One of the most common surprises for first-time buyers in New York City is the closing cost number. In Brooklyn, closing costs can add up to 2–5% of the purchase price on top of your down payment — and if you're buying above $1M, certain additional taxes kick in that can push that number higher. Here's a clear breakdown of what to expect.
Mortgage-Related Costs
If you're financing the purchase, expect to pay:
Origination fees: Lenders charge origination or underwriting fees, typically 0.5–1% of the loan amount. Shop around — these vary.
Mortgage recording tax: This is one of the largest and most misunderstood closing costs in New York. The state and city charge a tax on the mortgage itself — currently 1.8% on loans under $500K and 1.925% on loans above $500K. On a $1.5M mortgage, that's roughly $28,875. This is paid by the buyer. Note: co-op purchases do not have mortgage recording tax because you're technically buying shares, not real property.
Appraisal: Typically $500–$1,500 depending on the property.
Bank attorney fee: Many lenders require their own attorney to represent them at closing. Usually $1,000–$2,000.
Transfer and Title Costs
Title insurance: Required by lenders and strongly recommended for buyers even in cash purchases. Protects you against defects in the chain of title — undisclosed liens, errors, fraud. Expect $2,000–$5,000+ depending on purchase price.
Title search and exam fees: Usually bundled with title insurance, but may be listed separately. Expect $500–$1,000.
NYC transfer tax: Paid by the seller in most transactions, but confirm with your attorney — in some deals it's negotiated to the buyer.
The Mansion Tax
New York State charges a buyer-paid transfer tax colloquially known as the "mansion tax" on all residential purchases at or above $1M. The rates are tiered:
- $1M–$1.999M: 1.0%
- $2M–$2.999M: 1.25%
- $3M–$4.999M: 1.5%
- $5M–$9.999M: 2.25%
- $10M–$14.999M: 3.25%
- $15M–$19.999M: 3.5%
- $20M–$24.999M: 3.75%
- $25M+: 3.9%
On a $2.5M Brooklyn brownstone, the mansion tax alone is $31,250.
Attorney Fees
In New York, you need your own real estate attorney to represent you in a purchase — this is non-negotiable. Fees typically range from $2,500–$5,000+ depending on transaction complexity. For co-op purchases (which involve more due diligence), fees may be on the higher end.
Co-op Specific Costs
Co-op purchases have a different closing cost profile — no mortgage recording tax (a significant saving), but you may face:
- Flip tax: A fee paid to the co-op by the seller or buyer at closing, often 1–2% of the sale price. Varies by building.
- Move-in deposit: Many co-ops require a refundable move-in deposit.
- Recognition agreement fee and other board-related administrative costs.
Total Estimate
For a $2M financed purchase of a condo or townhouse in Brooklyn, a rough total closing cost estimate:
- Mansion tax: ~$25,000
- Mortgage recording tax: ~$37,500
- Title insurance: ~$4,000
- Attorney: ~$3,000
- Lender fees: ~$5,000–$10,000
- Miscellaneous: ~$1,000–$2,000
Total: roughly $75,000–$82,000 on top of your down payment.
This is not a number to be surprised by at closing. Budget for it from the start of your search.
