Closing costs in NYC include more than lender fees and taxes. They also include prorations, which adjust expenses so buyers and sellers each pay only for the time they own the property. These adjustments often confuse first time buyers and sellers, especially in cooperatives and condos.

Here’s how prorations actually work.

What Gets Prorated at Closing

Common prorations include:

• Property taxes

• Water and sewer charges

• Condo common charges

• Coop maintenance fees

• Fuel oil in oil heated homes

The seller typically credits the buyer for any prepaid expenses beyond the closing date.

How the Math Works

Prorations are calculated to the day of closing. If taxes or maintenance are paid in advance, the seller gives the buyer a credit. If they are unpaid, the buyer may reimburse the seller for their portion. This ensures neither party overpays.

In NYC, tax billing cycles and coop payment schedules make prorations more complex than in suburban markets.

Common Proration Issues

• Incorrect tax bill assumptions

• Coop statements that change mid cycle

• Delayed water bill updates

• Closing dates shifting at the last minute

Reviewing prorations carefully prevents disputes after closing.

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Joseph Ranola | Five-Star Staten Island & South Brooklyn Realtor® (30 + Google reviews)
Associate Broker · Matias Real Estate | Founder · Bridge & Boro Team
Serving 103xx and 11209 / 11214 / 11228 | $25 M + closed volume
📞 917-716-1496 | ranolarealestate.com