Buying & Selling Real Estate
Buying a home can be a confusing and complicated process. The first thing to consider when looking for a home is the price range. In addition to financial issues, you’ll want to zero in on the ideal neighborhood and your top priorities for a home. You’ll learn a lot by visiting open houses and comparing sale prices and features.
And it’s crucial that you know your rights and the legal issues involved in residential real estate transactions, such as disclosures, purchase contracts, potential title defects, zoning issues, and taxes—before the process begins. Although the steps involved in buying a home are similar regardless of where you live, New York's real estate laws and practices are unique in some respects—particularly if you are looking to buy a co-op or condo.
With proper preparation, careful choice of a real estate agent, and prudent use of other qualified professionals, buying a home in New York can be a positive experience.
Seller Disclosure Requirements in New York
State law in New York (New York Real Property Law Section 462) requires that sellers provide buyers a disclosure form, which includes details on the property, including:
material defects in the electrical, mechanical and other systems
conditions such as termites or asbestos
homeowners’ association rules, and
other details on the property, such as shared driveways.
Disclosures must be on a Property Condition Disclosure Statement form established by the New York Department of State. A seller who fails to provide the disclosure form will need to credit the buyer $500 at closing. Certain types of properties (such as newly built homes and cooperatives) are exempt from state disclosure rules in New York.
In addition to state-required disclosures, sellers of houses built before 1978 must comply with federal Title X disclosures regarding lead-based paint and hazards. Seller disclosures are important for you as a buyer, since just looking at a property may not be enough to tell you what problems its owner encountered with it while living there.
Home Inspections in New Yor
Buyers should not rely solely on the seller's disclosures, however, but should hire an independent home inspector to verify the information from the seller's disclosure. One of the common contingencies to real estate purchase agreements is a home inspection. Hired by the buyer, an inspector examines the house thoroughly for non-functioning systems, damages, and repairs that may be needed. His detailed report forms the basis for continuing with the purchase, renegotiating the sale price, allowing the seller to make repairs, or for pulling out of the sale. A home inspection is recommended on purchases of new construction as well as older homes and is a critical component of the home buying process.
Many buyers make their offer contingent upon a satisfactory inspection report to be sure no material defects exist and to identify leaking, noise, or odor problems; conditions that could lead to mold; foundation and structural integrity; and the condition of all major systems (heating, cooling, electrical, plumbing); and other problems with the property.
Real Estate Purchase Agreements in New Yor
A purchase agreement is a legal document that contains the material terms and conditions of your real estate transaction. It must be in writing and signed by the parties (buyers and sellers) to the contract, and include an offer to sell or purchase; an acceptance of the offer; the sale price, down payment, and other financial terms; who pays for what settlement or closing costs; and an adequate description of the property.
Title Issues in New York
A buyer should always obtain a title search from a title company before purchasing a home. The title company searches public records and other databases to see if there are any liens or encumbrances on the property. Title searches can also reveal if there are are any easements the property is subject to such such as the utility company’s right to access part of the property. Your attorney will order a title search of the property to determine if there are any title issues which need to be addressed. If the title search reveals issues, the buyer may require the seller to correct those problems as a condition to closing.
In a real estate purchase, title insurance must be purchased to safeguard the buyer against any title claims by other parties. Mortgage companies usually require buyers to purchase a title insurance policy in connection with obtaining a mortgage. An attorney customarily will order title insurance on behalf of the buyer.
The Lawyer's Role in a Purchase of Real Estate
Unlike many states, New York requires buyers to involve a lawyer in the house-selling transaction. (N.Y. Jud. Law Section 484). Among other tasks, your attorney will assist in ensuring that the mortgage documents are in order, such as a mortgage commitment letter, good faith estimates of closing costs, escrows, and proper calculation of lender's fees; review the title report and work to resolve any issues, such as liens on the property; prepare all the closing documents, such as the deed; and calculate how much money is owed to whom at the closing of the deal, and assure that all payments are accurately made. It is important that you retain a knowledgeable attorney to represent you in the purchase of your home.