If you are buying or selling your home, we are the office to call. Our rates our competitive and we have years of experience in closings.
We recommend that you use the services of a professional Realtor to sell your home. A realtor, aside from advertising and showing your home, will be able to qualify your buyer. A buyer should have sold their home or at least be in contract to sell their home and have sufficient credit and assets to qualify for a mortgage in these post-subprime times. Once a buyer has been located and a price has been agreed upon, the Realtor will memorialize the terms of the transaction in a one-page document called a “Binder”. While a Binder is of no particular legal effect, it does set forth some of the more important terms that will go into the contract such as the purchase price, the down payment amount, the mortgage amount, the date of closing and what personal property may be included with the deal. If you are a seller, you should be prepared to provide us with documents that you might have received when you purchased your home. Should you not be able to locate these documents, don’t worry. Try to at least provide us with a recent tax bill, which will give us enough property information to use in the contract.
Once the attorneys have the binder and the other information provided by the Seller, a contract is prepared. The Seller’s attorney usually does this. The contract is normally done on a preprinted contract form and then the attorney adds his or her own language to protect the client in an addition to the contract called the “Rider”. The attorneys for both sides will talk at this time and discuss the terms that will go into the contract so that most terms are agreed to when the contract is completed. The contract is then sent to buyer’s attorney.
At this point, the buyer’s attorney will have the client(s) in to review the contracts. If they meet the satisfaction of the buyers and their attorney, the contracts and the rider will be signed and this package will be returned to the Seller’s attorney along with a check for the down payment.
Once the Seller’s attorney receives the signed contracts, they will have their clients come in to review the contracts. If everybody agrees with the terms in the contract and any proposed changes, the Sellers sign the contracts and they are dated and returned to the Buyer’s attorney. The contract is now said to be fully executed.
The down payment is normally held in the Seller’s attorney’s Attorney Trust Account “in escrow”. This money is not the property of the attorney or the Seller at this time. The Attorney is acting as an escrow agent. Any interest that is earned on the deposit of the down payment goes to the State of New York IOLA Fund, The New York State Interest on Lawyer Account Fund ("IOLA") helps low income people in New York State obtain help with civil legal problems affecting their most basic needs, such as food, shelter, jobs and access to health care.
The mortgage is the money the bank lends to assist the buyer to purchase the house. There are many types of loans such as conventional loans and non-conventional loans, interest only loans, adjustable rate-mortgages and fixed rate jumbo mortgages. You should contact your bank’s mortgage department or a qualified, licensed mortgage broker to learn more about your mortgage options.
Generally, the contract will have what is called a mortgage contingency. This basically refers to a period of time during which the buyer should obtain his or her mortgage. Should the buyers be unable to qualify for a mortgage during this time period after making diligent applications, they may be entitled to the return of their down payment. The contract may be determined to be of no further force and the parties can return to their pre-contract status. A typical mortgage contingency period is 45 days.
The Title Report
Shortly after the contract is fully executed, the buyer’s attorney will contact a title company or abstract company, a company that acts as an agent for a title insurance company, to purchase title insurance. Title insurance is an insurance policy with a one-time premium that is paid at closing. This coverage insures the buyer and the bank from claims that may be made from other individuals or businesses that claim to have a lien or other ownership interest in the property. As part of the title insurance underwriting process, the title insurance company will perform a title search, which is an exhaustive search with the town’s Courts and other record keeping departments to determine whether there are mortgages, liens, judgments or open permits on the property. I most instances, these mortgages, liens and judgments must be satisfied at the closing and open permits must be dealt with.
Once the mortgage has been obtained, the title report will be forwarded to the bank’s attorneys for review. When the bank’s attorneys are satisfied that the bank’s requirements have been met, they will contact one of the other parties to inform them that the title is ready to “close”. This basically means it is time for all of the players to come to the table and complete the transaction!
At the closing, there are indeed a lot of players. Usually the buyers and sellers are there. Their attorneys should likewise be there. A bank attorney will sit at one end of the table and convey the many bank documents to the buyer’s attorney to have reviewed and signed by the buyers. At the other end usually sits the Title Closer, the person who is there on behalf of the title company to prepare the bills, mark-up the title and make sure mortgages and other liens are dealt with. Since the title closer is usually, although not always, free-lancing, it is customary for the buyers to “tip” the title closer $100 or so, however, this is completely discretionary.
Also present may be the mortgage broker to answer any last minute concerns regarding the mortgage rate. The Realtors will generally be present to make sure their commissions are paid.
The mood is generally upbeat. The sellers are happy to be moving on with their lives and collecting money and the buyers are thrilled to be buying their new home. However, this is not always the case. Issues will sometimes arise at the closing regarding the condition of the home. Since the buyers will have done a walk-through prior to closing, they may have discovered a leaky faucet, a broken window or a collapsed section of roof that wasn’t there when they first saw the house months before. Attorneys must be prepared to help their clients negotiate a quick and fair settlement of these issues or the room may suddenly become very uncomfortable. I generally prefer to leave the room with my clients to prepare them to discuss how they wish to resolve these conflicts, so that they don’t start arguing with the other side. Nobody wants to walk away from the closing table with the closing heading south!
If you are buying or selling a home, please call us toll free at 1-800 427-8071. We will be happy to ask you some questions and to quote you a fee. We want to make you feel right at home.
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