What Happens At The Closing Of My Condominium Purchase In New York?
At the closing for a condo purchase, the purchaser will need to bring certified funds and the seller will sign a deed over to the purchaser, conveying the condo unit to the purchaser. Most purchases have a lender, so there will likely be a bank attorney present as well or a representative from the lender. You will also have a title company present, who will issue title insurance to the lender and the Purchaser. Finally, the seller, the buyer, the seller’s attorney, and the buyer’s attorney are usually present unless one of the parties closes using a Power of Attorney.
If you are purchasing a condo and obtaining a mortgage loan, you will have to sign numerous loan documents before the bank attorney actually approves the release of the funds. The most important documents that a condo purchaser will sign is a mortgage and a promissory note. The note will indicate how much the borrower is borrowing and the terms of the payback of that money. The mortgage provides the lender with a security interest in the condo unit, which is collateral for the loan being extended. If the purchaser does not pay back the loan on-time and in-full, the bank has the option of starting a foreclosure action. In addition to the mortgage and note, there is often a large stack of ancillary documents that the purchaser needs to sign.
There are also some documents that need to be filed with the deed. These are tax return documents and they are referred to as transfer documents in the greater New York City area. These will be signed by both the purchaser and the seller. In addition, the title company is usually going to request some affidavits for both the seller and purchaser to sign before they issue title insurance. As a condo purchaser, you should expect to be signing a lot of papers and you should expect to bring certified funds for whatever your mortgage loan proceeds do not cover.
As a purchaser, you should expect to pay some additional closing costs, as well. The lender usually takes their closing costs out of the proceeds of the loan and you will have to make up the difference with your own funds. There are usually move in or move out deposits that must be put down for the condominium and there is also mortgage tax, recording fees, and other closing costs that the purchaser should be expected to pay.
If you are a seller of a condominium, you will not need to sign as many documents as the purchaser. But you must sign a Deed of Sale and the transfer documents to transfer the condominium property to the purchaser. You may need to sign a few documents for the purchaser’s lender and for the title company as well. From the Seller’s perspective, you are essentially at the Closing to transfer your condo to the buyer and to obtain the net proceeds from the sale after your closing costs are paid. When representing a seller of real estate, the lawyer’s focus at the closing should be to ensure that the Seller is ready to close and is receiving the proper sum of money. After the closing is over, it may be too late to obtain any money owed.
What Laws Should I Be Aware Of Before Putting My Condominium Up For Sale In New York?
Condominium sellers should be aware of the transfer tax that they are going to have to pay to New York State. New York State charges a 0.4% transfer tax, which means 0.4% of the purchase price. In New York City, there is an additional transfer tax as well, this is usually around 1.5% but varies based on the sales price of the property. The seller should also be aware of the brokerage commissions that they are going to have to pay and they should be aware of the mortgage payoff that must be paid at closing if the seller owes any money to current mortgagees. If you are a condo seller, it is recommended that you identify all closing costs and understand how much money they expect to walk away with at the closing table prior to listing your condo for sale.
In addition, the Seller should understand that any intentional misrepresentations that are made to the Purchasers could potentially be an issue. Your best bet is to minimize communications with the purchaser directly if possible. Instead, your real estate agent or attorney should handle the communications with their counterpart, the purchaser’s real estate agent or attorney. New York adheres to the doctrine of “caveat emptor” in sales of real property and imposes no liability on a Seller for failing to disclose information regarding the premises when the parties deal at arm’s length, unless there is some conduct on the part of the Seller which constitutes active concealment.
Generally speaking, a seller of a condominium in the greater NYC area should be aware of the transfer tax and should sell the property without making any false or questionable statements to the buyer or his or her representative.
What Happens During The Bidding And Negotiating Phase Of Selling My Condominium?
In the New York City and surrounding areas, the real estate attorney is usually not involved in the bidding and negotiation process of selling your condo. Instead, the real estate agent will take the lead when it comes to price negotiation and the bidding process. The real estate agent takes an active role when it comes to selling and marketing the property and negotiating the terms of the sale. The real estate broker earns his or her commission by providing you with this valuable service. Usually, a buyer will make an offer on the property through your real estate broker and you will then discuss the details with your real estate agent and consider whether or not to accept the offer. Obviously, as a condominium seller, you and your agent are searching for a qualified buyer who can get to the closing table quickly while maximizing the sales price of the condominium unit.
Sometimes, after or right before the contract is signed, there may be some additional negotiation that your real estate attorney may handle. For example, if a buyer is getting a mortgage loan and the appraisal comes in below the purchaser price, then the mortgage company is usually not willing to loan the same amount to the purchaser. They lower the amount of the loan for that property. Therefore, at this point, the purchase price may be renegotiated so that the transaction is not cancelled. Since the attorneys are already involved in the process, they will usually take part in the negotiations on behalf of the clients. However, for most transactions in Long Island, Westchester, and NYC, the real estate agents and brokers handle the bulk of the negotiation and bidding process. Therefore, you should work with an experienced and qualified real estate broker.
For more information on Closing The Sale Of A NY Condominium, a consultation is your next best step. Get the information and legal answers you are seeking by calling (800) 619-3570 today.
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