I’ve put together all the must-knows, essential information and common pitfalls when it comes to buying real estate in New York.
Thanks to its financial opportunities, tourism and educational prowess, New York has always been one of the biggest real estate markets in the world.
Therefore, it is expected that we see a healthy mix of local and international buyers in New York City.
For the latest New York City Market Report, please feel free to check out Streeteasy’s latest reports.
Home buyer Costs
in general, buyers of different types of properties are subjected to different fees, but here is the estimate…
- All cash – 1% of Total Sales Price
- Mortgage – Additional 2% of Total Mortgage Amount
- If above $1M – Additional mansion tax (breakdown below)
- If New Development – Additional 1.825% + seller’s attorney’s fee
For more specific breakdown…
- Title Insurance – 0.4% of Total Sales Price
- Mansion tax
- 1.00% for $1,000,000 to $1,999,999
- 1.25% for $2,000,000 to $2,999,999
- 1.50% for $3,000,000 to $4,999,999
- 2.25% for $5,000,000 to $9,999,999
- 3.25% for $10,000,000 to $14,999,999
- 3.50% for $15,000,000 to $19,999,999
- 3.75% for $20,000,000 to $24,999,999
- 3.90% for $25,000,000 or more
- Mortgage Tax – 1.9% of Total Mortgage Amount
- Title Insurance is foreign to most international buyers. It is a retrospective insurance that protects buyers from any title disputes prior to his/her ownership.
In other words, the coverage is effective up to the day of closing and insurance will protect the buyer from any outside claim of ownership on the property.
In real life scenario, if “the buyer” bought from “the seller” on 1/1/2020 and someone claimed that he/she was the real owner and “the buyer” was deceived by “the seller”, the title insurance would kick in and protect “the buyer” from any loss.
- Mansion Tax was reworked in 2019 and the taxes have drastically increased to offset the high-ticketed items. As opposed to a flat 1% on all properties over $1M, NYC now imposes a stepped tax bracket on real estate transactions.
- Application fees are a part of the condominium/cooperatives purchases. Buyers are mandated according to the building rules to pay a certain amount of paperwork fee and background check fee prior to closing.
- International buyers should consider purchasing through LLC to protect the buyer’s information as well as receiving some tax benefits.