The NYC new development closing cost guide

If you are buying NYC residential property for $1 million or more, New York's mansion tax applies. The rate increases at higher purchase prices.

This is generally a buyer tax, so do not build your negotiation around making it disappear. Instead, focus on the costs the sponsor has more control over.

In a normal resale, transfer taxes are generally seller costs.

New development offering plans and contracts can instead require the buyer to reimburse or pay certain sponsor transfer taxes. On an expensive apartment, that can be a meaningful number. And because this is a deal term, it can sometimes become part of the negotiation.

Instead of only asking whether the sponsor will lower the price, ask whether the sponsor will cover the transfer taxes.

Depending on the deal, a sponsor may prefer giving a closing cost concession rather than publicly reducing the apartment's price.

Some new developments require the buyer to pay a fee toward the sponsor's attorney. That is separate from paying your own attorney.

If it appears in the offering plan or contract, ask whether the sponsor will waive or absorb it. The answer may be no. But this is exactly the kind of smaller line item that is worth asking about.

A new condo may require buyers to make a working capital contribution at closing. This gives the new building cash to operate. The amount and whether it is refundable depend on the building's documents.

Do not assume it is negotiable simply because it appears on the closing statement. First ask your attorney what the offering plan actually requires. Then ask whether the sponsor is willing to provide a credit for it.

If you are financing the purchase, you will have costs connected to the loan. That can include mortgage recording tax, lender fees, appraisal costs and mortgage title insurance.

These are not all sponsor charges. Your leverage may instead be with the lender. Compare loan estimates from more than one lender and ask about lender credits, rates and fees. A tiny difference in financing can be worth much more than negotiating a $1,000 building fee.

You will normally have your own attorney. You will also have title related costs in a condo purchase.

These are not the first places we would try to save money simply to make the closing cost number smaller. The expensive mistake is not paying a few thousand dollars for good advice. It is buying a multimillion dollar apartment without understanding what you are agreeing to.

If you are buying new development, start with the whole deal, not one fee. Depending on the building, unit, market and sponsor's willingness to negotiate, buyers may ask about:

• Purchase price
• Sponsor paid transfer taxes
• Sponsor attorney fee
• Working capital contribution or an equivalent credit
• Closing cost credits
• Common charge credits
• Storage or other building related concessions

Not every sponsor will negotiate these. A sponsor with multiple offers on a desirable unit has very different incentives from one trying to move remaining inventory.

That is why the question is not whether a fee is negotiable. The better question is where this sponsor has room to make the overall deal better.