By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
Most Long Island sellers are surprised by how much comes out of their proceeds at closing. Between the brokerage commission, NY State Transfer Tax, attorney fees, mortgage payoff, and a handful of smaller charges, total seller-side closing costs typically run 6%–8% of the sale price for standard transactions. Knowing the line items in advance — and which ones are negotiable — is the difference between a clear net number and an unwelcome surprise on closing day.
What "Closing Costs" Actually Means for a Seller
Closing costs is one of those phrases that gets used loosely. For a buyer, it usually refers to lender fees, title insurance, prepaid taxes, and the down payment. For a seller, the meaning is different — it's the total set of charges deducted from the sale price between the gross number on the contract and the net amount that lands in the seller's account.
On Long Island, those charges typically include the brokerage commission, NY State Transfer Tax, the seller's attorney fee, mortgage payoff (if applicable), recording fees, and a few smaller line items. Each one has its own logic, its own typical range, and a different degree of negotiability. A clear-eyed seller works through the list before listing — not after an offer is signed — because some of these costs change the math on what's worth accepting.
The one thing that does not belong on the seller's closing cost list in New York: the buyer's mortgage costs. Those stay on the buyer's side. Nothing in a standard New York transaction obligates a seller to cover the buyer's loan origination, appraisal, or title insurance unless the seller agrees to a specific concession during negotiation.
The Brokerage Commission — Almost Always the Largest Line Item
The brokerage commission is, in most Long Island transactions, the single biggest closing cost a seller pays. It's typically structured as a percentage of the sale price, split between the listing brokerage and the buyer's brokerage. Total commissions on Long Island most commonly fall in a range — though every listing is negotiated individually, and there is no fixed or required rate.
Following the 2024 NAR settlement changes, how commissions are presented and negotiated has shifted. Buyer-side compensation is no longer published in the MLS the way it once was, which means listing presentations now include explicit conversations about how the buyer's agent will be compensated and from which side. For sellers, this has made the commission discussion more transparent — and more central to the listing decision.
The commission is paid at closing, deducted from the seller's proceeds before any other line item is calculated. Commission structure is one of the most important conversations to have at the listing presentation, well before signing. Different brokerages, different listing agents, and different marketing strategies justify different commission structures, and the right answer depends on the home, the price band, and what kind of marketing the listing actually requires.
NY State Transfer Tax and the Mansion Tax
New York charges a state transfer tax of $4 per $1,000 of sale price (or $2 per $500), paid by the seller. On a $1.2M home, that's $4,800. On a $2.5M home, $10,000. It's straightforward math, but it surprises sellers who are used to other states' lower transfer tax structures.
The Mansion Tax is separate and applies to sales of $1M and above. It's an additional 1% of the sale price — $10,000 on a $1M sale, $20,000 on a $2M sale. The Mansion Tax is technically paid by the buyer, not the seller, but it absolutely affects the seller's reality: at the $1M threshold, buyers face a sudden $10,000 tax cliff that didn't exist at $999,999. That cliff shapes how offers come in around that price band, and it's part of why pricing strategy at $999,000 versus $1,025,000 isn't just a marketing question — it's a market-shaping decision.
For Manhasset, Port Washington, Garden City, Roslyn, Plandome, Old Westbury, Locust Valley, and other $1M+ markets, the Mansion Tax is a permanent feature of the negotiation. Sellers in these markets should expect their listing agent and real estate attorney to bring it up early and walk them through how it affects buyer affordability.
For sales in the Queens portion of the market, there's an additional layer: the NYC Real Property Transfer Tax (RPTT). That applies to Queens sales but not Nassau, and the calculation is different from the state-level transfer tax. Sellers in Bayside, Fresh Meadows, Jamaica Estates, Douglaston, and Whitestone should plan for that additional cost.
Real Estate Attorney Fees
New York is an attorney state, which means every residential closing on Long Island runs through a real estate attorney on the seller's side. Standard residential transaction fees typically run between $1,500 and $3,000, paid at closing as a flat rate deducted from proceeds. Luxury, waterfront, or unusually complex deals — multiple parcels, estate sales, or unusual title situations — can run higher.
This isn't a place to cut corners. A strong real estate attorney is the seller's primary protection during contract negotiation, inspection issues, and closing day surprises. The fee is small relative to the rest of the transaction, and the value is concentrated at exactly the moments when something might otherwise go wrong.
Mortgage Payoff and Recording Fees
If there's an existing mortgage on the home, the full payoff balance comes out of the proceeds at closing. This sounds obvious, but two details surprise sellers regularly. First, the payoff number includes accrued interest through the day of closing — not the principal balance shown on the most recent statement. Second, if the closing slips by even a few days, the payoff number changes, because daily interest keeps accruing.
Lenders provide a written payoff statement (called a payoff letter) good for a specific window, typically 10–14 days. The seller's attorney coordinates the payoff request, confirms the wire amount, and ensures the mortgage gets satisfied and the lien released after closing.
Beyond the mortgage payoff, sellers pay recording fees for the deed and any documents being filed in the county clerk's office. In Nassau County, this is typically a few hundred dollars. In Queens (filed with NYC's Department of Finance), the fees are slightly higher and structured differently. The attorney handles these as part of the closing.
If there's a home equity line of credit or second mortgage on the property, that gets paid off and recorded as satisfied at the same time. Sellers who haven't drawn on a HELOC in years sometimes forget it's even there until the title search surfaces it.
The Smaller Line Items
Beyond the major categories, a Long Island seller typically pays a handful of smaller charges:
The first is title-related charges on the seller's side. While the buyer pays for title insurance, the seller is sometimes responsible for clearing title issues that surface during the search — old liens, judgments, undischarged mortgages from decades ago, or cloud-on-title issues. Most clear easily; some don't, and resolving them can add cost and time.
The second is proration of property taxes and other annual charges. New York taxes are paid in arrears, which means the seller owes the buyer for the portion of the tax year they owned the home. This is calculated to the day of closing and shows up as a credit to the buyer on the closing statement. For Nassau County sellers, this can be significant given the county's higher property tax base.
The third is utility transfers, fuel reconciliations, and post-closing walkthrough adjustments. If there's oil in the tank at closing, the seller is typically reimbursed for the value at current market rate. Water, gas, and electric are settled to the day of closing.
None of these are huge in isolation, but together they can run a few thousand dollars in either direction. A clear closing statement — prepared by the seller's attorney before the closing — lays them all out cleanly.
What This Looks Like in Total
For a typical Long Island sale, total seller-side closing costs (excluding the mortgage payoff itself) generally land in the range of 6%–8% of the sale price. The brokerage commission is the largest portion of that. Transfer tax, attorney fee, recording fees, and prorations make up the rest.
For sellers who want a cleaner sense of what their specific net number might look like before listing, the home valuation tool is a quiet starting point, and a follow-up conversation can produce a customized net sheet that walks through every line item against the home's likely sale price.
The exact percentage varies based on the price band, the commission structure agreed to in the listing presentation, whether there's a Mansion Tax in play, and how much title cleanup the deal requires. But 6%–8% is a reasonable working number for most Long Island sellers planning a sale.
Why Knowing the Numbers Early Matters
The reason to work through closing costs before listing — not during contract negotiation — is that the net proceeds number shapes every decision the seller makes. Whether to accept an offer at one price versus another, whether to negotiate on inspection items versus hold the line, whether to take a faster cash offer versus a higher financed offer with longer timing: all of these decisions look different when the seller knows their bottom-line net number.
Sellers who go into a transaction with only the gross sale price in mind tend to be surprised — sometimes badly — by the closing statement. Sellers who've worked through the math in advance with their listing agent and attorney walk into closing day knowing exactly what they're walking out with. That clarity is one of the simplest ways to make a Long Island home sale feel less stressful and more in the seller's control.
Q: What percentage of the sale price does a Long Island seller typically pay in closing costs?
A: Total seller-side closing costs on Long Island generally run between 6% and 8% of the sale price, excluding the mortgage payoff itself. The brokerage commission is the single largest portion of that. NY State Transfer Tax, attorney fees, recording fees, and tax prorations make up most of the rest. The exact percentage depends on the commission structure, whether the Mansion Tax applies, and any title cleanup the deal requires.
Q: Who pays the NY Mansion Tax — the buyer or the seller?
A: The Mansion Tax is technically paid by the buyer, not the seller. However, on sales of $1M and above, that 1% tax affects what buyers can afford to offer — meaning sellers in $1M+ markets like Manhasset, Port Washington, Garden City, and Old Westbury feel the impact through buyer behavior even though they're not writing the check.
Q: Is the brokerage commission negotiable on Long Island?
A: Commission rates are always negotiated individually between the seller and the listing brokerage — there is no fixed or required rate. Different brokerages, marketing strategies, and price bands justify different structures. The conversation about commission belongs at the listing presentation, before the listing agreement is signed, not after the home is on the market.
Q: How is the NY State Transfer Tax calculated?
A: The NY State Transfer Tax is $4 per $1,000 of sale price (or $2 per $500), paid by the seller. On a $1M sale, that's $4,000. On a $2M sale, $8,000. It's a flat rate, easy to calculate, and shows up as a deduction on the seller's closing statement.
Q: When does the seller actually pay these closing costs?
A: Almost all seller-side closing costs are deducted from the sale proceeds at closing — not paid out of pocket. The seller's attorney prepares a closing statement showing every line item, and the seller wires or receives the net number after all charges are subtracted. The only exception is if a seller has agreed to specific concessions or repairs that need to be paid before closing, which is unusual.
For sellers thinking through a Long Island home sale, working out the net proceeds number early is one of the simplest ways to make the entire process feel less unpredictable. Every decision from list price to offer acceptance gets clearer when the bottom-line math is already on the page. When the time is right to walk through a customized net sheet for a specific home — or just talk through what to expect — the door is open.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens REALTOR® | Compass 1468 Northern Blvd, Manhasset, NY 11030 (917) 225-8596 | eric@ericbermanteam.com | theericbermanteam.com
