FAQ for Homebuyers in New York

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 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.

Should I get the property inspected?

The only inspection usually required by a lender is a termite or wood destroying insect inspection. Most lenders will require an “Infestation Certificate” showing that there is no visible evidence of infestation in the home. You must provide this certificate to the lender before they will clear your file for closing.

However since you are buying the property “As Is” it is a good idea to have a structural inspection performed by a licensed inspector or engineer. The inspection will give you the opportunity to accompany the inspector around the property and learn recommended maintenance for your new home. In addition, you may be able to negotiation a discount in the purchase price for some defects found during the home inspection.

Depending on the age and condition of your building, you may choose to get inspections in the following areas: radon, septic, well, home heating oil tank, asbestos, mold, stucco and/or lead paint.

You will generally have between 10-14 days to get the inspection done and submit the results to the Seller’s attorney. You should schedule an appointment with an inspector immediately following attorney review. Any defects will be submitted by your attorney for the Seller’s attorney to address, usually with a credit at closing or a repair of the defect.

This is an out of pocket expense that you pay directly to the inspector. You will work with your real estate broker and the seller to coordinate this.

When should the Contract be signed?

Once an offer has been accepted and an inspection has been completed the Seller’s attorney will draft the Contract. The attorneys will review the technical aspects of the contract with their clients and negotiate terms on their behalf. Be sure that you understand your obligations under the contract before you sign. Once you are prepared to sign, the down payment negotiated in the contract will be due.

What is a title search?

A title search is a search conducted by licensed agency to find any judgments against the parties, show any unpaid tax liens and provide a copy of the recorded deed and mortgage for the Seller. It is conducted to make sure that the Seller can provide clear title to the property to the new Buyers. Our law firm will order the title search after attorney review is complete. It takes approximately two weeks for the title search to be completed. When title is received, it is reviewed by our office for defects, and then submitted to your lender. Your lender needs to approve the title before they will clear you to close. Once you close, you will have insured title to the property even though the actual title insurance policy will not be issued for many months after the closing.

What is title insurance?

Title insurance is an insurance policy that covers your ownership interest and the mortgage interest of your lender. You will be required to purchase title insurance for your property by your lender. Title is ordered from an independent title company. Title insurance prices are state regulated, so that the cost of title insurance does not change from company to company. We charge you the amount that is charged to us by the title company.

Who orders the survey and why do we need a survey?

The survey is a like a map that shows the placement of the dwelling relative to the perimeter of the property lines. Our law firm will order the survey together with the title search once attorney review is complete. Almost all lenders require that a survey be drawn and submitted to them for approval, prior to closing. In some cases the lender will accept an existing survey if it is not too old and if the Seller can give an Affidavit saying that there have been no changes to the property since the date of the survey. If an existing survey is available, and you wish to rely upon it, you must let us know so that we do not order a new survey for you. Title insurance, title searches and the survey costs are paid at closing.

Do I need an appraisal?

The appraisal determines the market value for the property you are purchasing. It is ordered by the lender and generally the buyer is charged a fee by the lender for the appraisal. The appraisal is not provided to us in advance, and usually is not available at the closing. Most lenders require that you send them a letter within 90 days after the closing in order to receive a copy of the written appraisal.

What do I need to bring to the closing?

At the closing you will need to bring a certified check, bank check, or cashier’s check. You will be provided with the exact amount of the check as soon as the numbers are available to us.

In addition, you should bring proof of homeowner’s insurance (declaration page and one year paid receipt). It is also a good idea to bring a few personal checks in the unlikely event minor adjustments need to made between the parties at closing.

If you are married, bring your spouse, or if you purchased the home with a partner, you must both be present at the closing.

Who will be at the closing?

The closing will be attended by the purchasers, sellers, their attorneys, the lenders attorney, a representative for the title company and the real estate brokers.

Where will the closing be held?

It is custom in New York, and most Contracts provide, that the closing will occur at the office of the Buyer’s attorney. If you are buying new construction, the closing will most likely occur at the office of the builder’s attorney.

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FAQ for Sellers in New York

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.

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