Issue 111 - Closing Costs: What You Should Know

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Issue 111 – Closing Costs: What You Should Know

July 1, 2025

In New York City real estate, just when you think you’ve reached your limit, there’s always more. Enter: the infamous closing costs. These fees are substantial and in addition to the purchase price. Many buyers find them shocking and disheartening at the closing table.

The term “closing costs” can encompass the friction costs associated with the resale of condos and co-ops, as well as new construction. Each one has a nuanced cost specific to that type of ownership, such as attorney, brokers and bank fees, capital contributions, the mortgage filing recording tax, transfer taxes, title insurance (condos and townhomes), the flip tax (for co-ops), the mansion tax (if the purchase is over $1 million), and a portion of the Resident Manager’s Unit [RMU] (if in new construction).

When buying or selling a property, the total sum of closing costs can be hefty, sometimes as high as 10 percent over the purchase price. A buyer will typically pay between 2 percent to as much as 6 percent on a resale, depending on whether it is a condo, townhouse or co-op; that amount can be substantially higher for new development purchases. Conversely, a seller who originally bought into new construction and had to pay transfer taxes with that purchase now has to pay them again when selling.

Those purchasing in a new development should be aware that additional breadth of friction costs will be incurred, as the building has not yet been occupied. Those fees include contributing one to two months of common charges to the building’s reserve fund to comply with Fannie Mae and Freddie Mac loan requirements, as well as purchasing a portion of the Resident Manager’s Unit [RMU] if the building has a resident manager or superintendent.

All properties listed for over $1 million are subject to adjusted mansion taxes, which are based on a sliding scale determined by the sales price, in addition to transfer taxes typically paid by the sponsor (i.e., the developer).

According to StreetEasy, a third-party listing site for New York City, “A good rule of thumb for buyers is to be prepared to spend 2-5% of the purchase price in closing costs, and expect the percentage to be on the higher end for condos, townhouses, homes over $1 million, and new developments.”

*Table provided by StreetEasy – Exact mansion tax rates are as follows:

Mansion Tax Rate	Purchase Price
1.0%	$1,000,000 – $1,999,999
1.25%	$2,000,000 – $2,999,999
1.50%	$3,000,000 – $4,999,999
2.25%	$5,000,000 – $9,999,999
3.25%	$10,000,000 – $14,999,999
3.50%	$15,000,000 – $19,999,999
3.75%	$20,000,000 – $24,999,999
3.90%	$25,000,000 or greater

For example, the mansion tax is 1.25% for properties listed between $2 million and $2.99 million, 1.50% for homes between $3 million and $4.99 million, and as much as 3.90% for a property with a sales price of $25 million.

This amount is compounded by the combined city and state transfer tax, which has also increased substantially, going from a flat rate of 1.825% (regardless of the sales price) to a sliding scale model, as outlined below:

1.4% for sales below $500,000
1.825% for sales between $500,000 and $3 million
2.075% for sales of $3 million or more

Therefore, a buyer purchasing a property for over $3 million could end up paying nearly 7% of the price just for the mansion tax and transfer tax.

Consider this only-in-NYC scenario: In 2019, billionaire Kenneth C. Griffen bought a penthouse at 220 Central Park South for a record-breaking $238 million, making it the most expensive residential sale in U.S. history at the time. Although the exact closing costs are not publicly available, estimates indicate the mansion tax alone would have been around $9.282 million! He would have also had to pay the transfer tax at the 2.075% rate, equaling over $4 million!

The only upside to some closing costs is that they offer the ability to negotiate, depending on the market conditions. When buying in a new construction, for example, the sponsor typically expects the buyer to absorb these costs. However, in a down market, the buyer can potentially pass the mansion and transfer tax costs back to the sponsor, who may be willing to absorb the fees as a concession, thereby adding to the net savings for the buyer.

In some cases, a buyer could even try to incorporate closing costs into the mortgage. Whether or not this happens, ultimately depends on how creative your mortgage broker is in structuring the loan. Certain banks are also able to make exceptions versus maintaining ‘vanilla’ loans that offer no flexibility.

According to an article by Evelyn Battaglia in BrickUnderground, “The responsibility for some of these taxes is not set in stone. When the market is slow, inventory is high, or an apartment is difficult to sell, a seller or developer may be willing to cover some costs to seal a deal.”

Assembling a team of well-versed and experienced professionals can make a substantial difference in the amount you have to spend. The key is identifying what to ask for and when, which can save you as much as 5% to 10% over the negotiation of the sales price, creating a quite compelling deal.

It’s essential to work with people who know how to effectively close these kinds of deals. You should also price shop, comparing quotes from all the professionals you work with, notably real estate attorneys and mortgage brokers (or lenders), to understand the specific costs associated with each transaction and explore strategies for reducing them, as all those friction costs certainly add up.

The person who understands the structure in critical detail and knows how to negotiate it ultimately yields the most success. It is an art form to know how to structure deals effortlessly and garner the most profound value in real-time for their clients.

By exploring strategies for reducing all these costs—and most importantly, examining the total value proposition—you can have a stress-free closing, knowing that you were ultimately able to lock in savings before you even move in!

Issue 126 – Who Owns the Listing?

October 1, 2026

New York real estate is quietly becoming a battle for access, and most consumers don’t even realize the rules are changing.

The most important battle may no longer be who gets the listing — it may be who gets to see it. For most of my career, a listing broker’s job has been straightforward: create demand, tell the property’s story, expose it to the right buyers, negotiate expertly, and ultimately get the best possible outcome for the seller. Now a fundamental element of that role is shifting — access itself.

That does not mean private listings are inherently problematic, or even new. I’ve sold properties quietly myself. Sometimes discretion is necessary—for privacy reasons, security concerns, divorce proceedings, an occupied home, or to test a pricing strategy.

But what was once the exception is becoming more the norm.

As of August 12, Marketproof identified 440 Manhattan properties being offered as ‘Participant Only’ listings, representing approximately $1.94 billion in asking volume. Of this total, 47 new Participant Only listings were added in June, 144 in July, and 153 in just the first 12 days of August.

This isn’t just a trophy-market phenomenon. Marketproof found that nearly 30% of those listings were asking under $1 million. And The Real Deal’s recent analysis points in the same direction, reporting a 30% increase in off-market residential sales volume across Manhattan, Brooklyn, and Queens in 2025.

Put those numbers together, and it becomes difficult to dismiss private real estate as merely the world of whisper listings and ultra-high-net-worth sellers. Private marketing is becoming mainstream, which deserves a closer look. We need to ascertain who benefits.

So, who owns the listing? Legally, the answer is obvious — the seller owns the property. In practice, the picture is more nuanced. Listings have become valuable currency: they attract buyers, who generate data and relationships. And those relationships lead to transactions that create market share and leverage.

Perhaps we should be asking a different question: When did exclusivity stop meaning the right to represent a property and start meaning the right to restrict who sees it?

The seller wants the best possible combination of price, privacy, certainty, and timing. The broker wants to represent the seller successfully, protect the relationship, and complete the transaction. The brokerage or platform has another economic interest: inventory. Listings attract consumers, engagement, data, and future business. None of these interests is inherently improper. But when they diverge, we need to be very clear about whose interest comes first.

For me, the seller has to be the North Star. That is where the debate becomes complicated.

StreetEasy has argued that the growth of private listings creates artificial scarcity and gatekeeping. Supporters of private marketing argue that sellers should have the right to decide how — and how publicly — their homes are marketed.

I understand both arguments. But I keep coming back to one question: Does restricting exposure actually create a better outcome for the seller? If it does, show me.

The early data is fascinating, partly because it doesn’t give us a definitive answer. Marketproof found that 78% of the Participant Only listings it analyzed had previously been publicly marketed. Of those Participant Only listings that came off the market without selling, roughly one-third subsequently returned to the public market. Additionally, those relistings came back at a median asking price 6.4% below their Participant Only asking price, according to Marketproof. While interesting, it doesn’t prove that private marketing is ineffective.

There aren’t enough matched transactions yet to determine whether comparable privately marketed properties ultimately sell for more or less than publicly marketed ones. That’s precisely why I think the industry should be careful about declaring victory on either side.

Real estate value is established through imperfect but important information: comparable transactions, current competition, buyer behavior, and ultimately what someone is willing to pay. Exposure is part of that price-discovery mechanism, but it doesn’t mean maximum exposure always produces maximum price.

Scarcity can create urgency. A sophisticated broker may know exactly which handful of buyers are right for a particular property. However, we need to be careful not to confuse controlled exposure with manufactured scarcity.

Another reason this conversation matters now: Consolidation is changing the brokerage business. Large firms can offer extraordinary advantages — technology, referral networks, data, marketing resources, and access to enormous numbers of agents and consumers. Scale itself isn’t the problem, But when scale is combined with proprietary inventory, the competitive equation changes.

For years, technology moved residential real estate toward greater transparency. Consumers gained access to listings, price histories, comparable sales, building information, and market data that once largely resided with brokers. That disrupted our industry, but I think it made good brokers more valuable — not less. A great broker shouldn’t be afraid of this transparency.

Our value is actually understanding the information. It’s knowing why one apartment deserves $2,000 per square foot while another in the same building doesn’t. It’s knowing when to walk away from a bidding war, how to position an unusual property, how to navigate a board, how to structure a complicated deal — and how to tell a seller something they may not want to hear.

None of this means every property should automatically be marketed publicly. But as a broker, my responsibility is making sure the seller understands the nuance.

Whenever an industry undergoes structural change, I find it useful to ask one simple question: Who benefits? And I always circle back to the ultimate one: What will produce the best outcome for my client?

Before New York embraces a fundamentally different marketplace, we should demand enough transparency to know, because the future of residential brokerage shouldn’t be decided solely by which company has the largest network or which website has the largest audience.

None of us should confuse access to the listing with ownership of the client’s interests.

So, if private marketing creates greater value for sellers, let’s prove it. If an open marketplace creates greater value, let’s prove that too. If the answer depends upon the particular seller and property, let’s have the sophistication to say so.

Because ultimately, the most important question isn’t whether a listing is public or private; it’s whether restricting access creates value for the seller — or just value for the company controlling the access. Those are not the same thing.

And right now, New York real estate needs to understand the difference.