How Do I Actually Buy a Home? What is the Procedure? Things to Know Before You Call a Lawyer.
If you're a first-time buyer of real estate, after you locate the property and submit an "offer" and the offer is "accepted" by the seller, you have entered into a "Real Estate Purchase Contract" in New York State. If you used a realtor, they used a contract approved by an attorney.
Real estate purchaseThe procedure involved in buying a home. Good Title: When you buy a new home, you want to make sure that the seller has satisfied all of his or her obligations, such as paying off the mortgage and all tax liens, so as to deliver "clear title." Clear title means that there are no outstanding claims against the property when the title transfers to you. Suppose, for example, that the seller has a personal judgment, unrelated to the real estate, against him for losing a lawsuit years ago? Well, in New York State, a properly filed judgment becomes a lien against all real property that person owns in that county. If you were to purchase that property without resolving that judgment, the judgment creditor can then come after you and your real estate to collect! In New York State, an attorney is required to oversee and conduct the real estate transfer, commonly referred to as a "closing." After first reviewing the sales contract, a lawyer orders a "title search" that scours the legal chain of title to uncover all claims against the seller and the property. The lawyer collects and assembles all tax bills from the municipalities, including county, town, village, and school taxes. Since tax bills are based on different periods, the closing date determines pro rata who pays which part of the tax bill. For pre-paid bills, the seller would be credited for the taxes paid up until the date of closing, and the buyer would be responsible for taxes from the date of closing and thereafter. The lawyer then apportions the dollar amounts to each party. Survey: A survey is a document that states the exact boundary of a parcel of real estate. It tells you where your property ends and your neighbor's property begins - on all sides of the property. This is not an exact science and frequently one surveyor may differ with another over the exact boundary of adjacent properties, thus giving rise to "boundary disputes." Ownership of property is an inherent right, so it may seem, and arguments can ensue over feet or even inches of land. Absent such disputes, however, a survey adds certainty to the property you are buying. A lawyer reads the survey and compares it to the "legal description," which describes the property's boundary in legalese. "Beginning at a point 20 feet from one point, continuing eastward 120 feet to a point..." And so it begins describing the lines outlining your coveted piece of real estate, until encapsulates by returning to the point of beginning. Deed: The Deed is the tangible evidence, a piece of paper, properly recorded in the chain of title in the county clerk's office, that represents your legal ownership of real property. It legally defines the property transaction from one owner to the next. "WITNESS, that the party of the first part (the seller), in consideration of lawful money, does hereby grant and release unto the party of the second part (the buyer)..." And so the legal jargon of centuries ago continues today. Closing: The real estate "closing" is where and when the actual transfer from one property owner to the next occurs. Though sometimes in lawyers' offices, the real estate closing usually takes place in the county clerk's office, where documents are exchanged and"filed" with the county clerk. Gathered that day at one of the many conference tables, sellers, buyers, lenders and their attorneys congregate for one purpose - to exchange title. Title companies are situated in their nearby cubicles, ready to "update title" all the way up to the magic moment of title transfer to ensure that nobody slips in the last minute to claim an interest in the subject property. You want your title to be "clear." Closing Statement: The Closing Statement is a summary of the real estate transaction. It identifies the parties and summarizes all the costs each party must pay. The seller, for example, pays for the survey. This makes sense, because the seller is responsible for proving that she is delivering good and clear title. Then, the taxes are pro-rated and apportioned. The closing statement identifies who pays which filing fees, transfer tax and mortgage tax. For more information on this subject, or to ask questions about a particular matter, please contact us to speak with an Attorney: Konst Law Offices: 5511 Broadway Lancaster, NY 14086 Website: www.KonstLawOffices.com Telephone: (716) 601-1000 Email: [email protected]
Your first homeGetting familiar with the legalities.