The Real Estate Closing Process- Central New York

I am currently in the middle of a Real Estate transaction with an out of state lender. I have tread very carefully into these water's and I have anticipated issue's with this real estate transaction.
I am working with a couple who has relocated to Auburn, New York from Washington State. After my initial meeting with my clients they told me they will be using a mortgage broker from Washington. Immediately a red flag went up not because I don't think the broker is good but because the New York State Closing process is very different than a closing in Washington State.
We close with attorney's in New York. The seller has their own attorney, the buyer has their own attorney and the bank will have their attorney. Many other states close with Title Companies. I am going to explain the New York State closing process in depth in this post.

The Real Estate Contract

• The Cayuga County Contract is a 13 page document that needs to be signed by both the seller and the buyer AND approved by both parties attorney's.
• If the contract does not have attorney approval by both parties it is not considered a valid contract.
• The Cayuga County Real Estate Contract authorizes the seller's attorney to start title work immediately and if something falls through the buyer's deposit goes towards covering any costs incurred.

Title Documents/Role of the Seller's Attorney

In New York the seller's attorney needs to provide the buyer's attorney with title documents. These documents include an original updated abstract of title, an updated property survey, A copy of the proposed deed, a smoke/alarm carbon monoxide affidavit, the RP-5217 and the TP-584, and the statement of taxes and copies of the tax and water bills.

*If the property is located in Cayuga County and has a septic system and a well a septic die test and a water test needs to be done by the seller and their attorney needs to provide a discharge permit issued by the County Health Department.

• It can take up to 30 days to get these title documents back.
• The attorney is depending on the title company and the surveyor- If a brand new abstract is needed it can be a lengthy process. Normally the survey will take about 3 weeks to get back.
• Once the attorney has all of these documents in place and has reviewed the Abstract for any potential issues with title they are sent to the buyer's attorney.
• How quickly the seller's attorney can get these documents in order will set the pace for the closing. - so be sure to choose a competent Real Estate Attorney-

Title Commitment/Role of the Buyer's Attorney

Once the Buyer's Attorney receives all of the documents from the seller's attorney they will review the documents and begin the process of getting the commitment for title insurance. Most banks will not issue the mortgage with out title insurance. This is the buyer's responsibility and is included in your closing cost estimates that your loan officer gives you when you apply for your mortgage.

* If you are paying cash for the property you do not need title insurance but it is recommended in order to protect you from future claims to the title.

It should take the buyer's attorney about 7-10 days to review all of the title documents and get the commitment for title insurance. If the buyer's attorney or the title company finds any problems with the abstract that the seller's attorney missed it will need to be remedied at this time.

The Bank Attorney and Scheduling the Closing

• Once the Buyer's Attorney has received the commitment for title insurance they will forward everything to the bank attorney for final review.
• At this point 2 attorney's have reviewed the documents and there should not be any issues.
• The bank attorney will review the commitment for title insurance. In addition to the other documents they will also want to see the buyer's Home Owner's Insurance Binder w/ paid receipt.
• The bank attorney will then look to underwriting to see if the loan has been cleared to close.
• Once they receive the clear to close from the bank they will prepare the HUD-1 settlement statement which will break down all of the buyer's closing costs and show how much is needed for closing and then we can now SCHEDULE THE CLOSING!

The Closing

• Expect the closing to take about 2 hours. Most likely the buyer, the seller and the attorney's will be at the closing. Sometimes there may be a closer from the title company and the real estate agents.
• If you are the seller you can pre sign documents and just have your attorney at the closing so you do not have to attend. Some seller's choose to do this if they are out of town or if there is any tension with the buyers.
• The buyer has to sign all of the bank documents at the closing and usually has to do this in person. The buyer will have the most documents to sign at the closing.
• Once everything has been signed one of the attorney's will file all of the necessary documents with the County Clerk's office.

Congratulations you have now sold or own a new home!

Expect the closing process in New York to take 45-60 days. Also note that the closing date in the Cayuga County Real Estate Contract is considered on or about this is not a time is of the essence date and should not be depended on as the actual closing date.

If you have any questions in regards to the Real Estate Closing process or if you need a real estate closing Attorney please contact Daniel Testa, Esq. at 315-255-3368.

As always for immediate answers to any real estate questions please feel free to call me anytime at 315-515-8348.