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Fees in real estate transactions: Who pays for what?

Buying or selling real estate is often the biggest transaction someone is a party to in their everyday life. The purchase price may already lead to sticker shock, only for someone to realize there are additional fees to be paid.

What fees can buyers and sellers expect to be responsible for? Below, we break down the categories of fees that tend to come up in New York real estate transactions, and who pays them.

Lender fees

Buyers typically pay any lender fees, such as:

  • Application fees
  • Appraisal costs
  • Underwriting fees
  • Processing fees
  • Loan origination fees
  • Assumption fees

Some buyers may have also heard of paying for “points” on the loan. Buyers pay for points to receive a better interest rate on their loan.

Title and escrow fees

Buyers in New York pay for title search and title insurance fees. Escrow fees cover the process of transferring ownership from the seller to the buyer, and typically run about $2,000. Who pays for these fees depends on the county where the property is located. In some cases, the buyer pays for both title and escrow fees. In others, the seller pays title fees and the buyer pays escrow fees.

Broker fees

Sellers generally pay the real estate broker’s fee, which is often around 5-6% of the purchase price.


Sellers cover the transfer tax as well, which is about 1.825% of the purchase price. Mortgage taxes vary by city and are covered by the buyer.

An attorney experienced in Long Island real estate transactions can help you determine what costs to expect in your real estate deal. 

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