Everything You Need To Know About Closing

You’re almost to the finish line! You’ve found your dream home, the financing is lined up, the contract is all good—you can see the closing at the end of the tunnel. Closing is the meeting where everyone comes together—buyer, seller, lender, their respective attorneys, and real estate agents—and the actual money and proof of ownership or use change hands.For condos, the deed is exchanged. For co-ops, the proprietary lease is exchanged. Let’s explore the who/what/where/when/how of closing meetings!

Who Attends the Closing?

Definitely Attending

  • Buyer & Buyer’s Attorney
  • Seller & Seller’s Attorney
 

Possibly Attending

  • Real estate agents representing the buyer and seller
  • Someone from the title company
  • An attorney representing the lender

Note: The buyer generally has to appear in person at closing to sign a ton of documents. The seller may appear in person to sign documents or arrange to do it ahead of time and have their attorney represent them at closing.

What Goes Down At the Meeting?

A whole lot of signatures! The buyer’s attorney will review each final loan and sale document and explain any changes to the terms. If there are any issues with the changes—now is the time to sort them out. This is the buyer’s final opportunity to review the documents and make sure that they understand what they’re committing to. Document by document the buyer’s attorney will give their client the go-ahead to sign.

What should you bring to be prepared?

This will vary depending on your role as either buyer or seller and which type of loan you’re utilizing. Your attorney, loan officer, and the title company representative will give you detailed instructions on what to bring.

Definitely plan on bringing government-issued ID. Think: driver’s license, state ID, and/or passport.

Buyers should be prepared to part with some cash. You will need to pay the title or closing company for the down payment & closing costs. They will give you directions on this, but you will most likely need either a certified check or to set up a wire transfer. Your lender must provide you with a ‘Good Faith Estimate’ three days after they receive your loan application. This estimate details their related fees and expenses that will be part of your closing costs. If the lender’s estimate is way off base (i.e. they really low-balled the estimate)—they have to pay the difference.

Sellers should be prepared to part with the unit’s keys or key codes. Sellers may also need to bring a certified check or set up a wire transfer for any closing costs due to the title or closing company that are not taken directly from the sale money. Sellers will know this in advance and can plan accordingly.

How Much Money Are We Talking Here?

  • Attorney’s fees: varies, talk to your attorney.
  • Bank fees: $350-$750
  • Bank attorney fees: $650-$750
  • Application fee: $350
  • Processing fee: $330
  • Appraisal fee: $300-$1,500 depending on sale price
  • Credit report: $10+
  • Mansion Tax (if applicable): 1% of sale price if sale price is $1,000,000 or more.
  • Lien search: $250-$350
  • UCC-1 Filing: $100
  • Miscellaneous co-op charges: vary by building
  • Recognition agreement: $200+
  • Maintenance adjustment: pro-rated for the month of closing
  • Short term interest: equal to interest for balance of month in which you close
  • Tax escrows: 2-6 months
  • Recording fees: $250-$750
  • Title insurance: Varies, talk to your attorney (approx. $450 per $100,000).
  • Mortgage title insurance: Varies, talk to your attorney (approx. $200 per $100,000).
  • Municipal Search: $350-$500
  • NYC Mortgage Tax (paid by borrower):
    • Mortgage less than $500,000: 1.8% of mortgage
    • Mortgage more than $500,000 for a 1-3 family residential dwelling: 1.925% of mortgage
    • Mortgage on all other property over $500,000: 2.80% of mortgage
  • Common charge adjustment: pro-rated for month of closing
  • Real estate tax adjustment: pro-rated depending on when the tax is collected.
  • Short term interest: Varies by building.
  • Miscellaneous condo charges: equal to interest for balance of month in which you close
  • *For buyers purchasing units in new developments (although this can sometimes be negotiated with the developer)
    • NYC transfer tax:
      • Properties under $500,000: 1%
      • Properties over $500,000: 1.425%
    • NY State transfer tax (as of fiscal year 2020):
      • Properties under $3,000,000: 0.4%
      • Properties over $3,000,000: 0.65%
  • Tax escrows: 2-6 months
  • Recording fees: $250-$750
  • Title insurance: Varies, talk to your attorney (approx. $450 per $100,000).
  • Mortgage title insurance: Varies, talk to your attorney.
  • Municipal search: $350-$500
  • Mortgage tax:
    • Mortgage less than $500,000: 1.8% of mortgage
    • Mortgage more than $500,000 for a 1-3 family residential dwelling: 1.925% of mortgage