The Art of the Close: Making Your Home Purchase Seamless

You did it! You finally decided that you want to buy a home. Whether you’re in an apartment or you’re tired of living with Mom & Dad and need to move out (or perhaps Mom & Dad are kicking you out), it’s important to know what you need to do before you open the door to your new home. Real estate transactions can be a complex process that involve numerous legal, financial, and logistical considerations. You don’t need to worry because you’ve watched a plethora of legal shows on Netflix, so you’re all set, right? Well, not quite!

Understanding the intricacies of real estate closings is crucial for both buyers and sellers to ensure a smooth and successful transaction. In this article, we will dive into the essential aspects of real estate closings in New York, covering everything from preparation to signing papers at the closing table. Join me as we take a closer look at what steps are needed before you can grab the keys to your new home!

Preparation

As Mom and Dad always used to say, “Prior Preparation Prevents Poor Performance.” Over the years, I shortened this to “P to the 5th Power.” Before getting to the closing table, several steps must first be completed. For buyers, this often involves securing financing, conducting inspections, and obtaining title insurance. Sellers typically need to gather relevant documents, such as the deed, and cure any title defects, such as mortgage payoff letters, and obtain final water & fuel readings. Additionally, the buyer and seller may negotiate contract terms, such as the purchase price, closing date timeframe, and any contingencies.

Title Examination

A critical component of the closing process is the title examination, which ensures that the property’s title is clear of any encumbrances or defects. This typically involves a thorough review of public records to verify ownership, liens, easements, and other potential issues. Generally, a closing will not occur unless the title company confirms the title is clear. On certain (and very limited) occasions, a title company may agree to escrow funds at the closing. This allows the closing to take place and gives the seller additional time after the closing to cure the title defect(s). Title insurance is commonly obtained to protect against unforeseen challenges that may arise after closing.

Closing Costs

Closing costs can vary depending on many factors, including the property’s location, purchase price, and financing arrangements. Common expenses include attorney fees, title insurance premiums, transfer taxes, recording fees, and lender charges. Buyers and sellers should carefully review the closing disclosure statement to understand their respective financial obligations before sitting down for the closing. This avoids unnecessary surprises. While surprises may be fun if it’s your birthday, they’re not so much fun on closing day!

Closing Day

On the day of closing, all parties involved—including the buyer, seller, attorneys, title company, and the lender—gather to finalize the transaction. The lender’s attorney oversees the process and ensures that all documents are properly executed. Key documents signed during closing may include the deed, promissory note, mortgage documents, and various disclosures. Your attorney should explain the paperwork to you before you sign. While you can’t change any of the language on loan documents at the closing table, it’s important to understand what you’re signing.

Recording and Disbursement

Following the signing of documents and the exchange of money/documents, the closing is deemed complete and title is transferred. Post-closing, the title company will record the deed and mortgage with the County Clerk’s office where the subject property is located.

After the closing, there are several post-closing tasks that may need to be addressed. For buyers, this may include contacting the utility company to transfer service into their name, arranging for trash removal from a local trash company, as well as setting up their cable. Sellers may need to cancel insurance policies, settle outstanding bills, and confirm that any liens or mortgages are properly released.

Navigating a real estate closing requires careful planning, attention to detail, and collaboration among all parties involved. By understanding the various steps involved in the closing process and working with experienced professionals, buyers and sellers can facilitate a seamless transaction and achieve their respective goals. With proper preparation and diligence, closing day can mark the beginning of a new chapter in the exciting journey of property ownership.

Written by Daniel S. Glaser, Esq.
Herzog Law Firm PC https://www.herzoglaw.com/