What do I need to be concerned about when dealing with a real estate broker?
Commission agreements need to be in writing, and you should be aware that you can negotiate the amount of commission due the broker. When a buyer is found, the broker may ask that you sign a binder. You should have an attorney review any documents that a broker asks you to sign, including a commission agreement, because sometimes there are clauses in the broker's agreements that have legal consequences between you and the buyer. You also need to ask whether the broker is going to list you on Multiple Listing Service, or whether they are going to be the exclusive agent. If they are the exclusive agent, then they have the right to find you a buyer, without opening up the process to other "selling brokers." This may limit the amount of buyers who will have access to your sale.
Even though the broker is representing your interest, and not the buyer's, I would recommend that you obtain your own lawyer, and not a lawyer recommended by the broker. You want your attorney to be loyal only to you.
What documents do I need to give my attorney?
It would be helpful to have a copy of your Deed, a copy of your latest tax bill, your Survey, and, if available, your title report. You will need to give your attorney statements regarding your mortgages, so that pay-off statements can be obtained for the closing.
What can I expect from my attorney once the parties have negotiated an agreeable sales price?
As your attorney, I will prepare the contract of sale for review by the purchaser's attorney. The contract will be negotiated, so that both sides are "happy" with the deal. Once a formal agreement has been reached, it will be signed by both parties, and the down payment will be placed in my escrow account for safe-keeping. The purchaser is usually given forty-five days to obtain a mortgage in the amount specified. If they do not receive a mortgage commitment within the forty-five days, they can ask for an extension of time to receive it. If the extension is not granted, then the down payment will be returned, and the deal will be over. However, if they receive their commitment, the parties will proceed to closing.
Prior to closing, the purchaser will order a title report, which will be thoroughly reviewed by me. Any title issues will be addressed prior to closing. I will order payoff statements for each mortgage, and coordinate a closing with all parties. I will make sure that your rights are protected at the closing, and that you receive all money due you towards the purchase price and adjustments.
What title issues can arise?
The contract will specify that you, as seller, will provide a certificate of occupancy for the dwelling, garage, and other structures added to the house, such as a deck, or add-on. If it is determined that there is no certificate of occupancy, or certificate of completion, as required, then it may be the seller's obligation to obtain these certificates prior to closing. Usually, money is held in escrow by an attorney or the bank to ensure that the certificate will be obtained within a certain period of time.
Other issues may be judgments against the parties, which would have to be satisfied at or prior to closing. Any violations or liens directly against the property would also have to be satisfied. Other issues may arise, which would be addressed by me.
What are adjustments?
Property taxes are pro rated and the seller either receives or gives a credit depending on whether the taxes have already been paid, or whether taxes are due, but are already a lien. Rents, if applicable are also apportioned at closing. Water charges may also be apportioned. If the seller has an oil tank, an oil dip should be done a day or two before the closing, so that a credit can be given for the remaining oil. In the five boroughs of New York City, a final water meter reading needs to be done at or about the closing, so that the account can be transferred to the purchaser and the final bill paid by the seller. Utility companies must be called to transfer ownership as of the closing.
What if I am not ready to move by the date of the closing?
The Contract of Sale will have a clause that allows you to stay in the premises for five days beyond the closing date. It is recommended that vacant possession be given to the purchaser, because all issues will have been resolved at the closing. By staying beyond the closing date, an escrow agreement will be in effect, whereby your attorney keeps money in escrow pending your vacating the premises. Closing adjustments will be made as of the date of possession, and the purchaser will be entitled to his daily mortgage interest from the date of the closing to date of possession. Purchaser will also have another chance to make a claim that any appliances are not in working order, or that the premises were not in broom clean condition when you left. Sometimes this cannot be avoided when trying to coordinate a move into another house and a closing date on your purchase.
