How much does it cost to sell a house on Long Island?
Plan for the real estate commission (which is negotiable and not set by law), New York State transfer tax of 0.4% of the price, your attorney's fee, title and payoff fees, and any repairs or credits you agree to. Ask for a net sheet that shows what you would walk away with at your likely sale price before you list.
What sellers usually pay
Real estate commission. Rates are negotiable and not set by law. Since August 2024, compensation for a buyer's agent is no longer shown on the MLS and is negotiated separately.
New York State transfer tax: $2 for every $500 of the price (0.4%). On a $900,000 sale, that is $3,600.
Your real estate attorney's fee. Get it in writing before you sign a listing or a contract.
Title-related fees, such as the payoff or pick-up fee to the title closer.
Your mortgage payoff, plus any liens, judgments or open violations that must be cleared.
Closing adjustments for property taxes, water and heating oil. Depending on what you have prepaid, these can be a credit or a charge.
Any repairs or credits you agree to after the buyer's inspection.
What the buyer pays, not you
The 1% mansion tax on sales of $1 million or more is the buyer's obligation. So is the mortgage recording tax on the buyer's loan, and the Peconic Bay tax in the East End towns.
Required disclosure
Since March 20, 2024, New York sellers of one- to four-family homes must complete the Property Condition Disclosure Statement. The old option of giving the buyer a $500 credit instead is gone, and the form now includes questions about flood zones, flood insurance and past flood claims. Complete it honestly and with your attorney's help.
Long Island surprises that delay closings
Open permits, or additions, decks and finished basements without a certificate of occupancy. Clearing them can take weeks, so check with your town building department before you list.
An accessory or basement apartment without the town's permits.
A buried heating oil tank, whether in use or abandoned.
Cesspools in Suffolk. There is no blanket county rule to replace a working cesspool at sale, but buyers and lenders may ask for an inspection, and a failing system must be replaced with an approved one. County and state grants can help pay for an upgrade.
Taxes on your profit
Capital gains tax is not a closing cost, but it affects what you keep. Federal rules let many owners exclude up to $250,000 of gain ($500,000 for married couples filing jointly) on a primary home they owned and lived in for two of the last five years. Ask your tax professional how this applies to you.
Is the real estate commission negotiable?
Yes. Commission rates are not set by law and are negotiated between you and your listing brokerage.
Do I have to pay the buyer's agent?
No law requires it. You can choose whether to offer compensation to a buyer's agent. Buyers now sign a written agreement with their agent that states how that agent is paid.
Who pays the mansion tax when I sell?
The buyer. New York law makes the buyer liable for the 1% tax on residential sales of $1 million or more.
Vladimir Reyes Fuentes, Licensed Real Estate Salesperson, Khan & Sons Realty LLC, 1025 Old Country Rd, Suite 225, Westbury, NY 11590. (516) 595-5932. Serving Nassau & Suffolk Counties.