartment, have signed a contract, and your sales transaction is underway, the period between signing the contract and turning over the keys is called in contract.
During the closing process, your apartment may undergo inspections, appraisals, and surveys. In many cases, the buyer pays for these services. However, you may have to negotiate and share some of those costs. You may also be required to make repairs and minor upgrades before the deal is done, which is a separate expense from your closing costs.
Closing costs for sellers in New York City add up in the thousands. The City is second only to Washington D.C. for the highest closing costs in the country.
Although buyers of apartments in The Big Apple also have closing costs to pay, sellers can expect to pay more since they are solely responsible for brokerage commissions and transfer taxes.
When you close on the sale of your apartment, or when you go to “the closing table,” you’ll receive your check for proceeds of sale, minus the closing costs.
Your costs will vary based on several factors, including whether the apartment you’re selling is a condominium or cooperative apartment— but as a seller, you can expect to pay between 8% and 10% of the sales price of your apartment.
Some closing costs may be negotiated with the buyer, especially in a seller’s market where sellers outnumber buyers.
What Separates Real Estate from Real Property in New York?
In New York, real estate includes the purchase of land and any buildings, structures, or natural resources connected to that land.
Real property does not include the purchase of land, but rather a unit in a building with multiple units such as condominiums and cooperative apartments.
When you’re selling a New York apartment, you’re selling real property, not real estate although you’ll still work with an expert real estate agent to stage, price, and list your apartment for sale to attract the highest bidder.
What’s the Difference Between a New York Apartment, Co-Op, and Condo
The word apartment in New York is a general term that encompasses both condominiums and co-ops.
Condos and co-ops are both considered real property. One comes with a title and ownership whereas, with the other, you’re essentially an investor buying shares in a corporately owned building.
Closing costs on the sale of your apartment will be variable, but the best place to start to gauge your expenses is to identify whether the apartment you’re selling is a condo or a co-op.
Co-ops are more available than condominiums because they account for 75% of residential properties in New York. Also, co-ops, most of which were built before the 1980s, tend to be dated with older appliances and features. For these reasons, co-ops receive less competition and smaller offers. Lower sales prices amount to lower closing costs.
Condos, on the other hand, are newer, fewer, and farther between. Condos may generate a bidding war that brings higher offers and more profit, therefore higher taxes and fees.
Another differentiating factor between New York’s condos and co-ops is that the sale on a condo comes with a title and ownership of the unit as well as access to common areas and amenities; a co-op is a purchase of shares in a corporate building with common areas, facilities, and a lease to occupy the unit.
Selling a condo with a deed versus selling shares with lease warrants different closing costs.
What’s Covered in New York Closing Costs When Selling an Apartment?
Based on the type of real property you’re selling, your closing costs are not limited to but may include:
- Administrative Fees
- Attorney Fees
- Broker Commissions
- Miscellaneous Condo Fees
- Miscellaneous Co-op Fees
- Move Out Fees
- New York State Equalization Fee
- Pick Up or Pay Off Fee
- Processing Fees
- Flip Tax
- NewYork City Transfer Tax
- New York State Transfer Tax
- Stock Transfer Tax
- UCC-3 Filing Fee
The building your apartment occupies may also charge a percentage of the sales price of your unit, which should be clearly outlined in your building’s lease or the bylaws established by the Board of Directors.
Your taxes may not all be deductible. Talk with your real estate agent and accountant for what may or may not be deducted from your tax return.
$500,000 is the threshold for taxes in New York. Apartments that sell for less than $500,000 pay lower fees whereas condos and co-ops that bring in $500,000 or more find themselves in a higher tax bracket.
Whether you’re making a lateral move, upsizing, or downsizing, your move is exciting but also stressful. You want to get the most return on your investment when selling your apartment in New York. But there’s a catch 22 because you want to sell for the highest price, but the higher the sales price, the more expensive the closing costs.
New York real estate and real properties are expensive. Buying and selling apartments in New York can be a chaotic and confusing experience. As the seller, you’ll be responsible for a slew of hefty fees that come right out of your pocket at closing. If you’re not prepared to subtract that balance from your profit, you could be in a pickle.
Work closely with your trusted real estate agent, ask questions, and be open to receiving the expert advice your agent provides. Your agent can help you understand closing costs, price your apartment accordingly, and find the right buyer while simplifying the sales process.
Have Questions? Ask Interactive Realty Solutions
Interactive Realty Solutions is the best source of information about the local community and real estate topics. Give them a call today at (917) 341-2797 to learn more about local areas, discuss selling a house, or tour available homes for sale.