Why Home Buyers Need A Real Estate Attorney

Buying a home will probably be the biggest purchase you will make in your life. Buying a home also involves New York real estate laws which are unique and raises legal issues and problems not present in other transactions.

A New York real estate lawyer is trained to handle these problems and has the experience to address them successfully.

Buying A Home

In a typical real estate sale in Somers and the surrounding areas in Westchester, the seller retains a real estate agent who is tasked with finding potential buyers. Once a buyer is interested in making an offer, the seller and buyer will conduct negotiations and the realtors will usually handle the discussions representing the respective parties. 

Once a verbal agreement is reached, the realtor for the seller will send what’s commonly referred to as a Memorandum of Sale or Dealsheet to the attorneys for the seller and the buyer. The dealsheet includes the relevant terms, including purchase price, amount of contract deposit, the amount to be mortgaged, if any, and any other relevant contingencies.

Upon receipt, it is customary in New York real estate transactions for the seller’s attorney to draft a Contract of Sale and send it to the buyer’s attorney for review.

Once both parties sign the Contract of Sale, the next steps usually include:

• The buyer obtains a commitment for financing;

• A title search is conducted;

• The closing is scheduled; and,

• The property is transferred from seller to buyer, and the seller receives the purchase price.

The process may seem simple but, without a real estate lawyer, the consequences may be more disastrous compared to buying a car that turns out to be a lemon or a stock investment that loses value not long after its purchase.

The Contract of Sale

The Contract of Sale is one of the most important documents in the transaction. Finding a local real estate lawyer is crucial in drafting, reviewing, and negotiating the contract in order to reflect the home buyer's desires and interests. There are many issues that may need to be addressed in the contract:

• If the property has changed or if there has been an addition to the property, was it done lawfully?

• If the buyer has plans to change the property, can that be done lawfully?

• What happens if a buyer has a home inspector check the property and termites, asbestos, radon, or lead-based paint is found?

• What if the property is found to contain hazardous waste?

• What are the legal outcomes if the closing does not take place, and what happens to the down payment?

• Will the down payment be held in escrow by a lawyer according to the escrow instructions? How is the payment to be made? Is the closing conditioned upon the buyer obtaining financing?

Most buyers finance a substantial portion of the purchase price for a home with a mortgage loan from a lending institution. The purchase agreement should contain a carefully worded provision that is subject to the buyer obtaining a commitment for financing.

Title Search

After the Contract of Sale is signed, it is necessary to establish the state of the seller's title to the property to satisfy the buyer and the lender. A title report is ordered from an abstract or title insurance company.

Upon receipt of the title report, a real estate attorney can help explain it contents. A title report can also help determine whether the legal description is correct and whether there are issues with adjoining or prior owners. 

In addition, a New York real estate attorney can explain the effect of easements and agreements or restrictions imposed by a prior owner, and whether there are any legal restrictions which will undermine your ability to sell the property if or when that time comes.

The Closing 

The closing is the most important event in the transaction. The deed and other closing papers must be prepared. At the closing, title passes from seller to buyer, who pays the balance of the purchase price. Frequently, this balance is paid in part from the proceeds of a mortgage loan. 

A New York real estate attorney will prepare a closing statement prior to the closing that shows the amounts that will be debited and credited to the buyer. This is where a good real estate attorney becomes really helpful – explaining what each figure means and how it affects the final amounts paid at closing.

Perhaps more importantly, if obtaining a loan, the lender will require a buyer’s signature on a significant number of documents. A real estate attorney will be sure to explain the purpose of each and every document before signing.

Important Of Having A Real Estate Lawyer At Closing

The closing process can seem confusing. There may also be last-minute disagreements over delivering possession and personal property or the adjustment of various costs, such as fuel and taxes. Without a good New York real estate lawyer, your rights may be at risk when buying real property.

Give us a ring or email us and let’s talk about how we can help you buy your next home.