Closing Costs on NYC Co-Op

[Richelle Bryan]

Hello BP,

What are all the expenses related to purchasing a co-op in New York City? I know there is a down payment of course, but about what percentage of price is closing costs? And are there other expenses such as a year prepaid of taxes? thank you in advance.

Richelle

[Jason Lee]

Closing costs for buyers of co-ops does not work out to a percentage of the sales price. Most of the fees are fixed. There's your attorney fee, Co-op and management company application and processing fees, Mortgage related fees (appraisal, bank attorney, lien search, recognition agreement, etc). The only fee that works out to a percentage would be mansion tax if the purchase price is over $1mm. The co-op pays the real estate taxes on the property itself (which you pay indirectly through the monthly maintenance), so there are no prepaid taxes. If you are purchasing a sponsor unit then there would be city and state transfer taxes that are typically payable by the purchase (the seller typically pays for re-sales), and those are a percentage of the purchase price. Most co-ops will require you have a certain amount of liquid assets post close as a multiple of the total monthly housing costs (typically 1-2 years worth at minimum), they often have a formula for housing debt-to-income and total debt to income. Keep in mind, many co-ops don't allow investors.