06/14/2026
Who pays closing costs-Buyer or Seller?
In New York, both the buyer and the seller pay closing costs, but they are responsible for entirely different sets of fees and taxes.
Generally speaking, sellers pay a larger chunk of the total purchase price (often 8% to 10%, primarily driven by real estate agent commissions and transfer taxes). Buyers typically pay between 2% and 6%, largely driven by mortgage-related expenses and title insurance.
New York stands out for having some of the highest closing costs in the nation. Here is exactly how the expenses break down by who pays what:
đ What the Buyer Pays
As a buyer, your costs heavily depend on whether you are financing the home or paying cash, as well as the price and type of the property (condo, co-op, or townhouse/house).
Mortgage Recording Tax: If you finance your purchase, NY State and local municipalities levy a tax on the mortgage. In NYC, this is roughly 1.8% for loans under $500,000 and 1.925% for loans over $500,000 (cash buyers completely skip this).
The "Mansion Tax": If your purchase price is $1 million or more, you must pay a state/city tax that starts at 1% and scales up progressively depending on how high the price goes.
Title Insurance: Buyers pay for title search fees and an ownerâs title insurance policy to protect against future ownership disputes. If you have a mortgage, you will also pay for the lender's title policy.
Lender Fees: This includes loan origination, bank attorney fees, application fees, credit checks, and the home appraisal.
Buyerâs Real Estate Attorney: New York uniquely requires (or highly encourages) real estate transactions to be handled by attorneys. Expect to pay between $2,000 and $5,000 for your own legal representation.
đĄ What the Seller Pays
Sellers generally have their expenses deducted directly from their gross profits at the closing table.
Real Estate Agent Commissions: Traditionally, the seller covers the agent fees (typically 5% to 6% of the sale price), though this has become highly negotiable following recent industry settlement changes.
NYS Transfer Tax: A state tax for passing the property deed over to the buyer. It is 0.4% for sales under $3 million and jumps to 0.65% for sales $3 million and up.
NYC / Local Transfer Tax: If the home is in NYC, sellers pay an additional Real Property Transfer Tax (RPTT). This is 1% for properties under $500,000 and 1.425% for properties above $500,000. Other municipalities (like Yonkers or Mt. Vernon) have their own local transfer taxes.
Sellerâs Real Estate Attorney: Just like the buyer, the seller pays for their own attorney to draft the contract, clear title issues, and handle closing tasks.
Existing Mortgage Payoff: The remaining balance on the seller's home loan, plus any recording fees to officially clear the old lien.
â ī¸ The Big "New Construction" Exception
If you are buying a brand-new construction condo or townhouse, the baseline rules change significantly.
In New York, it is local custom for the sponsor/developer to pass their closing costs onto the buyer. This means if you buy a new development, youâthe buyerâwill likely be expected to pay the NYC/NYS Transfer Taxes and even the sellerâs attorney fees, which can quickly inflate a buyer's closing costs to 5% or more of the purchase price.
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