Buyer Beware: 5 Things Every Home Buyer Should Know

1. Always get a home inspection. Most Contracts of Sale provide for the house to be sold "as is." A home inspection costs about $450 and will reveal structural defects and needed major repairs.

2. Know the neighborhood. It is advisable to visit the neighborhood at different times of day and talk to realtors and neighbors. The more you know about the neighborhood, schools, traffic and nuisances, the better.

3. Make sure you can afford to buy. Consider whether you can afford the monthly mortgage payment, real estate taxes, homeowner's insurance premium, private mortgage insurance premium, and carrying charges, such as energy bills, telephone bills, etc.

4. Closing delays can cost you money. Do not lock-in your interest rate too early. If the closing is delayed and your rate lock expires, you will have to pay additional fees to get a rate lock extension.

5. Estimate your closing costs. Buyer's closing costs include lender fees, appraisal fees, title insurance fees, survey fee, homeowner's insurance and real estate attorney fee. In order to prevent coming up short at closing, take into account that on average, buyer's closing costs* amount to about 3-5% of the purchase price.

*For more information on closing costs, see AOL Real Estate article Closing Costs: How Much to Budget.

To speak with an experienced real estate attorney about a closing, call us at (516) 314-8433. To learn more about our real estate closing services visit us at: https://www.jreardonlaw.com/residential-real-estate-closings

Purchaser's Closing Costs

Purchasing a home involves more out-of-pocket expense than just the down payment. There are also closing costs to pay for items such as title policies, recording fees, inspections and fees that a lender charges for obtaining a mortgage. The following schedule is an estimate of the closing costs that a buyer can typically expect to pay at closing.

PURCHASER’S REAL ESTATE CLOSING COSTS:

Taxes: (if applicable)

Mansion Tax 1% of purchase price when $1,000,000 or over

Mortgage Recording Tax (NYC)

• Sales under $500,000 1.8% of entire mortgage

• Sales $500,000 and over 1.925% of entire mortgage

Note: Click here to view table of mortgage recording tax amounts by county. Mortgage recording tax does not apply for cooperative apartment purchases.

Mortgage Associated Fees:

Origination Costs – points varies, usually 0 - 3% value of loan

Appraisal $350 (approx)

Underwriting $450 (approx)

Processing $450 (approx)

Application $350 (approx)

Bank Attorney $850 + up

Real Estate Tax Escrow 2-6 months

Short Term Interest varies, depends on the day of the month in which the closing

occurs

Title Insurance Fees:

Owner and Lender Title Policies 5% - 7% of purchase price (approx)

Municipal Searches $450 (approx)

Deed Recording $375-950 (approx based on county)

Real Estate Taxes varies

Note: Purchasers of cooperative apartments usually do not purchase title insurance, and instead pay for a lien search which is approximately $450. However, see our blog entry, Co-op Buyers Should-Consider Purchasing Title Insurance, which explains particular situations in which it is advisable for purchasers of cooperative apartments to purchase a type of title insurance policy called an Eagle 9 policy.

Homeowner’s Insurance:

Policy varies depending on lender's required coverage and purchase price

Home Inspection:

Home and Termite Inspection $450 (approx)

Legal Fees:

Purchaser's Attorney fee varies, but usually flat-fee basis (consult with your

attorney)

To speak with an experienced real estate attorney about a closing, call us at (516) 314-8433. To learn more about our real estate closing services visit us at: https://www.jreardonlaw.com/residential-real-estate-closings

Seller's Closing Costs

The following schedule shows estimated closing costs when selling real estate. These costs are just estimates and should be reviewed with your attorney.

SELLER’S REAL ESTATE CLOSING COSTS:

Transfer Taxes:

NYS Real Property Transfer Tax 0.4% (.004) of purchase price

NYC Real Property Transfer Tax

(Usually paid by Seller, except on new contruction sale)

• Sales under $500,000 1% of purchase price

• Sales $500,000 and over 1.425% of purchase price

Non-Resident Gains Tax Withholding

(out of state seller) 8.82% of gain

Non-US Resident (FIRPTA) 10% / 15% of price withheld or paid

Mortgage Payoff Fees: (if applicable)

Pick-up/payoff fee $150-$250 each

Recording Satisfaction $100-$300 each

Real Estate Broker Fee:

Commission 6% of purchase price (negotiable)

Legal Fees:

Seller's Attorney fee varies, but usually flat-fee basis (consult with your

attorney)

To speak with an experienced real estate attorney about a closing, call us at (516) 314-8433. To learn more about our real estate closing services visit us at: https://www.jreardonlaw.com/residential-real-estate-closings