When To Contact A New York Real Estate Attorney

Buying a home in New York may seem like a simple process and, overall, it is quite simple. However, there’s a certain level of complexity to be found in that simplicity, meaning the number of details associated with what is typically such a large transaction is what creates some level of complexity in the simplicity.

In general, here’s what the home buying process looks like:

Step 1: A seller puts a property on the market.

Step 2: Buyers view the property.

Step 3: A buyer makes an offer to purchase. 

Step 4: Upon reaching an agreed-upon price, the buyer usually has the home inspected.

Step 5: Afterward, the seller or seller’s attorney issues a contract of sale to the buyer or buyer’s attorney.

Step 6: Upon agreeing to the negotiated language in the contract of sale, the buyer signs the contract and delivers the down payment to the seller’s attorney to be held in escrow.

Step 7: Once the check clears, the seller signs the contract and delivers a fully executed copy to the buyer.

Step 8: The buyer then orders a title report. Read more about title reports in our recent blog post here. If securing a mortgage, the buyer provides a copy of the contract to his or her lender in the hopes of obtaining a loan.

Step 9: Once the lender approves the title report, the parties are “clear to close.” At this point, the closing date is confirmed.

Step 10: At closing, the buyer brings money to the table and the seller signs over a new deed to the property which the title company then records with the county clerk’s office. Seller hands keys to buyer and buyer is now the proud new owner of the property.

Real estate attorneys usually get involved right around Step 5, so there are three primary parts of the transaction that a real estate attorney helps manage.

CONTRACT

The contract is a document that sets out, in writing, the rights and obligations of both the buyer and seller. It identifies the property being sold, the purchase price, the amount of the down payment, the balance due at closing, approximately when the closing will occur, and that the seller promises to deliver to the buyer a certificate of occupancy for the property. (Certificates of occupancy and compliance will be a whole other blog post.)

While most of the contents of a contract of sale may look like obscure legal language to the layperson, it is the result of decades upon decades of real property transactions and litigation, and is designed to be as comprehensive as possible for the purpose of controlling circumstances most likely to arise in a typical real property transaction. 

TITLE REPORT

In a real estate transaction, buyers often request title reports. We recently wrote about title reports and you can check that out here. These are necessary because it allows the buyer and her attorney to ensure that the seller has the right to sell the property, whether the seller has to satisfy any existing mortgages associated with the property, that there are no liens on the property, that previous owners obtained permits and certificates of compliance for any home improvements, etc.

Without a title report, a buyer runs the risk of taking ownership of a piece of property that, legally, could cause major headaches post-closing.

CLOSING

The closing is where the buyer, seller, lender, attorneys, realtors, and closing agent come together and seal the deal.

Many, many documents are signed by both buyer and seller but what is most important is that (a) the seller signs a piece of paper called a deed that transfers ownership from the seller to the buyer, (b) the buyer brings certified checks to the closing, one of which usually goes to the seller, another of which usually goes to any lenders or banks to satisfy the seller’s existing mortgage or home equity lines of credit, and (c) if the buyer is obtaining a loan, he or she will have about two tons of documents to sign in order to secure the loan.

As mentioned, there are many more details that arise during the course of a real estate transaction, and this is why most sellers and buyers hire attorneys – to help them navigate the process. Of course, a lot of people can read a contract and the contents of a title report. However, the value that attorneys bring to the transaction involve protecting our respective clients in terms of mitigating the risks of what is not just possible, but what is likely to occur in a real property transaction based on prior experiences.

If you’re getting ready to sell or in the market to buy, give us a ring. We love helping our clients with their real estate needs.