When You Purchase or Sell Your Real Estate, You Are Transferring Title - Called "The Closing"- New York Attorney Harry N. Konst, Esq.
Property rights and ownership are two most coveted rights. The transfer of real property in New York State from one owner to another is designed to bring order, and it is described as "delivering good title" to the purchaser.
When you buy a new home, you want to make sure that the seller has satisfied all their 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? 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 his 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 process, commonly referred to as a "closing." The first step is reviewing the sales contract and to ensure that all conditionsare satisfied.
Next, the lawyer orders the "title search" that scours the legal chain of title to uncover the history and claims against the seller and the property.
The lawyer collects 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 is credited for the taxes paid up until the date of closing, and the buyer is responsible for taxes from the date of closing and thereafter. The lawyer then apportions the dollar amounts to each party.
A survey is the document that outlines the exact boundary of a parcel of real estate. It tells you where your property begins and your neighbor's property ends - on all sides of the property. This is not an exact science and sometimes 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 seemingly inches of land.
Absent such disputes, however, a survey adds certainty to the property you are buying.
A lawyer should therefore compare the survey with the "legal description." That "legal" describes the property's boundary in words. "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 it encapsulates the entire parcel by returning to the point of beginning.
The Deed is the tangible evidence, a legal document, that is recorded in the chain of title in the county clerk's office. The deed represents your legal ownership of real property, and 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.
The real estate "closing" is where and when the actual transfer from one property owner to the next occurs. Though sometimes in a lawyer's office, 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 money, documents, and title. Title companies are situated in their nearby offices, 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."
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.
Return of Search and Deed:
Weeks after the closing, the title company will return the printed, updated title. Keep this stored with all your vital documents. Months later, the County Clerk will return the stamped deed to your attorney after they scan and verify it into the county record. It's a good practice to request that these legal documents, along with a copy of your survey, be returned to you by your attorney to avoid a mad rush to locate them years later when the property is transferred again.
For information about how we can help you with your real estate transaction, give us a call:
Konst Law Offices, 5511 Broadway, Lancaster, NY 14086.
Ph. (716) 601-1000