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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 90434
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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hi we are selling our condo in brooklyn ny and will probably

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hi we are selling our condo in brooklyn ny and will probably rent and put the money in the bank. i didnt pay much attention when we bought this place and im not very knowledgeable about real estate. the facts are: we bought our place is 2008 for 489,000. i think we had a 6.5% interest rate then refi'd for 4.5. this is from our most recent statement
type: fixed rate
principal bal-417,515.72
intrst rate- 4.5
escrow balance- 494.84
interest ytd- 7860.52
taxes paid ytd- 42.06
we have a tax abatement for 25 yrs.
my questions are, if we sell our place for 650,000 (yes they are saying we can sell in our area fir that price), what is our profit? what are the expenses like closing and transfer etc.

will this money actually be ours or do we have to "pay back the loan" to the bank and we get the remainder. im so confused.
Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

When you sell any real property with a mortgage on the property, the first thing that must be paid back is the mortgage balance before you get any proceeds from the sale. Thus, if you sell for $650K and you owe approximately $417,500, then your take would be approximately $232,500. In addition to that amount, any overage in escrow which has to be determined after closing would be paid back to you.

As far as closing costs (including transfers and agent fees etc.), these vary with the terms of each sale and can be negotiated to be paid by either the buyer or seller or shared and this is something you and your real estate agent would have to negotiate into the sale contract (so we cannot tell you accurately what closing costs would be as they vary). Here is a general average of what NY closing costs would be in a NY Co-op/Condo sale:

Real Estate Broker
    6% (varies)
Seller’s Attorney
    $1750 and up
Condo Attorney or Managing Agent
    $500 - $750
Flip Tax
    1%-3% of purchase price
Stock Transfer Tax
    $.05 per share
Move-Out Deposit
    $500 - $1,000 (usually refundable if no damage)
NYC Transfer Tax
    1% of purchase price if purchase price is $500,000 or less; 1.425% of purchase price if purchase price is over $500,000
NYS Transfer Tax
    .4% ($2 per $500) of gross purchase price
Payoff Bank Attorney
    $450 and up
UCC Fling Fees
    $75-$150
Once your final amount is calculated which would end up roughly at maybe $225,000, then you have to look at what you actually purchased the condo for when you first bought it to determine if the profits are capital gains, meaning you sold the condo for more than you put into buying it and capital improvements on it. Anything you make on this sale above what you originally paid plus capital improvements would be considered capital gains profits and would be taxed at the capital gains rate which would be anywhere from 15% to 35%, depending on your tax situation and your tax preparer would have to look at everything to see what he can reduce or adjust to minimize that tax for you.


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Customer: replied 1 year ago.

thanks for all the info. im better understanding now. although i was told that our transfer tax would be 1.825. you have ny transfer tax twice- are these 2 separate taxes we have to pay?


 


so if we got 596k for example after all the fees and we owe the bank 417,5, we would have a profit of 178,485?

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response. There is a NY State transfer tax and if you are in NYC there is a separate NYC transfer tax.

If you use the estimated closing costs above, you are approximately in the right ballpark if the buyer does not agree to pay some or all of the closing costs, which is generally something agreed upon and negotiated as part of the sale.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 90434
Experience: JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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