Real Estate (Sale & Purchase of House, Land, Condo or Coop)
In Westchester, Putnam and Dutchess county, New York, the sale or purchase of any piece of real estate pretty much necessitates that all parties (seller or buyer) be represented by an attorney. No provision of law requires that either party be represented but in local practice it is nearly impossible to complete the transaction without a lawyer.
In other parts of the US bank officials may complete real estate closings. Locally however, most of the initial paperwork, most particularly including the real estate contract itself, is produced by the attorneys for the parties. Absent an attorney familiar with local practice and the contracts used there is no one else to produce that paperwork.
Sales of houses, condos, coop apartments, or commercial properties are similar to one another. Legally, a coop is not real estate. All of the other types of property are real estate. A coop is a right to occupy an apartment pursuant to a proprietary lease accompanied by the ownership of shares of stock in a coopertive corporation allocated to the apartment.
Nonetheless, many of the steps for completing a sale of purchase of all these types of property are much the same. Each transaction starts with the attorney for the selling party. Upon being advised that there is an accepted offer for a piece of property the seller's attorney drafts a contract for the sale and sends it to the attorney for the buyer.
A real estate broker is involved in a large majority of sales. Where there is a broker much of the information which goes into the contract, such as the sale price, financing terms (if any), names and addresses of the parties and their attorneys, is provided by the broker. If there is no broker, the seller's attorney must get as much information as possible from his selling client.
Upon receipt of the contracts from seller's attorney the buyer's attorney reviews the contracts with his clients. Buyer's attorney will then communicate any concerns and any propsed changes he may request in the contract terms to the seller's attorney. This is frequently done by telephone, but can also be accomplished in writing.
Once the attorneys for both parties have agreed upon the final language in the contract the buyer's attorney has his clients sign the contracts, usually in triplicate, and sends them back to the seller's attorney with a check to the seller's attorney for the agreed upon downpayment (usually 10%). The seller's attorney will have his clients sign the contracts and return usually two original signature-bearing copies to the buyer's attorney.
Seller's attorney will also deposit the downpayment funds in his escrow account. An escrow account is a bank account in the name of the seller's attorney which is separate from any business or personal funds of that attorney. The escrow funds are held pursuant to the terms of the contract normally until actual closing, when they are turned over to the seller.
Legally there is no binding obligation on any party's part until that party signs the contracts. There is no enforceable obligation of the seller to sell until the sellers sign and return the signed contracts to the buyer's attorney. All this signing and moving contracts about usually takes a few weeks to complete.
Only when the buyer has the fully signed contracts back can the buyer complete the buyer's application process for a mortgage. If the transaction is a cash sale the financing step is skipped. However, most transactions do involve a mortgage.
One of the featured clauses of the real estate contract is a protective provision for the buyer called the "mortgage contingency" clause. It allows the buyer a specified period of time, usually a month or so, within which to complete the mortgage application process and obtain from a lender a "commitment letter" obligating the lender to provide a mortgage to finance the purchase. The mortgage contingency clause alllows the buyer to get out of the contract and have the downpayment refunded if the buyer is unable after diligent effort to obtain the necessary financing.
The vast majority of buyers do obtain financing. But it does usually take 4 to 6 weeks. The buyer's attorney must then order a title report from a title insurance company. The title report lists impediments to title, meaning anything that would prevent the buyer from obtaining clear title to the property. There may be easements or restrictions on the use of the property of which the buyer need be aware.
There may be liens against the property which must be paid upon any transfer of title. Either party to the transaction may have personal judgments against them, or tax liens. There may be liens for property taxes, or with condos or coops may have back due common charges. All of these items must be reviewed by the attorneys and arrangements made to pay them either before the closing or out of the proceeds of the closing.
Once all of this is taken care of the parties are ready to close. A closing date and time must be set up mutually agreeable to seller and their counsel, buyer and their counsel, attorney for lending bank (if any), and a title company closer. In coops and condos there will also be an attorney for the coop or condo. In any sale that involves a mortgage the place of closing is normally the offices of the lending bank's attorney.
Many a buyer or seller think that once they have agreed on a price they should be able to close in a few weeks. As one can see from the steps described above the complete process, certainly if it involves obtaining mortgage financing, rarely takes less than 90 days from accepted offer to closing. Even a cash deal is nearly impossible to close in less than a month or so.
Personal Service in Westchester, Putnam & Southern Dutchess County, New York