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The New York home-sale process looks very different between New York City and the rest of the state, so if you’re gearing up to sell your house in New York, be aware. Selling in NYC comes with a wide range of prices — from a median asking price of $425,000 in the Bronx to $1.5 million in Manhattan, according to StreetEasy — while median sale prices in the upstate college town of Syracuse, according to Redfin, are just $165,500. No matter where it’s located, selling a home in New York requires putting some careful thought into when to list it, how to price it and what to spend to get it ready to show. Read on to understand what to expect and how much you’ll need to pay during the sale process.
Are you ready to sell?
Trying to figure out whether you should sell now or wait? Consider the current housing market, which includes higher mortgage rates that might turn some buyers off. Right now is proving to be a great time to sell in New York, though: 51 percent of homes that sold in June sold for more than their list price, says Redfin.
However, that doesn’t mean you should rush to sell immediately. If you’re trying to sell your house while buying another at the same time, you need to factor in potential hiccups on the way to finding a new home. You should also think about the cost of living wherever you’re planning to move.
Preparing to sell
Consider three questions before you put your place on the market:
1. Is it worth upgrading your home before you sell?
Making major upgrades takes a long time, costs a lot of money and doesn’t always yield a return on investment. Plus, it’s tough to say whether prospective buyers will love your choice of cabinets or the layout of a bathroom remodel. Instead, think about some of the cheap ways to boost your property value that don’t take much time or cash.
2. What should you repair before selling your home?
Put yourself in the shoes of anyone who is trying to buy in New York. Would that leaky kitchen faucet be a red flag for you? Perhaps. Would the broken garage door make the home less valuable in your eyes? Probably. Ask a real estate agent for an expert perspective on where you should spend money versus what not to fix.
3. Should you pay to stage your home?
Here’s an easy way to make your New York home feel like it’s ready for a star turn on Broadway: Stage it. How much you’ll pay for home staging depends on the type of production you need. Simple rearranging and decluttering will be fairly affordable, while renting new furniture to fill an empty room might be quite expensive. Again, your agent can help you figure out whether home staging will help you make more money from the sale.
When is the best time to sell a house in New York?
Summer tends to be the best time to sell in New York: It’s when homes spend the fewest days on the market. In June of 2022, homes typically spent 29 days on the market — a sizable drop from just three months before, when homes were taking 49 days to sell. If you are selling in the Big Apple, be prepared for a longer wait. NYC homes spent an average of 57 days on the market in June, according to StreetEasy data.
Find a local New York real estate agent
Hiring the right real estate agent can help you nail down the best time to list your New York home, the best photos to attract buyers and the best weekend to schedule your first open house. Sure, agents cost money — typically 3 percent of the sale price to your own agent and 3 percent to the buyer’s — but it’s worth it. Research from the National Association of Realtors shows that agent-assisted sales have historically commanded around 18 percent more than FSBO (For Sale By Owner) listings.
You can always ask agents about their willingness to offer a lower commission rate. For example, let’s say an agent is willing to decrease his or her cut from 3 percent to 2.5 percent. That may sound small, but on a $900,000 sale, it saves the seller $4,500.
Also, be aware that dual agency is legal in all of New York, which means your agent could potentially represent both you and the buyer in the transaction. That can’t happen without your consent, however. And if it does happen, think about asking for a reduction in their commission fee, since they don’t have to split it with anyone.
Price your home competitively
As you try to figure out what your house is worth, start by looking at the comps in your specific area. For example, a two-bedroom, one-bathroom condo in Williamsburg, Brooklyn, is going to have an entirely different pricing strategy than a similar-sized condo in Rochester. The focus of your pricing strategy is not just to get as much money as possible; it’s about attracting as many buyers to come look at it as possible. About 50 percent of homes in the state of New York sold for above their listing price in June 2022, per Redfin, and you’ll want to figure out how to put your house into that same category. Your agent will be an invaluable resource.
Documents and disclosures in New York
The biggest document that New York sellers share is the state’s property condition disclosure statement. The seven-page form covers a range of questions about potential problems, from big deals like asbestos in the building to smaller concerns like the name of the electric service company. Sellers who fail to complete this form must pay the buyer a $500 fee. However, this rule does not apply to condos or co-ops.
If you are selling a condo or co-op or apartment, you will need to share a range of additional information about the building’s financial health, bylaws and other details. Be sure to ask your real estate agent about what forms you should complete and what documents you need to obtain to avoid any delays in the closing.
Need to sell your home fast?
If you’re in a rush to sell, here are a few ways to sell your home in New York on an accelerated timeline.
- Sell to an iBuyer: You could get an offer to buy your home in less than 24 hours from an iBuyer like Opendoor, Knock or numerous other companies that specialize in online buying. Keep in mind, though, that while you won’t have to pay Realtor commission fees, your offer will likely be lower than if you would get on the open market.
- Sell for cash: There are also plenty of companies that buy houses for cash. This could be a good option if your house needs a ton of repairs — many of these companies are looking for properties that need some extra love, so they can fix them up and get them ready for prime time.
- Sell as-is: Another option is simply selling in “as-is” condition. That lets buyers know that what they see is what they get. Even if issues are uncovered in the home inspection, you aren’t going to deal with them, or negotiate around them.
What to expect at the closing in New York
There is one last step before you officially offload your place in New York. And even though the closing is when the money is handed over, it won’t be free. Here’s a rundown of some of the typical costs to sell a house.
Cost of selling a home in New York
The biggest line item in your budget will likely be the money you need to pay the real estate agents involved in the transaction. The payouts for each agent, typically 3 percent of the total sale price each, come out of your pocket. So, on a $800,000 sale, you would likely hand over $48,000 in realty fees. There may be some wiggle room, particularly with a higher-priced property, so be sure to negotiate that cost on the front end of the deal.
And don’t forget about the cost of moving. You won’t be paying for movers at the closing, but you should budget for this expense as you try to run the numbers of your potential profit. If you’re relocating close to your current home, the price tag shouldn’t be overwhelming. However, if you’re packing up and moving to Florida, for example, be prepared to spend a sizable amount of cash to move all your belongings south.
Sellers’ closing costs
- Title insurance: Unlike in many states, the buyer usually covers the cost of title insurance in New York. So, that’s one area where you can expect to pay nothing.
- Transfer taxes: The seller typically covers the cost of New York’s real estate transfer tax. The rate is $2 for every $500 of value, so the more a property is worth, the more you pay. For example, on a $500,000 sale, the transfer tax would be $2,000. New York also has a “mansion tax” that includes an additional 1 percent on any home that sells for $1 million or more.
- Escrow fees: You may need to cover a portion of the escrow fees to have an outside party hold earnest money funds from the buyer. However, you might also include in the contract that the buyer should pay this fee.
- Attorney fees: The state of New York requires an attorney to be present at all home closings. Legal fees are due at the closing, too. The amount will vary based on their rate and the number of hours needed to complete your transaction.
- Flip tax: If you are selling a co-op in New York City, be sure to check whether your co-op charges a flip tax — essentially a fee to transfer the ownership of your apartment. The cost varies from building to building.
- Seller concessions: Sellers might need to pay for a portion of the buyer’s closing costs if the home inspection uncovers some problems with the property. One way to avoid requests for concessions is to conduct a prelisting home inspection, which can identify problems worth paying to fix before you list it.
Take the first step
Ready to get started? You’re the boss of the sale. It’s time to interview real estate agents to figure out which one you should hire. Compare a few different contenders to figure out who can do the best job for your situation.
There are a number of taxes you might have to pay when you sell your property in New York. Sellers normally cover the real estate transfer tax, which is $2 for every $500 in value — and higher if your property sells for more than $1 million, triggering the state’s “mansion tax.” If you have outstanding property taxes, be prepared to pay for those at closing as well. Additionally, if you are selling a co-op in New York City, you might be required to pay what’s commonly called a “flip tax.” It’s not really a government tax, though; the fee goes to the corporation.
The state of New York requires an attorney to be present at all home closings. It’s always wise to have legal expertise on your side throughout the process, though, especially when you’re dealing with large dollar amounts. There can be a maze of tax laws you need to navigate.
Yes, sellers pay plenty of closing costs in New York, as they do in any state. In addition to paying commissions to the real estate agents involved in the transaction, the seller is traditionally the one who pays for the real estate transfer tax. The rate is $2 for every $500 of value; so, on a $500,000 sale, the transfer tax would be $2,000. There are also escrow fees, attorney fees and other costs to consider.
If you want to take the FSBO route in New York, be prepared to do all the work that a real estate agent would do. This includes hiring someone to take professional photographs, creating a listing to share online, scheduling showings and open houses, fielding offers, negotiating and more. It’s a lot of work, and you’ll need to get the pricing strategy right to attract buyers while maximizing your profit potential.