Real Estate Closing Process

Purchasing and selling property is most likely one of the largest financial transactions you will make which is why the closing process is so in depth. There are many players in a real estate closing. You have the seller's attorney, buyer's attorney and most often you also have a bank attorney, 1 or 2 Realtors and a bank rep or mortgage broker. I am going to give a brief synopsis of the closing process in upstate New York.

The Cayuga County Contract, for instance, is a 12 page document that needs to be signed by both the seller and the buyer AND approved by both parties attorneys. If the contract does not have attorney approval by both parties it may not be considered a valid contract.

The attorney approval clause in the Cayuga County Contract is important as it gives the attorney the chance to review the contract and make any changes or clear up anything that may concern him/her before the parties are bound to the transaction.

You should not enter into a contract without prior review from an attorney or one without an attorney approval clause.

Please note that 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 pursuant to New York Public Health Law, 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, both a septic dye test and a water test need 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.

The role of the seller's attorney is to make sure that the seller provides clear and marketable title to the buyer and to represent the seller interests during the transaction

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 without title insurance. This is the buyer's responsibility and is included in your loan estimate. * If you are paying cash for the property you do not need title insurance but it may be 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.

If there is not a bank involved with the closing, the buyer's attorney will schedule the closing once all documents have been received and reviewed and has determined that the title is clear and marketable.

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 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 closing disclosure statement which will break down all of the buyer's closing costs and will give the amount needed for closing. Now we can schedule a closing date.

The Closing

Expect the closing to take about an hour. 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 have your attorney attend the closing on your behalf. Some sellers choose to do this if they are out of town or have a valid reason not to attend.

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 attorneys 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 to be “on or about”. This is not a time is of the essence date and should not be depended on as the actual closing date but rather a guideline.

If you have any questions in regards to the Real Estate Closing process or if you need a real estate closing Attorney please contact our office at (315) 255-3368.