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| What to Expect When You Buy or Sell a House |
| by: Robin Gronsky |
A residential real estate closing is quite often a time of great expectation and also a time of great anxiety. You can be assured that an experienced real estate attorney will exercise her years of knowledge and experience to make the process as smooth and stress free as possible for her clients. Whether representing a seller or buyer, she ensures that the transaction moves as expeditiously as possible from start to finish. The purchase or sale of a home generally begins with the drafting and negotiation of the Contract of Sale. This may be done before the attorneys are involved in the transaction. The Contract of Sale is of great significance to both the buyer and the seller. For the seller, the price, closing date, mortgage commitment date, and inspection contingencies are of vital importance. For the buyer, in addition to these issues, the financing terms and the scope of the inspection contingencies are important. After the Contracts are signed, they are permitted to be reviewed by the buyer’s and sellers’ attorney during the 3-day Attorney Review Period. A buyer or seller should always make sure that an attorney reviews the Contract of Sale. During this time, the attorneys can make changes or even disapprove a Contract, allowing either party to walk away from the deal. Once the attorneys (in consultation with their clients) agree on any and all changes, the Attorney Review Period is ended and the Contract is now binding on both sides. Once the terms of the Contract of Sale are agreed upon, the balance of the deposit is paid. The deposit should be held in escrow by the seller’s attorney and it is released at the time of closing. At this point, the buyer starts looking for a mortgage loan and calls in a home inspector to inspect the house. The dates by which these activities must be done is set forth in the Contract of Sale. A thorough inspection enables the buyer to ensure that the condition of the property can be ascertained and any defects or deficiencies can be appropriately identified and addressed. After the inspections are completed, both the buyer and seller must explore the options available to them. Depending upon the magnitude of any defects in the house, the buyer may elect to terminate the transaction, may seek a credit from the seller to enable the buyer to perform the repairs or may propose that the seller perform the repairs prior to the closing. In response, the seller may offer a credit to the buyer, may agree to perform some or all of the repairs identified by the buyer, or may indicate that it will not do anything. The negotiation of these issues is completed through the attorneys. To protect the client’s interests, the negotiations must be tailored to accomplish the client’s particular goals in the transaction. Your real estate attorney knows how to best protect her clients’ interests. She is familiar with current trends and has readily available the most current laws and regulations which govern real estate transactions and land use. The terms of the mortgage commitment should be carefully reviewed by your lawyer to ensure they satisfy the provisions of the Contract of Sale. Once the mortgage commitment is obtained, the date, place and time for the closing is agreed upon by the parties. The seller typically signs all of the documents before the closing and may not be not present at the closing. At the closing, the buyer and seller must be assured that all of the obligations described in the Contract of Sale have been fulfilled. In addition, items such as real estate taxes must be adjusted between the buyer and the seller. The buyer’s counsel typically acts as the settlement agent and prepares the HUD-1 settlement statement which itemizes the closing costs, the payoff of the existing mortgage, the expenses of the seller and buyer, and the adjustments between them. The buyer’s attorney also supervises the signing of the new mortgage documents. The seller’s attorney delivers a Deed and Affidavit of Title to the buyer’s attorney. The Deed and new mortgage must be recorded by the buyer’s attorney at the County Clerk’s Office after the closing. When the seller’s and buyer’s attorneys agree that all of the conditions of the Contract of Sale have been met, including repairs and clear title, the realtor delivers the keys to the property to the buyer and the buyer’s attorney distributes the checks to the seller, the realtors, the seller’s mortgage lender and any other payments that must be made at the closing. At that point, the closing has been completed. The purchase of a home is usually the single most important investment that a person makes. By retaining an experienced real estate attorney at the beginning of the process, the buyer or seller can minimize the chance for any error and ensure a smooth and orderly transfer. Robin M. Gronsky has been practicing law since 1982. She is admitted to practice in New York, New Jersey and Florida. As a former general counsel of a national mortgage lender, Ms. Gronsky is experienced in corporate matters, mortgage licensing on a nationwide basis, and all facets of residential real estate transactions. Ms. Gronsky\'s practice is geared to maintain personal contact with her clients and develop a close-working professional relationship over a long period of time. This helps assure that her clients\' work will be performed by the lawyer they have chosen. Ms. Gronsky received her J.D. from the Boston University School of Law. |
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