Discover New York City Beyond the Tourist Guide
Brooklyn & Manhattan Destination Guide | Sarah Cotty
The Hidden Costs Behind Buying Real Estate in New York City
Most buyers compare purchase price.
Sophisticated buyers compare closing costs.
In NYC, the structure of the deal, new development vs resale, can materially change what you bring to the table.
As a luxury real estate advisor at SERHANT. and featured agent on Seasons 1 and 2 of Netflix’s Owning Manhattan, Sarah Cotty helps buyers navigate the financial and strategic nuances of NYC real estate transactions, from resale negotiations to complex new development purchases.
Here’s the difference.
Transfer Taxes
Resale:
Seller typically pays NYC & NYS transfer taxes.
New Development:
Buyer almost always pays the sponsor’s transfer taxes.
That alone can add:
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~1.4% (NYC)
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0.4% (NYS)
On a $2M purchase, that’s ~$36,000+.
Mansion Tax
Paid by the buyer in both scenarios.
Starts at:
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1% at $1M
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Scales up to 3.9% at $25M+
This is unavoidable, but it’s often underestimated in budgeting.
Sponsor vs Seller Concessions
Resale:
You can negotiate price directly.
Closing costs are predictable.
New Development:
Sponsors rarely reduce price publicly.
Instead, they may offer:
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Closing cost credits
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Transfer tax coverage
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Rate buy-down incentives
On paper, new development looks firm. In practice, incentives can shift the math.
Attorney & Miscellaneous Fees
Both transactions require:
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Real estate attorney
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Bank fees (if financing)
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Title insurance (condos)
But new development often includes:
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Working capital contributions
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First-year common charge advances
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Sponsor document fees
Those line items can add tens of thousands upfront.
Timeline & Carry Costs
Resale:
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60–90 day closing typical
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You close, you own, you move in.
New development:
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Longer timelines
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Construction risk
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Delayed closings
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Mortgage rate fluctuation risk
Time is a cost most buyers ignore.
So Which Is “More Expensive”?
New development typically has higher upfront closing costs.
Resale may require:
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Renovation
-
Competitive bidding
-
Faster decision-making
The better option depends on:
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Your liquidity
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Your appetite for renovation
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Your need for predictability
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Your leverage in negotiation
Price is visible.
Closing structure is strategic.
Before committing to either, the full cost breakdown should be modeled, not guessed.
In New York, the line items matter as much as the purchase price.
📍 Contact: Sarah Cotty at SERHANT
IG: @cottynyc | FB: Sarah Cotty | LinkedIn: Sarah Cotty
X: @cottynyc | YT: @Cottynyc | TikTok: @cottynyc
(917) 207-7590 | [email protected]
