From Buffalo to Yonkers, These are the Closing Costs New York Sellers Have to Pay

The sales price of your home may appear to offer a good profit margin, but before you start putting those expensive items from your wishlist into your shopping cart, first you must subtract all the closing costs New York homeowners have to pay.

Sorry, New York sellers, but you are responsible for quite a few closing costs. On average, New Yorkers deduct 8% to 10% of the final sales price to cover closing costs. New York has one of the highest fees per sales price in the country. Sellers in Missouri, Colorado, Wyoming, and Montana often pay less than 1% of the sales price in closing costs. Even California sellers typically pay just slightly over 1%.

To prepare you for what fees you’re obligated to cover, we did the research and spoke to a top New York agent about what to expect to pay for at closing.

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New York sellers cover these closing costs

Closing costs are the fees paid to finalize the real estate transaction. Some of them are negotiable, but certain charges are mandatory, such as taxes and fees for home sales in New York City. There can be additional costs depending on the type of property sold. It’s a good idea to check with your real estate agent, but be prepared because New York sellers are almost always responsible for these.

Mortgage payoff

No matter what state you live in, if you sell your house before paying off the mortgage, you’ll have to pay it off at closing. You’re also responsible for paying off any home equity loans you may have taken out against your mortgage.

According to the most recent numbers, the National Association of Realtors (NAR) reports that the median homeownership tenure in 2024 is 15 years. While much of New York state is in line with this number, the average length of home ownership in New York City is 9.8 years, while it is longer in select cities, like Buffalo, where the average is 16 years.

Considering that most mortgages last 30 years, but the average tenancy is around 15, that leaves most sellers with a substantial amount to pay off at closing.

Property taxes

Property taxes can fluctuate with location and home value. To determine your home’s property taxes, New York state calculates by multiplying the taxable value with the tax rate by first estimating the property’s value, and then multiplying that by the level of assessment. 

How much you must pay in property tax at closing depends in part on when you sell your home and in part on where you live. Most parts of New York collect property taxes in arrears or concurrently, like New York City.

That is, New York City’s fiscal year begins in July, with property taxes due quarterly, on July 1, October 1, January 1, and April 1.

But don’t worry: the amount you owe at closing is prorated on a daily basis, according to Tiffany Hilbert, a top Rochester agent who works with over 69% more single-family homes than the average Rochester agent. So you’ll only pay for the days you actually lived in the home. “They break it down at a very granular level.”

Hilbert says taxes in New York State are higher than average compared to the rest of the country, but there’s some relief available with the potential to deduct up to $10,000 of your property taxes — as per the Internal Revenue Service — if you qualify. As a seller, it’s always important to consult with a tax professional to see what deductions and potential exemptions might be available to you. The following are a few examples that may be available to New Yorkers.

1. Senior Citizens Homeowners’ Exemption
   Local governments and school districts in New York State can grant a reduction on the amount of property taxes paid by qualifying senior citizens by reducing the taxable assessment of the senior’s home by up to 50% under the “sliding scale option” based on income limitations.
2. Star exemption
   The STAR exemption is a sort of credit for school tax relief. Hilbert calls it a tax rebate and explains that homeowners must apply for it by March every year. She also notes that the “true taxes” of a property must be shown on the listing, prior to this potential exemption.
3. Miscellaneous exemptions
   There are exemptions for veterans, people with disabilities, agricultural properties, and more. The buyer’s lender will usually calculate who owes what at closing, saving sellers from a math headache.

Loan reconveyance fee

To prove you’ve paid off the mortgage balance, you’ll receive a deed of reconveyance, which must be recorded in the county in which the property is located. Although the title insurance company will often take care of recording this deed of reconveyance, the seller pays the applicable fee.

The fees involved are calculated to cover the charges for recording the mortgage and deed. While these costs vary, they’re typically between $50 and $65. You can always check with your real estate agent or the local office that handles deed transfers to find out how much their administrative fees are.

Reconveyance recording fee

The county recorder files the deed of reconveyance in the county’s records. Conveyance recording fees in New York State is $42 for the cover page and one document page, but there may be additional fees that can be imposed by certain counties. In general, the buyer pays to record the deed and mortgage.

Real estate transfer tax

Real estate transfer taxes are a one-time fee imposed as a percentage of the property value. They generate revenue for the state, county, or city. 

Also known as a deed transfer tax, stamp tax, conveyance tax, or a documentary transfer tax, they are one of the priciest and least popular of all taxes associated with home sales. “It is not negotiable,” Hilbert emphasizes.

New York State levies a real estate transfer tax on conveyances of real property at a rate of two dollars for each $500. So, for example, using the median sale price of $490,000  for a home in New York, the state transfer tax would amount to $1,960. There are exceptions for transferring property into a trust, divorce, and inheritance.

Adding insult to injury, the Internal Revenue Service does not allow deductions of transfer taxes for the sale of a personal home.

Local real estate transfer tax

In addition to state transfer taxes, some areas impose additional taxes. For example, since 2019, conveyances in New York City have been subject to an additional tax of $1.25 for each $500 or fraction thereof when the entire conveyance of residential property is worth $3 million or more. An additional 1% tax is also imposed on the sale price (mansion tax) for residences where consideration is $1 million or more.

As Hilbert says, “New York City is a completely different animal.” Residential properties that sell for less than $500,000 receive a 1% tax rate, while homes that sell for more than $500,000 pay a rate of 1.425% to the city. That means, for example, a home at the median residential sales price of $720,000 in New York City would be taxed $10,260.

Real estate agent commission

The average real estate agent commission in New York is 6%, just slightly more than the national average of 5.8%. This number includes both the fee for the buyer’s and the seller’s agents. A seller in New York would be expected to pay for the listing agent’s commission of around 3%, but during negotiations or to serve as additional marketing for the property, the seller may choose to cover the buyer’s agent’s commission as well. That means that for the sale of a $720,000 home in New York, the seller could pay anywhere around $21,600 to $43,200.

Since there is no commission rate set by the State of New York, a seller can negotiate the fee with the agent. To find commission information specific to your area, enter your city into HomeLight’s commission calculator.

Escrow fee

Escrow is the period between accepting an offer and closing when the buyer’s earnest money enters into an escrow account held by an impartial, third-party escrow company until the deal is done. Escrow officially ends at closing when all funds have been disbursed and all documents have been completed.

The seller and buyer usually split escrow fees. The national average escrow fee is about 1%.

Title search

A title search ensures that the property has no liens, judgments, or other claims from outside parties (or “encumbrances”) on it that would prohibit a sale. Most states require a title search to legally purchase a property.

Title companies typically charge between $150 and $500 to conduct a title search. Most lenders require them. Since the mortgage lender requires it, in many states, the buyer pays. In New York State, however, Hilbert says sellers typically pay for this abstract of title search.

Attorney fees

New York Judiciary Law § 484 requires a licensed attorney to prepare the contract and to represent you at closing. 

In addition to preparing the sale contract, an attorney will review the title, create the documents necessary for closing, and provide a good faith estimate of fees owed. Some attorneys offer a fixed rate, while others charge by the hour. In New York, the typical range is $2,000 to $3,000.

Both buyer and seller will pay for their respective attorneys. Hilbert says three attorneys will attend closing: the buyer’s, the seller’s, and the bank’s. She views real estate attorneys as a “safety net,” alleviating real estate agents of closing duties and responsibilities.