How Much Does It Cost To Sell A House In New York

The Short Answer

If you’re selling a home in New York, it’s going to cost you between 1% and 20% of the list price. Expect the final selling cost to be right around 10%. This website showed how a home that was listed at $323,797 cost $43,713, meaning in this specific instance, closing costs were 13.5%. That’s pretty high, but it won’t be the case for all properties.

New York is more than the sprawling, tightly-packed metropolis presided over by Lady Liberty. It’s a state with cities north of NYC, and rural areas in the country. So what is really meant by “New York”? Is it the state as a whole, metropolitan areas, or rural areas? Depending on your definition, average costs to sell a house in New York will differ.

Statistically, that which is going to be more expensive will involve sales toward metropolitan centers. There are a variety of reasons for this. Taxes are certainly a consideration. Also, realtors are going to generally have a higher commission because for them to sell a house requires they expend more resources. Accordingly, they must increase their commission fee.

In the country, sellers may not even go through a realtor. Their selling costs are likely going to be much lower. The lion’s share of expenses related to property sale come from three primary areas, which we’ll cover in this writing. Those areas are: taxation, realtor commissions, and the cost of repair or refurbishment of property prior sale.

Taxation

You’re going to be taxed for the sale of any property; however, you can mitigate this. A 1031 exchange allows you to turn money from the sale of one property directly into another; you can legally avoid some taxes this way.

Just to give a clear idea: expect taxation to be 1% of property value for anything $500k or under, and 1.425% for anything higher than $500k. In New York there’s additionally something called a “transfer tax”. There’s a .4% transfer tax on the price of purchase, and it jumps up to .65% if property value is higher than $3,000,000. You can read more about that here.

What this means is that you can actually save money by listing your property under what it’s value is, if you’re right on that $500k line. 1.425% of $501k is $7,139.25. Meanwhile, 1% of $499k is $4,990. So by “losing” $2k, you “save” $3k. See how that works?

Get consultation from attorneys, realtors, friends, and family to help you find the best possible listing price in terms of associated taxation. It’s also worth noting that in addition to direct taxation, there are attorney fees you might as well consider a “collateral” tax. These are going to be $1.5k to $4k. Expect a flat fee from many attorneys.

Another pro tip is to ensure a cost segregation study is conducted to help alleviate any potential tax burden you may incur come tax season. Always use a licensed professional to accomplish this task as it can become a complicated endeavor to separate personal property assets from real property assets.

Commissions

Realtors are going to take a commission that’s between 5% and 10%, depending on the realtor, and the size of your property. It’s actually possible to conserve some of that cost with a really big property owing to the associated size of the commission.

That is to say: a realtor has to be a poor businessman to pass on a commission because you won’t give them their normal rate, if that commission is higher than what they’d get on multiple smaller properties anyway.

So if you had a property worth ten million dollars, and the realtor insisted on a 6% fee, you might be able to get that down to 3% and still keep your realtor—they’ll make more on the big property even at a reduced percentage than they would on several smaller ones; so you’ve got some negotiation ability.

For most, though, you can expect realtor fees to be between 5% and 10% in New York. Of course, through sites like ISoldMyHouse.com, you can totally sidestep realtor commissions.

Repair Expenses

Repairs and refurbishment can be more or less than realtor fees or taxes, depending on the extent of repairs or remodeling involved. This will differ per property; but you can expect it to be somewhere between 1% and 5% of total property value, generally.

Maximizing Property ProfitConsider expenses of repair, taxation, and realtor commissions as you look into selling your New York property. The way you sell, and your location, can determine what it costs you to sell your property. If you do it all yourself and avoid realtors, then effect a 1031 exchange, you can conserve the lion’s share of closing costs. But there will always be some.

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