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REAL ESTATE CLOSING LAWYER IN NEW YORK

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REAL ESTATE CLOSING LAWYER IN NEW YORK

Property deals are typically stressful and long exercises that involve a number of procedural formalities and steps. Closing happens when documentation is signed to make the property yours. However, before that day comes, several things need to happen. The following article will go over a dozen steps that need to be taken once acceptance of the offer ensues. Each of them must be done before house keys are placed in your hand. Hiring a real estate closing lawyer is a good way to ensure everything is taken care of.

MAIN TAKEAWAYS

  • Property deals are usually finalized over the span of several weeks. They typically come with a number of moving parts.
  • A deal begins with the opening-up of a designated escrow account. It will end with one last walk-through ahead of any signatures being made.
  • The intricacy of property closings is what makes many people choose to utilize the services of a lawyer. Experienced attorneys can navigate you through this entire process.
  • Pre-approved mortgage buyers generally have the ability to close much sooner.

What Makes Mortgage Pre-Approval Worthwhile?

Unless you’re paying for a house with cash, it would be prudent to receive pre-approval for your mortgage well before you begin house hunting. Although pre-approval isn’t a requirement for closing a deal, many sellers will expect the buyer to already have some kind of pre-approval document. Pre-approval letters expedite the process and provide the buyer with bargaining power during negotiations. It tells sellers that the financial backing you have is strong. It also provides you with a “rate lock,” meaning that you will be more inclined to secure an interest rate that is favorable.

Getting mortgage pre-approval also tells you what your limits are, as far as purchasing property is concerned. A lot of effort and time is saved with mortgage pre-approval, as you’ll be able to search for properties that fit within your budget.

Lastly, being pre-approved for a mortgage will give you time to properly respond to potential discrimination. If you think that a lender made a decision with discrimination, you will have the option to seek funding from another source. Legal action can be perceived later on, if desired. Receiving pre-approval will prevent biased lenders from tarnishing a quality deal. They shouldn’t have to delay your plans.

It is illegal to make mortgage lending decisions with discrimination. If you believe that you were discriminated against because of your age, disability, national origin, public assistance use, marital status, sex, religion, or race, there are steps that can be taken. One of them includes filing an official report either with the HUD (US Department of Housing and Urban Development) or the CFPB (Consumer Financial Protection Bureau).

Once you set your sights on the home of your dreams, and someone has accepted the offer you have made, here is what you will need to do in order to finalize the deal.

Closing Involves the Following Steps

Open up a Private Escrow Account

Escrow accounts are held by independent parties representing both the seller and the buyer. The sale of the home will involve several steps that are taken over the course of several weeks. As such, the best approach to preventing either the buyer or the seller from getting cheated out of the deal is to involve a neutral, independent party. This party will be the one holding onto all money and documentation involved with this transaction. They will continue to do so until all matters have been properly settled. Once procedural formalities have been concluded, both the documentation and funds will be transferred to the buyer and seller from that escrow account. A completely secure transaction is therefore guaranteed.

Title Insurance and Title Search

Title insurance and title search each provide buyers with legal protection and contentment. When a property is purchased, these two things prevent people from making claims to it later on. Title searches are essentially public record examinations. Their purpose is to establish and confirm legal ownership of a property. If any claims are involved, they will be brought to light. Such claims will require resolution before a buyer can move into the property.

On the other hand, title insurance can be described as indemnity protection for a holder from any financial losses that may come about from property title defects. It safeguards both lenders and property owners against damages or losses that stem from title defects, liens, or encumbrances.

Hire a Real Estate Closing Lawyer

Although receiving legal aid isn’t mandatory, getting a legal opinion is recommended. a real estate closing lawyer can go over the closing documents to determine if there is anything you need to be mindful of. Sometimes documentation contains complicated jargon, making them troublesome to understand, no matter how educated an individual may be. For a reasonable fee, the opinions of an experienced attorney can isolate any problems contained in the documentation that could be a detriment to you.

In several states, hiring a real estate closing lawyer might be mandatory – particularly when it comes to handling the closing aspects of a deal. Be sure to review the laws in your state. New York State does require an attorney for the purchase or sale of real property, and the closing.

Closing Costs Negotiations

Whether escrow accounts are being opened up or you are hiring a real estate closing lawyer, all entities and services involved will cost money. Such expenses can accumulate into hefty liabilities if you don’t stay on top of them. For example, pest and home inspections are essential. The last thing you want to buy is a home with hidden (read: expensive) issues. With that said, some service providers charge high fees, especially if they feel that they can capitalize on the ignorance of a consumer. Sometimes even the fees that come with closing services may be inflated.

A junk fee is a charge imposed by a lender when a mortgage closes. The borrower usually doesn’t expect to be hit with junk fees, and the lender doesn’t always explain what they entail very clearly. Such fees can end up becoming costly. Junk fees may be comprised of expenses for settlements, processing costs, ancillary reasons, appraisal reviews, applications, or administrative needs.

If you do not stand up for yourself, then you could find yourself charged with junk fees, among other expenses. Bring up the fees in order to eliminate or reduce them before closing is finalized.

Home Inspection Completion

Physical home inspections will be an essential step in order to isolate potential issues with the house, as well as to get a better look around it. If serious issues are discovered with the house during the home inspection, then you’ll be able to walk away from the deal. Alternatively, you can ask a seller to compensate you for the repairs necessary. The seller can also be asked to fix the problems on their own. There must be a contingency for home inspections in the purchase offer.

Pest Inspection Completion

Pest inspections are not the same things as home inspections. They involve experts who check to see if a home has any insects living inside of it that are capable of destroying wood (for instance, carpenter ants and termites). Pests can wreak havoc on a house if they are mostly made of wooden materials. Elimination of pest issues is mandated by a lot of mortgage companies before a deal can be closed.

Small infestations are capable of spreading. It doesn’t take long for them to turn into expensive and destructive messes. If possible, ask a seller to either eliminate the pests or pay you for the job before the purchase is completed. Pest inspections happen to be legally mandated in several states. In others, they are only optional.

Offer Renegotiations

Once the purchase offer is accepted, consider having the price renegotiated. The updated price should be reflective of repair costs, as chronicled on inspection reports. Alternatively, your purchase price can be kept as is, but you can encourage a seller to cover the costs of repairs. If you happen to be buying the house in the condition it is currently in, it couldn’t hurt you to ask. If major problems are discovered, and the seller isn’t willing to fix them or come to some sort of a compromise with you, you’ll have the ability to back out of the deal without penalty.

Locking in Interest Rates

Interest rates – which includes the ones that are provided with a mortgage – are subject to changes and are known for being volatile. Multiple factors can influence rates, including the credit score of an applicant, the kind of loan that was applied for, the type of property involved, and even the geographic location.

When feasible, try to get in interest rate locked in for a loan ahead of time. Doing so will keep you protected from market fluctuations – ones that could cause rate increases before the property purchase is finalized. Even a rate hike of 0.25% can increase the number of payments you make each month. It can also affect the duration necessary to have the mortgage repaid.

Contingency Removal

The property offer must be contingent on the following:

  • Getting financing at interest rates that do not exceed your budget.
  • A home inspection report that doesn’t isolate significant issues with the house.
  • A seller that fully discloses any known problems with the house.
  • A pest inspection report that isolates any significant damages or infestations to/in the house.
  • A seller following through on any repairs that were agreed upon.

These contingencies need to be handled by a specific date in writing, as stated in the purchase offer. This process is called “active approval.” With that said, several purchase agreements come with contingencies that are subjected to what is known as “passive approval” (a.k.a. constructive approval). They will be regarded as approved unless you protest them within a specific timeframe. Buyers need to be familiar with the entire approval process, as well as take any actions necessary by the specified dates.

Meet Financing Requirements

Ernest money is likely what you deposited when your purchase agreement was signed. Earnest money can be described as a deposit that was made to the seller as an indication of good faith on their part. Earnest money serves as an expression of genuine interest and seriousness about the transaction. In the event that a buyer ops out of the deal, then the seller will be compensated with an earnest amount. If a seller were to back out, then the buyer will receive their money back.

To finalize the purchase, you will need to deposit extra funds into the escrow account. The earnest money will be applied directly to a down payment. As such, it is important to make arrangements for other necessary payments before closing of the deal commences. If this is not done, cancellation of the deal may ensue. The seller will end up with those earnest funds. You might also be charged if certain services were used prior to the deal falling apart.

One Last Walk-Through

The last step involved with the process before closing papers are signed is the final walk-through. You must ensure that no further damages have transpired ever since the most recent home inspection. You’ll need to make sure that all required fixtures have been completed by the seller. You also need to make sure that no new issues have arisen. Lastly, take a look to see if anything part of the house’s purchasing agreement was taken away.

Closing can last anywhere between one week to two months based on the type of property involved, and how the purchase is being financed.

Understanding the Documentation

Documentation is essential when it comes to property deal closings. There are piles of paperwork filled with complicated legal jargon and terms, but each paper needs to be reviewed with a fine-tooth comb. If there is something that you do not understand, speak to a real estate closing lawyer about it. The agent can also help you clarify any legal language that is going over your head.

You might feel pressured into making a decision by others involved with the deal, some of which may encourage you – selfishly – to sign paperwork sooner than later. A mortgage lender or notary may even try to rush you. Regardless, every page needs to be carefully read. Fine print is capable of having significant effects that can last for a while.

Verify that you have the correct interest rate, and that other terms that were agreed upon are mentioned clearly. You should also contrast the closing costs directly to the estimate that was made in good faith (which you were issued once the process began). If there are any fees that you believe are not legitimate, vigorously dispute them.

In Closing

While it does come across as a complex process, everything involved with closing is worthwhile. You need to make sure that things are as they should be from the get-go. Rushing through a deal that you don’t completely understand is highly discouraged. If somebody is pressuring you to hurry up and close a deal, red flags should be going off in your head. Various entities – including realtors – want their share of the deal, and if something negative were to happen later on for you, these individuals will be long gone by then.

WE PROVIDE THE FOLLOWING SERVICES:

  • Review and draft property sale agreements.
  • Review title reports.
  • Review records of building departments.
  • Review building plans and surveys.
  • Review offering plans.
  • Review outstanding violations issued by the Department Of Housing, Prevention, and Development.
  • Acquire New York-based residential property.
  • Review property structure legalities.
  • Check to see if any municipal violations, ECBs, liens, judgments, franchise taxes, real estate taxes, or unpaid water taxes are involved.
  • Property refinancing.
  • Mortgage assignments.
  • Power of Attorney (particularly for property transactions).
  • Rate modifications.
  • Deed transfers.
  • Lien and title search review.
  • Builders mortgages.
  • Equity lines.
  • Private lending.
  • Representation of institutional lenders.
  • Offering plan drafting.
  • Free estimates for closing costs.
  • Title insurance purchase and claims.
  • Contract assignments.
  • Dismissal of mortgages and liens.
  • Enforcement of sale rights contracts.

Get in touch with Rozhik Law Firm PLLC today. Our professional real estate closing lawyers are ready to take care of the house’s closing process on your behalf.

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ATTORNEY ADVERTISING. Information presented on this site should NOT be construed to be formal legal advice nor the formation of a lawyer or attorney client relationship. Using the advice provided on this site without consulting a lawyer can have disastrous results. Prior results do not guarantee similar outcomes. This web site is not intended to solicit clients for matters outside of the State of New York, although we have relationships with attorneys and law firms in states throughout the United States.