The Real
Estate Closing Process in Buffalo, NY
Property
rights and ownership are two of the most coveted rights. The transfer of real property in New York
State from one owner to another is designed to bring order. It is an undertaking that should be viewed
legally from the perspective of "delivering good title."
Good 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? Well, 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 that
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, commonly referred to as a "closing." After first reviewing the sales contract, a
lawyer orders a "title search" that scours the legal chain of title
to uncover all 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 a document that states the exact boundary of a parcel of real estate. It tells you where your property ends and
your neighbor's property begins - 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," which 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, that represents your legal ownership of
real property. 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 lawyers' offices, 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 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.
For more information on this subject, or to ask questions
about a particular matter, please contact us to speak with an Attorney:
Konst Law Offices:
5511 Broadway
Lancaster, NY 14086
Email: KonstLaw@gmail.com
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