How Are Closing Costs Handled for Sellers on Long Island?
Many sellers focus on the sale price of their home, but the net proceeds depend on closing costs as well. On Long Island, sellers typically pay several specific expenses at closing. Understanding these costs ahead of time helps avoid surprises and allows for better financial planning.
Typical Seller Closing Costs on Long Island
While exact numbers vary by property and transaction structure, sellers usually pay:
Real estate broker commissions
New York State transfer tax
Attorney fees
Title-related charges
Outstanding property taxes or utilities
Mortgage payoff and related fees
These costs are deducted from the proceeds of the sale at closing.
Real Estate Broker Commissions
The largest cost for most sellers is the broker commission.
This fee:
Is agreed upon in the listing agreement
Is typically split between the listing agent and buyer’s agent
Is paid from the seller’s proceeds at closing
Commission structures can vary depending on the brokerage agreement.
New York State Transfer Tax
New York requires a transfer tax when property ownership changes.
For most residential transactions:
The seller pays the tax
The rate is $4 per $1,000 of sale price
For example:
A $1,000,000 sale typically carries a $4,000 state transfer tax.
In some areas or high-value transactions, additional taxes may apply.
Attorney Fees
Because New York real estate transactions are attorney-driven, sellers typically hire a real estate attorney.
Typical services include:
Drafting and negotiating the contract
Reviewing title and municipal documentation
Preparing closing paperwork
Attending the closing
Attorney fees vary depending on the complexity of the transaction.
Mortgage Payoff Costs
If the property has an existing mortgage, the lender will be paid off at closing.
The payoff may include:
Remaining principal balance
Accrued interest
Administrative or recording fees
This amount is calculated in the final closing statement.
Title & Recording Charges
While buyers usually pay for title insurance, sellers may be responsible for certain related costs, such as:
Recording fees
Document preparation
Title search adjustments
These costs are typically modest compared to other expenses.
Property Tax Adjustments
At closing, property taxes are prorated between buyer and seller.
If the seller has prepaid taxes for the year, they may receive a credit from the buyer.
If taxes are unpaid, the balance will be deducted from proceeds.
Why Understanding Net Proceeds Matters
Knowing your closing costs helps determine:
Your actual net profit
Your next home purchase budget
Timing for financial planning
A detailed closing estimate early in the process helps sellers plan with confidence.
FAQs
Who pays closing costs when selling a home on Long Island?
Sellers typically pay broker commissions, transfer taxes, and their attorney fees. For a personalized estimate of your closing costs, visit 👉 https://www.theericbermanteam.com/contact-us
What is the New York transfer tax?
New York State charges $4 per $1,000 of the sale price, typically paid by the seller. If you want help estimating the tax on your home, visit 👉 https://www.theericbermanteam.com/contact-us
Are property taxes adjusted at closing?
Yes. Taxes are prorated between buyer and seller based on the closing date. For help understanding your adjustments, visit 👉 https://www.theericbermanteam.com/contact-us
Do sellers pay title insurance?
Usually buyers purchase title insurance, but sellers may pay certain title-related fees. To review your expected costs, visit 👉 https://www.theericbermanteam.com/contact-us
How can sellers estimate their net proceeds?
A net sheet can outline commissions, taxes, and payoff amounts before listing. To get a personalized estimate, visit 👉 https://www.theericbermanteam.com/contact-us
Eric Berman, REALTOR®
Compass Greater NY
917-225-8596
eric@ericbermanre.com
www.theericbermanteam.com
