How to Sell Your NYC Home
Thinking of the money you can make selling your home is exhilarating. But it’s equally important to consider the total cost to sell a home in NYC before you list it. Your out-of-pocket costs for the transaction, including the broker’s commission, will easily total thousands of dollars. Here, we sketch out the fees and taxes homeowners should expect to pay when putting an apartment or townhouse on the market.
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1. Fixing Up Your Home Before You Sell
Arguably, this is the first expense to expect when considering the total cost to sell a home in NYC. Making repairs can boost a home’s value and appeal, and it’s typically done when getting ready to sell. Updates and fixes can be minor. Updating kitchen cabinet hardware, painting walls, or replacing outdated light fixtures can improve the first impression your home makes. “For example, do you have a huge chandelier that drops down, and your ceilings are only eight feet high? It would be worth it to install a flat fixture instead, so there’s more volume to the room,” says Gill Chowdhury, an associate real estate broker at Warburg Realty.
One doable idea is to replace tired wallpaper with a fresh coat of paint. Costs can range from a few hundred dollars if you DIY to thousands if you hire a pro. “Painting is a relatively minor investment for what you get for it,” says Michael J. Franco, a licensed associate real estate broker at Compass. “It’s such a great enhancement to have a freshly painted apartment. It makes people feel like there’s less to do if they buy the home.”
2. Staging Your Home
Home staging isn’t always a must. One deciding factor is how up-to-date your apartment looks. If things look a little dated, some fresh decor is the cure. How much you spend depends on the apartment’s size, according to Chowdhury. “Expect to spend about $8,000 minimum to stage a one-bedroom apartment,” he says. “Remember that you will have to pay a set-up fee and commit to a three to a six-month contract.”
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3. Real Estate Attorney Fees
There’s no getting around this one when it comes to the total cost to sell a home in NYC. Here, an attorney is required for every real estate closing. To that end, expect to spend $2,000 to $4,000, says Kelsey Martin, co-founder of The Davidson Martin Team at Compass Real Estate. FYI, more complex transactions can cost considerably more. One example is when a borrow and seller are in two different states or countries.
4. Real Estate Broker Fees
Home sellers in NYC can expect to spend 6% of the overall sale price to compensate the broker you’ve commissioned to close your deal. This fee is usually split between your broker and the buyer’s broker.
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5. Capital Gains Tax
In a nutshell, the capital gains tax you pay when you sell your home depends on your income bracket and the profit you are making. For instance, homeowners who qualify may exclude $250K of the gain from their income, and that number goes up to $500K if the seller files a joint return with their spouse. Another good to know, you can reduce your capital gains tax if you’ve made particular renovations to your apartment or building. For more details, speak with your accountant about your specific situation.
6. Flip Tax
When it comes to the total cost to sell a home in NYC, here’s some good news for condo owners: Flip tax is only applicable to co-ops. It is commonly 1.5% of the sale price and isn’t technically a tax. “This is an internal fee the building charges to boost revenue and contribute to capital improvements,” Chowdhury says. “It can also be a dollar amount per share or a percentage of the gross selling price.”
7. New York City Transfer Tax
Home sellers can expect to spend 1.425% of the sale price if your property sells for more than $500,000. For properties valued at $500,000 or less, the transfer tax is 1%. Heads up! You can expect to pay a New York State transfer tax as well, which starts at 0.4%. “In certain situations, the seller will take a lower selling price and let the buyer pay the transfer taxes,” says Nikki Sun, a real estate agent at Compass. “I always say that buyers need to know about transfer taxes even if they don’t have to pay it. After all, you will sell your apartment one day, too.”
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