When purchasing a new home, it is important to have the right team working for you. The right realtor, the right loan officer, and the right attorney. Together they will work towards the common goal of making your home buying experience as smooth as possible.
Once you put your team together, the next step is to understand the costs involved with your purchase. The costs associated with buying a home will be dependent on multiple factors including:
For a breakdown of the costs, specific to your transaction, please contact us, but in the interim here is some general information that can help you start planning.
DOWNPAYMENT: When signing the contract, you should expect to write a check for 10% of the purchase price. This is pretty much the industry standard, but there are certain instances where you may only be required to put down 5%.
TRANSFER TAXES: In any transaction, there will be certain taxes that are paid by the purchaser and some paid by the seller. There are exceptions to every rule, but generally the taxes paid by purchaser are:
The taxes paid by the seller (generally) are:
MORTGAGE RECORDING TAX:
NYS Mortgage Recording Tax: Mortgage recording tax is based on the mortgage amount, not the purchase price like the transfer taxes defined above. Co-ops are considered personal property (as opposed to real property) and are NOT subject to mortgage recording tax. In most cases, the lender will be responsible for paying .25% of the listed amount.
Attorney fees : Most attorneys will charge a flat fee for a real estate transaction. Be careful of those that bill on hourly basis, as each phone call, each email, each question will quickly add up. Also it is recommended that you retain an attorney who specializes in real estate. Those who specialize in other areas or who are general practitioners may be able to make it through the deal, but if a problem arises you will be happy with your decision to hire a specialist.
Title charges/Recording fees : Title insurance ensures and insures that you lawfully own the property and that there will be no issues with the chain of title or any judgments that may negatively affect the property. The insurance premiums both for you and your lender (yes, you pay for the bank's insurance too) are fixed by New York State. Additional fees will include the various searches that will allow the insurance company to insure the transaction, as well as to record the necessary documents.
Lien Search : Co-ops are not considered real property. When purchasing a co-op, there is no title insurance. There is, however, a lien search which will identify any other interests filed against the stock and lease for the subject apartment.
Lender fees : These fees will vary from lender to lender, but should be between .05 and 2% of the loan amount. This does not include third party costs such as a home inspection, a survey (if necessary), the appraisal, the credit report, etc.
Homeowners insurance : Most lenders are going to require that you procure insurance prior to closing on the property. Even if your bank does not mandate insurance it is absolutely in your best interest to insure your home.
Property taxes : At closing, you should expect to pay as much as one year's worth of property taxes (city, village, school). It may come in the form of reimbursing the Seller for a pro-rated amount that he/she has already paid or it may need to be pre-paid depending on when it is due (lenders usually require any tax due within 60 days of closing be paid at closing) or deposited into an escrow account (if your lender will be escorwing for your taxes).
Transfer/Building fees : When moving into a condo or co-op, you should expect fees that must be paid at closing. These may include move-in fees, capital contribution, transfer agent fees (co-ops), and pre-payment of following month's common charges.
Katz & Katz, P.C.
30 Glenn St
White Plains, NY 10603
750 Third Avenue
New York, NY, 10017