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Our Office Can Help Legally Represent You in a Real Estate Transaction, Including the Sale of Your Home.

The Law Office of Ronald D. Weiss, P.C.

The Legal Aspects of Buying And Selling Real Estate

• The General Legal Aspects of a Real Estate Transaction
• Particular Concerns for Sellers of Real Estate
• Particular Concerns for Buyers of Real Estate
• Why Should I Use an Attorney in a Real Estate Transaction?

The General Legal Aspects of a Real Estate Transaction

A. Pre-Contract When a seller (the “Seller”) sells real estate to a buyer (the “Buyer”), there are usually a number of important steps involved. A seller will first list their property on the market for sale. A real estate broker is frequently hired by the seller to help locate possible buyers for their property. Both the Seller and the Buyer will hire different attorneys to represent them in the transaction once the Seller, or a real estate broker acting on behalf of the Seller, has located a willing Buyer to buy the property for a predetermined price.It is advised that the Buyer perform termite and/or home/engineer’s inspections before signing a contract in order for the Buyer to assess the property’s state. All parties may move on to the contract stage if the buyer is happy with the condition.
B. Contract Upon the Buyer’s attorney’s notification of readiness to proceed to the contract stage, the Seller’s attorney will prepare a Contract of Sale, which will then be transmitted to the Buyer’s attorney. This crucial document delineates key details such as the names of the Buyer and Seller, the property for sale, the purchase price, and various terms and conditions governing the sale. Responsibilities of both parties, time constraints for acting in good faith, and provisions for defaults are outlined in the Contract of Sale. Attorneys representing the Buyer and Seller aim to safeguard their respective clients’ rights and articulate their expectations in this document. Given its significance as the primary reference for the parties and any legal proceedings, careful drafting and negotiation by both attorneys are essential.
Upon mutual satisfaction with the terms, the Buyer signs the Contract and includes a down payment check, forwarded to the Seller’s attorney for deposit into an escrow account until the closing. The Contract attains binding status upon the Seller’s attorney’s receipt of the down payment check and the full execution (signing) by both parties. Subsequently, both parties must fulfill their obligations within the parameters set by the Contract. It is important to note that all promises made in the Contract become null and void (unless explicitly preserved) after the transfer of title to the Buyer.
Upon securing financing and being prepared to close, the Buyer’s attorney will coordinate with relevant parties to schedule the closing.
C. Closing At the closing, the sale of the property is finalized by the buyer, seller, their respective attorneys, the title closer, the bank attorney (if applicable), and any applicable real estate agent or broker. Title to the property is passed from the Seller to the Buyer, who also pays the Seller the remaining purchase price, settles any outstanding taxes, makes adjustments for fuel, water, and taxes, and sends the mortgage and deed to the County Clerk for recording. After receiving the keys, the buyer becomes the new owner of the asset.

Particular Concerns for Sellers of Real Estate

A. Preparation of the Contract If the Seller is willing to proceed with a tentative agreement with a buyer, they should hire an attorney right away. In order for the attorney to strike such fixtures (items attached to the property) from the contract, the Seller must let the attorney know which fixtures will be specifically excluded from the sale. If not, it is assumed that all appliances and anything else attached to the property are being sold along with it. It should be noted that the Seller is required by almost all contracts to guarantee that the electrical, plumbing, and heating systems are in good operating order. It is common for the Contract to stipulate that any appliances that are still on the property must be in operational condition. Until the Seller transfers ownership of the property to the Buyer, these promises shall be enforceable. The Seller is under no further obligation with respect to the aforementioned matters after that day.
B. Dealing with Potential Issues for Sellers The standard contract further stipulates that the premises shall be delivered vacant and spotless, free of all liens, judgments, and government infractions, and that the premises shall be legally as existing at the time of closing. A title report that lists all judgments, unpaid taxes, liens, bankruptcies, building code infractions, and parking infractions against the Seller and the property will be ordered by the Buyer. The Seller may or may not need to take any action to clear title to the property, depending on the findings of this report and the terms of the Contract. If clearing the title is not possible, an attorney can help by suggesting workable alternatives. The deadline for Sellers to leave the property is another concern. A fair possession agreement that allows the seller ample time to vacate and compensates the buyer fairly for the seller’s stay after closing is typically drafted by the seller’s attorney.
C. Review of Seller’s Closing Expenses The following are typically included in the Seller’s costs at the closing: paying real estate broker fees, attorney fees, and any applicable recording fees; paying mortgages; paying New York State and New York City transfer taxes; and covering any applicable mortgage balance. In the event that the real estate being sold is a cooperative or condominium unit, the governing bodies of these buildings might receive extra fees.

Particular Concerns for Buyers of Real Estate

A. Applying for Financing Purchasing real estate typically entails more steps than selling it, mostly because financing is typically required in order for the buyer to have the money needed to make the purchase. The requirement that Buyers pursue the acquisition of a loan in good faith and with due diligence for the amount stated in the Contract, and that they either procure this loan by the deadline stated in the Contract or demonstrate that they have failed to do so after complying with the above requirements, are the most significant legal issues that Buyers must deal with when obtaining financing. A buyer must assiduously and in good faith provide the bank with all the necessary materials after receiving a commitment letter for the loan from the bank. Hiring a mortgage broker to expedite this process is helpful for many buyers.
B. Reviewing Inspection ReportsApart from financing issues, the buyer should protect themselves by doing an engineer’s and home inspection, as well as a termite inspection. It is best to handle these inspections prior to the contract in order to lower the risk of buying a damaged property and to provide the buyer with the greatest negotiating leverage during the contract stage. Under the terms of the standard Contract, the Buyer may perform a final inspection of the property prior to closing. As previously mentioned in the Seller’s obligations, the Buyer takes the property “as is,” that is, in the same condition as when they first saw it at the time of the Contract signing. As a result, the Buyer is legally required by New York law to inspect the property. Repairs are not the Seller’s responsibility unless expressly stated in the Contract. As a result, the home inspection is an important step in the real estate buying process.
C. Reviewing the Title Report The Buyer’s attorney orders a title search on the property for sale after both parties have signed the Contract. Following receipt of the title report, the buyer’s attorney must confirm that the property is in compliance with local building department regulations and that the buyer will receive “marketable” title—that is, good title that can be insured and sold—to the property free of all liens.
D. Review of Buyer’s Closing Expenses The closing costs a buyer will pay when buying a property are difficult to estimate because of the wide range of variables that affect them. Apart from the purchase price, a buyer’s expenses are generally estimated to be between 5% and 8% of the total mortgage amount. A non-exhaustive list of typical costs is provided below: Bank costs, mortgage tax, escrows for real estate taxes, homeowner’s insurance, title insurance, recording fees for the mortgage and deed, and fuel, tax, and/or water adjustments.

Why Should I Use an Attorney in a Real Estate Transaction?

It’s human tendency to believe that everything will unfold exactly as you have planned. But sometimes the real world has other plans. An accomplished real estate lawyer is capable of:

• Help you safeguard your rights and expectations at each stage of the purchasing and selling procedure.
• Describe the closing processes and the contract of sale.
• Act as a negotiator on your behalf to ensure that your rights are upheld.
• Prevent and/or settle possible conflicts that can occasionally occur in real estate transactions.

One of the bigger financial transactions in which a buyer or seller may be involved is a real estate transaction for many of them. Consequently, it makes sense to have competent legal counsel. The Law Office of Ronald D. Weiss, P.C. possesses real estate industry experience. We work hard to provide our clients with the information and support they require during their real estate transactions, as well as to represent them with diligence. Ronald D. Weiss, Esq. is admitted to practice in the states of New York, Connecticut, and the federal courts for the Eastern and Southern Districts of New York. He is also a member of the Nassau County Bar Association and the Suffolk County Bar Association. After graduating from the New York University School of Law in 1988, Mr. Weiss has authored multiple articles in legal journals. In the past, Mr. Weiss has worked as a law clerk for federal judge in the Southern District of New York, Honorable Prudence B. Abram, and at several sizable Manhattan law firms. CALL FOR A FREE CONSULTATION

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This material is meant to provide general information only, not legal advice. It is a concise summary of real estate law and practice.