Closing costs can really add up. Their total can prove to be an unwelcome surprise at the closing table or only days before settlement.
In New York, the extra costs of buying a condo, as opposed to co-op, are substantial. That’s because a co-op is only the purchase of shares of stock in an apartment building, while condo buyers purchase actual real estate and receive a deed.
Condo purchasers must fork over recording fees and title insurance, among other expenses. For their part, sellers of both condos (generally with the exception of new developments) and co-ops need to come up with hefty transfer taxes payable to the city and state.
It is a grim undertaking to calculate the fees, but foolhardy is the buyer or seller who doesn’t take into account the thousands of dollars that closing costs invariably total.
One good source of basic information is the U.S. Department of Housing and Urban Development. Other sources are brokerage and individual broker sites, including mine, and other online information such as this one I found searching the Internet.
If you don’t fully appreciate what a “no closing cost” offer means, rest assured that it’s not much, an observation made by George Souto, a Connecticut loan officer, in a blog post; ace Maryland and Virginia broker Lenn Hartley amplified the notion in a post of her own.
As with all things real estate, the buyer needs to be beware.
Tomorrow: To more boards, the price may not be right
To take your own bite out of the Big Apple, start your home search here.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022