Special offer

Are New Yorkers Getting Robbed at the Closing Table?

By
Real Estate Agent with Options Realty

There was a recent publication, offered to New York Realtors, by the New York State Association of Realtors (NYSAR). There is encouragement provided via a caveat at the top, “This update on government and politics in New York State is a weekly publication from the NYSAR’S Government Affairs Department. REALTOR members and staff are urged to share this information as appropriate and reprint it in membership publications.”



GOOD.
It would appear that the NYSAR is acknowledging, via this email, that closing costs for New York home buyers and sellers (at twice the national average, as I am understanding the figures below) is TOO MUCH.

THE REPORT INCLUDES THE FOLLOWING: “New Yorkers still paying highest closing costs in the nation- for the third year in a row, Bankrate.com ranked New York’s closing costs as the most expensive in the nation. On average, NewYorkers pay $3830. to close a $200,000. mortgage; more than $1,000. more than the national average of $2736. The addition of local and state real-estate-related taxes hikes the national average final closing cost in New York to $7194. New Yorkers pay nearly double the national average of $3681. and 60 percent more than the least expensive state, Indiana, where residents pay a total of $2339. for the same mortgage. New York’s origination fees, title insurance, attorney costs and of course high taxes contribute to the hefty final price tag on a home purchase in the Empire State.


What does this have to do with YOU? This acknowledgement of absurd New York closing costs comes on the heels of a Department of Justice and Federal Trade Commission questions about fair trade in the CLOSING COST VENUE. New York is only one of a very few states that requires the fee of an attorney to perform the contract and subsequent addenda review. Most states permit the practice of real estate without this cost.

Is ATTORNEY REVIEW supported by the real estate community? GRUDGINGLY, and here’s why: attorneys are simply the go-to in New York out of habit- nothing else. GET MY ATTORNEY. Guess what? It’s an incurred expense (as a built-in) that is subject to the discretion of the buyer/seller. Why are most states able to conduct a real estate transaction in the absence of the attorney contingent? Probably because…A HOUSE IS A HOUSE. Rocket science is not required.


New York is increasing the required hours for licensees. While this might not provide the comfort of an outside opinion, it is a step forward for real estate agents in New York. Bottom line: you can pick a bad lawyer, and you can pick a bad real estate agent.

The best option is to be VERY CLEAR, with your own investigation, as to the value of the home that you’d like to buy, or sell. A great real estate agent will provide reality. While a lawyer (who never sees the home) will offer annoyances (this is not legal advice) weighing out the two may be an option that you have as a buyer or seller of real estate in New York. We hope so.

Home buyers, and sellers in the North Fork of Long Island (Riverhead, Calverton, Baiting Hollow, Jamesport, Laurel, Mattituck, Cutchogue, Peconic, Southold, New York)- we’d love to help. Call or email.

Comments (2)

Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate

Correct me if I'm wrong, but I believe New Yorkers pay twice as much in closing costs because they're required to use an attorney? That's what my clients who have moved here, from NY have told me. Most of our closings are done through title companies and no attorneys are involved at all. Or, if an attorney handles the closing INSTEAD of a title company, it's not because the attorney is representing someone. They're just handling the closing. 

As for NY paying double, I was told it was because both the buyer and the seller were required by law to have legal representation. Was I given the correct information? I believe CT is the same. 

Oct 19, 2007 06:16 PM
"Tommy" Decebal
HomeSpector Inc. 516-851-5833 - Farmingdale, NY
Adamescu Long Island NY MASTER Home Inspector
  • Hi I just Wanted to say Hello and To Introduce Myself.
  • I'm Tommy A Certified Home Inspector here in Long Island. 
  • We're neighbors. I'm located in Farmingdale. And you?
  • Can you introduce your company?I would like to meet my neighbors.
  • Thank you,
  • Tommy
  • Oct 24, 2007 06:46 PM