The True Cost of Buying and Selling a Co-op
The purchase price is just the beginning. Whether you're buying or selling a Manhattan co-op, transaction costs add tens of thousands of dollars to the equation—sometimes over $100,000 on higher-priced apartments.
Understanding these costs in advance allows realistic budgeting, informed negotiation, and fewer surprises at the closing table. Buyers need to know their true all-in cost; sellers need to calculate accurate net proceeds.
Buyer Closing Costs
Co-op buyers face several categories of closing costs. On a typical Manhattan purchase, expect total buyer costs of 1-3% of the purchase price—significantly less than condo purchases, which include additional title insurance and recording costs.
Attorney Fees
You need a New York real estate attorney to represent your interests, review the contract, examine building financials, negotiate terms, and guide you through closing.
Typical cost: $2,500-4,000 for a standard transaction.
Mortgage-Related Costs (If Financing)
- Application fee: $0-500
- Credit report fee: $30-50
- Appraisal fee: $500-1,000
- Bank attorney fee: $500-1,000
- UCC-1 filing fee: $75-150
- Origination/points: 0-2% of loan amount (optional)
Mansion Tax (Purchases $1 Million+)
New York State imposes a graduated transfer tax on residential purchases of $1 million or more, paid by the buyer:
| Purchase Price | Mansion Tax Rate |
|---|---|
| $1,000,000 - $1,999,999 | 1.00% |
| $2,000,000 - $2,999,999 | 1.25% |
| $3,000,000 - $4,999,999 | 1.50% |
| $5,000,000 - $9,999,999 | 2.25% |
| $10,000,000 - $14,999,999 | 3.25% |
| $25,000,000+ | 3.90% |
Building Fees
- Application fee: $500-1,000
- Move-in fee: $500-1,500
- Credit check fee: $100-200
- Recognition agreement fee: $200-500
- Managing agent transfer fee: $200-500
Buyer Closing Cost Summary
Example: $1,800,000 purchase with 30% down and $1,260,000 mortgage
Seller Closing Costs
Sellers face higher closing costs than buyers, primarily due to broker commissions and transfer taxes. On a typical sale, expect costs of 7-9% of the sale price.
Broker Commission
The largest selling cost by far. Standard commission in Manhattan is 5-6% of the sale price, typically split between listing and buyer's brokers.
Example: On a $2,000,000 sale with 5% commission, you pay $100,000.
Transfer Taxes
NYC Real Property Transfer Tax:
- Up to $500,000: 1.00%
- Over $500,000: 1.425%
New York State Transfer Tax: 0.4% of sale price
Example: On a $2,000,000 sale, combined transfer taxes are $36,500 (1.825%).
Flip Tax
Many co-ops impose flip taxes—fees paid to the building when shares transfer. Common structures include 1-3% of sale price, 10-30% of profit, or per-share fees.
Example range on $2,000,000 sale: $20,000 to $60,000+ depending on building policy.
Other Seller Costs
- Attorney fee: $2,000-3,500
- Move-out/transfer fees: $500-1,000
- Payoff-related costs: $200-500
Seller Closing Cost Summary
Example: $2,000,000 sale with $800,000 mortgage payoff
Who Pays What: Customary Split
| Cost | Customary Payer |
|---|---|
| Broker commission | Seller |
| NYC/NYS transfer taxes | Seller |
| Mansion tax | Buyer |
| Flip tax | Seller |
| Mortgage-related costs | Buyer |
| Attorney fees | Each pays own |
Co-op vs. Condo Closing Costs
Co-op purchases are generally less expensive to close than equivalent condo purchases. Costs that apply to condos but not co-ops:
- Title insurance: $3,000-10,000+
- Mortgage recording tax: 1.8-2.175% of loan amount
- Recording fees: $500-1,000
On a $2,000,000 purchase with financing, these condo-specific costs could add $30,000-40,000 that co-op buyers avoid.
The Bottom Line
Closing costs are a significant component of co-op transactions—unavoidable but predictable. Buyers should understand their all-in cost before making offers; sellers should calculate true net proceeds before setting expectations.
The good news: co-op closing costs are lower than condo costs for equivalent purchases. The absence of title insurance and mortgage recording tax creates meaningful savings that contribute to co-op affordability.
Francine Crocker provides detailed closing cost projections for every client, ensuring no surprises at the closing table. Her net sheet analyses help sellers understand true proceeds and buyers budget accurately.
Want a cost projection for a specific purchase or sale? Contact Francine for a personalized analysis.