By Priscilla Toomey, Julie B. Fee Sotheby's International Realty

Nov. 18, 2020: While price and terms are the bedrock of a home sale or purchase, it is also important to anticipate your closing costs and other steps you will need to take.

If you are selling, in addition to the broker's commission, you will need to:

*Pay off your mortgage and any lines of credit associated with your home, such as a Home Equity Line of Credit, at the closing, together with a recording fee

*Pay the New York State Transfer Tax of $4 per $1,000 of the selling price.

*Pay the local transfer tax, if any. For Yonkers, it's 1.5% of the sales price. For Mt. Vernon, it's 1% of the sales price.

*Pay your lawyer's fee (which may range up to $2,800)

*Pay the Title Company's Closer Fee (usually $150-225 per loan)

*Pay the Property Condition Disclosure Credit of $500 unless you sign the Disclosure Statement, which most lawyers in the area tell their clients not to do but instead have the buyer rely on their inspection.

*Any property taxes which have become due, which will be pro-rated with the buyer at closing.

*The local transfer taxes do not apply to coops; however, coops often have a "flip tax," typically paid by the seller, instead.

There may be other, smaller fees, but the ones above are the major ones.

In addition, before putting your home on the market, make sure you have a Certificate of Occupancy or equivalent and that all permits that may have been taken out for work performed have been documented as being closed out.

Close to the closing date, be sure to get final readings and bills from all your utility providers, that the Post Office has your new address for forwarding, that you have updated your homeowner's insurance provider, and that you leave your home "broom clean. 

If you are buying, you will typically need to put down 10% when you sign the contract, to be held in escrow by the sellers' attorney, and applied to the purchase money at closing. You will also need to pay for the home inspection (usually $600-1,750 depending on the size of the home and other factors) and termite and radon tests if you have them. You may need to get or update a survey and will also need to pay your lender for the appraisal.

At closing, buyers typically pay:

*Their attorney's fee as well as the lender's attorney's fee.

*Title Insurance

*Any municipal searches and endorsements

*Any points on the mortgage

*Bank fees such as credit reports, processing fees, and commitment fees

*Mortgage tax (1.05% of the mortgage amount)

*Mansion Tax of 1% of the total price if $1,000,000 or more

*Homeowner's Insurance

*Any pro-rated taxes, interest, or other fees, depending on the closing date.

Since the major portion of these costs are related to your mortgage, you should get more precise amounts from your lender early in and during the transaction. Property taxes will be adjusted and pro-rated to the closing date, though the buyer may need to pay the lender up to one year's property taxes at closing, be held in escrow, and be applied by the lender with each mortgage payment. Coop maintenance and condo common charges may also be pro-rated at closing, together with charges for oil if that is the fuel the building uses.

So, for sellers, make sure you keep a reserve for closing expenses and make sure you have a current Certificate of Occupancy, and that permits have been closed out.

Buyers should also keep a reserve and stay in regular communication with their lender since the bulk of their fees are mortgage-related, and it's your lender who is in the best position to keep you apprised of what those are. And be sure to savor this important transition to your new life.

Pictured: Priscilla Toomey

Photo courtesy Julia B Fee Sotheby's International Realty

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