Closing Costs — Who Pays What?
Connecticut custom calls for buyers and sellers of real estate to pay the closing costs that relate to the portion of the transaction for which they are responsible. The parties may negotiate an alternative agreement, however, in the absence of an agreement, costs are generally split as outlined below. For comparison purposes, we have also included the costs of buying/selling in New York City.
Costs Typically Incurred by the Buyer
Home Inspection Fees
An offer to purchase a home is typically presented with certain contingencies, one of which is a building inspection. Inspection fees vary considerably; in our experience, a quality inspection by an experienced professional is well worth the cost. Depending on the age, construction and features of the home, additional testing may be warranted.
General Building Inspection ~ $1000
Extras: Pool ~ $250, Asbestos ~ $350, Radon ~ $100, Septic ~ $450, Termite/Pest ~ $250
Borrowing Fees
To purchase a home, buyers generally finance the cost by obtaining a mortgage. In addition to the down-payment required, the buyer will need funds to cover the first year of their homeowner’s insurance, any lender required escrow for home owner’s insurance and real estate tax payments, the interest from closing date to the their first mortgage payment and borrowing fees, which are outlined below.
CT Borrowing Fees:
Underwriting ~ $995
Title/Credit Search ~ $300-$400
Appraisal ~ $400-$600
Origination Based on loan type/amount
Bank Attorney Typically N/A
Title Insurance, Lender & Owner ~.35% of purchase price
Attorney's Fees ~ $1,500-$3,000
Recording Fees ~ $400
NYC Borrowing Fees:
Underwriting ~ $995
Title/Credit Search ~ $400-$500
Appraisal ~ $500-$700
Origination Based on loan type/amount
Bank Attorney ~ $1,000
Title Insurance, Lender & Owner~.5% of pp
Attorney’s Fees ~ $2,500-$4,000
Recording Fees ~ $500
When purchasing in New York City, buyers should also expect to pay a Mortgage Tax and possibly a NY Mansion Tax, if the purchase price exceeds $1 million.
New York’s Mortgage Tax:
2.05% of amounts borrowed under $500k (1.05% State; 1.0% City)
2.175% of amounts borrowed for condominiums over $500k (1.05% State; 1.125% City)
2.8% of amounts borrowed for over $500k (1.05% State; 1.75% City)
Lenders typically pay the first .25%, reducing borrowers cost to 1.8 -2.55%.
New York Mansion Tax:
1% of purchase price (sales ranging $1M - $2M)
1.25% of purchase price (sales ranging $2M - $3M)
1.5% of purchase price (sales ranging $3M - $5M)
2.25 – 3.9% of purchase price (for sales over $5M)
Costs Typically Incurred by the Seller
Any seller unpaid (and accrued) real estate taxes and the balance of any existing seller mortgage(s) on the property are paid off and are deducted from proceeds the seller receives at closing. In addition, the seller is typically responsible for the following costs:
CT Conveyance Tax
.75% of sale price up to $800k
1.25% of sale price between $800k and $2.5M
2.25 % of sale price over $2.5M
Local Conveyance Tax
All Fairfield County — .25%
Except for:
Stamford - .35% up to $1M; .50% over
Bridgeport, Norwalk - .50%
Realtor’s Fee ~ 5-6%
Attorney’s Fee — $1,000-$3,000
Recording Fees ~$200
NY Transfer Tax
.4% of total sale price (for sales up to $3M)
.65% of total sale price (for sales over $3M
NY City Transfer Tax
1% of transactions under $500k (1.425% Multi-unit Buildings)
1.425% of transactions over $500k (2.625% Multi-unit Buildings)
Realtor’s Fee ~ 5-6%
Attorney’s Fee — $1,500 - $4,000
Recording Fees ~$200
The fees listed above are given only as an approximate and may vary higher or lower. Please feel free to give us a call if you have any questions.