Generally, the buyer will pay closing costs of approximately 3.5% of the purchase price if he or she is paying cash for the property. If the buyer obtains a mortgage, then the total closing costs will rise to approximately 5.5%. Closing costs include recording taxes, attorney’s fees, managing agent fees, title insurance, bank fees, miscellaneous fees and mortgage taxes. In addition, in New York, if the purchase price of the property is over $1,000,000, then there is an additional mansion tax charged by the state of 1% of the purchase price. Also, in a new construction purchase, the buyer will pay costs normally paid by the seller, such as the state and city transfer taxes.
The largest part of the closing costs for a seller is the sales commission, which is typically 6% of the sale price (which is split evenly between the listing agent and buyer agent). In addition, the seller will incur other closing costs including attorney’s fees, recording fees for the release of a mortgage on his or her home, various insurances, and state and local transfer taxes.