Should I sign the offer or binder agreement that my real estate agent prepared?
A Binder Agreement is the written offer that your real estate agent or broker may ask you to present to the Seller. The Binder is a written offer to purchase a property at a given price. It is usually details what items are included in the property and incorporates mortgage financing. The Binder Agreement is also typically accompanied by a nominal earnest money deposit between $100 and $500.
A Binder can be interpreted as a formal agreement, so it should always be subject to review by an attorney and the execution of a formal contract containing the basic terms of the offer. In addition, if the offer is being made on an existing home, the binder should also be subject to a satisfactory inspection of the dwelling by a licensed engineer.
What Documents Will I Need?
Following Attorney Review you will be asked to provide a number of documents. The closing process with be much smoother if you have these documents ready.
The Deed – This is the legal document, which transferred title to you when you purchased your home. If verifies that you are the rightful owner of your property, describes the legal bounds of your property, and defines the manner in which you may transfer your property to a third party.
The Survey or Survey Certificate (if it is a condominium)- This is the map outlining the legal boundaries of your property and how you home is situated on your property. The recital of your property lines should match those contained in your deed.
Certificate of Occupancy (C.O.) – This is the document which verifies that your home met the requirements of your local building code at the time that it was built. Depending upon the age of your home, you should have a C.O. for each permanent structure on your property. This includes any additions or extensions as well as detached garages, in ground pools, cabanas and certain decks and patios. CO’s are handled by the municipalities. Check with your municipality to determine their requirements and to schedule an inspection as soon as possible.
Condominium Owners– you will be asked to provide contact information for the Homeowner Association so the Buyer can obtain a copy of the bylaws, financial statements, insurance information and a Closing Statement that will confirm when monthly maintenance is paid through, as well as any move in/out fees.
Mortgage and Note – In a high interest rate environment, a mortgage which may be assumed by a purchaser is a valuable asset. If your mortgage is not assumable, it will have to be satisfied at closing. A copy of your last mortgage statement will assist your attorney to obtain payoff figures to satisfy any outstanding mortgages or other obligations.
Tax / Utility Bills – Although these are not critical, an informed buyer may ask about the real estate taxes and fuel charges.
What are my expected closing costs?
- Payoff existing mortgage.
- Real estate commission for the services of the real estate broker
- Attorney’s fees.
Realty Transfer Fee: NY State requires that the seller pay a realty transfer fee when property is transferred in NY. The fee is $2 for every $500 of the selling price. The fee for a home worth $300,000 would be $1,200. New York City also requires the seller to pay a realty transfer fee. The New York City Real Property Transfer tax (RPT) is usually 1% of the sale price for sales less than $500,000.