I met with the sweetest young couple today. They had just put in an offer on a house, and were brand spanking new to the real estate purchasing process. My conversation with them inspired me write a post about the process of buying real estate in general. I will answer specific questions they had, and others that I hear frequently in upcoming posts.
(Here, I have to do my lawyerly duty and tell you that nothing in this post should be construed as legal advice. (If you need legal advice, please consult a lawyer about your particular case).
Ok- so as my clients today discovered, buying real estate in New York State is a lengthy and sometimes confusing process. Even within our great Empire State, the process can vary by geographic region. I am most familiar with the Central New York process, so I will focus on how things work here in this post. Real Estate Lawyers practicing out of New York City who read this post will be totally confused, as they do things very differently in "The City." As you might already have guessed, the key to a successful real estate transaction is to find an attorney who practices real estate law in the area where the property is located and take advantage of her expertise.
In CNY, the process generally goes something like this:
(1) Buyer finds a property they love;
(2) Buyer, Buyer's Real Estate Agent or Buyer's Attorney writes up contract that contains Buyer's offer, which Buyer signs;
(3) Buyer's offer is submitted to the Seller;
(4) Seller (hopefully) accepts the offer, signs the offer and it becomes a binding Contract to Purchase;
(5) Buyer and Seller hire attorneys (if they haven't already), and the attorneys have an opportunity to "disapprove" the Contract to Purchase;
(6) If the Attorneys don't disapprove the Contract to Purchase, we have a deal! (almost);
(7) Buyer hires a Home Inspector to conduct an inspection and radon test;
(8) If the inspection and radon test are satisfactory, then we have a deal! (almost);
(9) Buyer applies for a mortgage commitment from Buyer's Lender;
(10) Buyer's Lender sends an Appraiser to the property to make sure the property is worth what Buyer offered to pay for it;
(11) If the appraisal is satisfactory to Buyer's Lender, it issues a Mortgage Commitment to the Buyer and we have a deal! (almost);
(12) Seller's Attorney prepares the title documents, which include an updated Title Abstract, Tax Searches and Survey and sends them to the Buyer's Attorney;
(13) Any problems with title that are shown on the Title Abstract, or unpaid taxes or encumbrances on the Survey are addressed by the Buyer's Attorney with the Seller's Attorney. If the Seller's Attorney can fix the problems (provide "title curatives"), then we have a deal! (almost);
(14) Buyer's Attorney obtains a quote for Title Insurance to protect the Buyer's Lender against any claims on title (other people claiming they actually own the property) that might arise during the time that the Buyer is still paying off the mortgage (this is paid for by the Buyer and is always required when financing a purchase with a commercial lender), if the Title Insurance Company will issue a Title Policy, then we have a deal! (almost);
(15) Buyer's Attorney sends the Title documents and Title Insurance Policy to the Lender's Attorney for review. If the Lender's Attorney is satisfied with this so-called "title package", then we have a deal! (almost);
(16) Lender's Attorney will issue a "clear to close." This is the go-ahead to schedule the closing. If all parties can agree upon a closing date and time, then we have a deal! (almost);
(17) CLOSING DAY!!! If all parties attend the closing, the right amount of money changes hands, and the Seller provides a signed Deed to the Buyer THEN WE HAVE A DEAL!! The property officially belongs to the Buyer at this point, and we are "closed."
As I mentioned earlier, this process is complicated, and I did actually leave quite a bit out because I am not writing a novel here, people! I will flesh out each step in the process in future posts. I think you get the message, though- this is a long, stressful process, that while worth it in the end, can be tough to navigate on your own. So, the lesson here is - get the help of professionals who know how to navigate this labyrinth. It doesn't have to be the Wolfenden Law Firm- if you have a family attorney, or some other attorney you trust, HIRE THEM!! Just don't try to go it alone- there is far too much at stake, and their expertise will be worth the fee ten times over.
I would love to hear your stories about buying property in CNY- was it like I described? Or, am I completely off base? Leave a comment and let me know!