"The Real Estate Closing"- Lancaster Attorney Harry N. Konst, Esq.
Property
rights and ownership are one of the most coveted rights of humankind.
The transfer of real property in New York State from one owner to
another is designed to bring order. It is a process that is described
as "delivering good title to the purchaser."
Title:
When
you buy a new home, you want to make sure that the seller has satisfied
all of his or her obligations, such as paying off the mortgage and all
tax liens, so as to deliver "clear title." Clear title means that there
are no outstanding claims against the property when the title transfers
to you.
Suppose, for example, that the seller has a
personal judgment, unrelated to the real estate, against him for losing a
lawsuit years ago? In New York State, a properly filed judgment
becomes a lien against all real property that person owns in that
county. If you were to purchase his property without resolving that
judgment, the judgment creditor can then come after you and your real
estate to collect!
In New York State, an attorney is
required to oversee and conduct the real estate transfer process,
commonly referred to as a "closing." After first reviewing the sales
contract to ensure that there are no conditions that would interfere
with his client's rights.
Next, the lawyer orders the
"title search" that scours the legal chain of title to uncover the
history and claims against the seller and the property.
The
lawyer collects and assembles all tax bills from the municipalities,
including county, town, village, and school taxes. Since tax bills are
based on different periods, the closing date determines pro rata who
pays which part of the tax bill. For pre-paid bills, the seller would
be credited for the taxes paid up until the date of closing, and the
buyer would be responsible for taxes from the date of closing and
thereafter. The lawyer then apportions the dollar amounts to each
party.
Survey:
A survey is the document that
describes in words the exact boundary of a parcel of real estate. It
tells you where your property begins and your neighbor's property ends -
on all sides of the property. This is not an exact science and
frequently one surveyor may differ with another over the exact boundary
of adjacent properties, thus giving rise to "boundary disputes."
Ownership of property is an inherent right, so it may seem, and
arguments can ensue over feet or even inches of land.
Absent such disputes, however, a survey adds certainty to the property you are buying.
A
lawyer reads the survey and compares it to the "legal description."
That "legal" describes the property's boundary in legalese. "Beginning
at a point 20 feet from one point, continuing eastward 120 feet to a
point..." And so it begins describing the lines outlining your coveted
piece of real estate, until encapsulates by returning to the point of
beginning.
Deed:
The Deed is the tangible
evidence, a piece of paper, properly recorded in the chain of title in
the county clerk's office. The deed represents your legal ownership of
real property, and it legally defines the property transaction from one
owner to the next.
"WITNESS, that the party of the first
part (the seller), in consideration of lawful money, does hereby grant
and release unto the party of the second part (the buyer)..." And so
the legal jargon of centuries ago continues today.
Closing:
The
real estate "closing" is where and when the actual transfer from one
property owner to the next occurs. Though sometimes in a lawyer's
office, the real estate closing usually takes place in the county
clerk's office, where documents are exchanged and"filed" with the county
clerk.
Gathered that day at one of the many conference
tables, sellers, buyers, lenders and their attorneys congregate for one
purpose - to exchange money, documents, and title. Title companies are
situated in their nearby cubicles, ready to "update title" all the way
up to the magic moment of title transfer to ensure that nobody slips in
the last minute to claim an interest in the subject property. You want
your title to be "clear."
Closing Statement:
The
Closing Statement is a summary of the real estate transaction. It
identifies the parties and summarizes all the costs each party must pay.
The seller, for example, pays for the survey. This makes sense,
because the seller is responsible for proving that she is delivering
good and clear title. Then, the taxes are pro-rated and apportioned.
The closing statement identifies who pays which filing fees, transfer
tax and mortgage tax.
Return of Search and Deed:
Weeks
after the closing, the title company will return the printed, updated
title. Keep this stored with all your vital documents. Months later,
the County Clerk will return the stamped deed to your attorney after
they verify and scan it into the county record. It's a good practice to
request these legal documents, along with a copy of your survey, be
returned to you by your attorney to avoid a mad rush to search for them
years later when the property will be sold again.
For information about how we can help you with your real estate transaction, give us a call:
Konst Law Offices, 5511 Broadway, Lancaster, NY 14086.
Ph. (716) 601-1000
www.KonstLawOffices.com
Here's a description of what your attorney does in a real estate closing:
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