Long Island, New York real estate attorney Cynthia Burke answers questions clients frequently ask about selling real estate.
What are the primary concerns I should have when dealing with a real estate broker?
Commission agreements need to be in writing, and you should be aware that you could negotiate the amount of commission due the broker.
When a buyer is found, the broker may ask you to sign a binder.
You should have an attorney review any documents 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 your property on Multiple Listing Service (MLS), or whether the broker will be the exclusive agent. If the broker is the exclusive agent, then he has the right to find you a buyer, without opening up the process to other "selling brokers," which may limit the number 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. It is important that your attorney to be loyal only to you.
What documents do I need to give my attorney? As a seller, it is helpful to have a copy of your deed, a copy of your latest tax bill, your survey, and, if available, your title report. If you have a mortgage, you will need to give your attorney current statements, so that pay-off figures can be obtained for the closing.
What can I expect from my attorney once an agreeable sales price has been negotiated? As your attorney, I will prepare the contract of sale for the purchaser's attorney to review. The contract will be negotiated, so that both sides are "happy" with the deal. Once a formal agreement has been reached, both you and the prospective buyer will sign it, and the down payment will be placed in my escrow account for safekeeping. The purchaser is usually given 45 days to obtain a mortgage in the amount specified. If they do not receive a mortgage commitment within the 45 days, the purchaser 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 the buyers receive their commitment, the parties will proceed to closing. Prior to closing, the purchaser will order a title report, which will I will thoroughly reviewed. 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 real estate 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, an attorney or the bank will hold money in escrow to ensure that the certificate will be obtained within a certain period of time.
Other title 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 I would also address.
What are adjustments? A number of adjustments may be made on the final closing documents such as:
Property taxes, which are pro-rated; 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.
Nassau and Suffolk County lawyer serving clients in Hempstead, Garden City, Mineola, Rockville Centre, Baldwin, Long Beach, Freeport, Uniondale, Oceanside, Elmont, Franklin Square, West Hempstead, East Meadow, New Hyde Park and towns across Long Island.
