For clients who are engaging in delicate real estate transactions, Sugarman Law relies on decades of practical experience in the specialized field of residential and commercial real estate law. Having an experienced real estate attorney who speak the language on your side can help you more easily navigate the complicated legal landscape.
At Sugarman Law we understand how these intricate laws can affect your purchase or sale and we break down the details so you know exactly where you stand at every stage of the process.
You can trust our expertise for a range of real estate matters.
- Commercial purchase and sale
- Residential purchase and sale
- Lender representation in loan settlements
- Landlord / tenant disputes
- Mortgage modification and foreclosure defense
- Deed transfers
- Co-op and condo disputes and document preparation
- Commercial and residential lease preparation
- Certificates of occupancy
- Town violation defense
- Short sales
For Residential Sellers
Whether you’re selling your home or a residential investment property, knowing where you stand at every phase of the sales process will make completing the transaction easier. While every sale is unique, the following is a basic outline of what to expect when you’re selling.
The binder. Once you have accepted an offer, your real estate agent will ask you to sign a binder, which lays out the terms of the transaction. The binder is the document from which the Purchase Agreement will eventually be drawn.
The inspection. Property inspections are usually conducted by a licensed engineer and are meant to confirm that the property being sold is in saleable condition. Depending on the size of the property, these inspections usually take 1-2 hours and are attended by the inspector, the buyer and the buyer’s real estate agent. The findings of the inspection should not be used by the buyer as a negotiation tool to get a lower price unless significant structural issues are discovered.
The Purchase Agreement (a.k.a. the Contract). After your property passes inspection, Sugarman Law will prepare and send the contract to the buyer’s attorney. The buyer signs the contract and returns it to our offices with their deposit check. You’ll sign the contract and you and the buyer will then be considered “in contract.”
Before we can prepare the contract, you must provide us with the following documents:
- Deed (does not need to be a certified copy)
- Property survey
- Certificate of occupancy for all structures (that would include the house, pool, decks, apartments, garage conversions, etc.)
- Your most recent property tax bill
The title search. While the buyer secures a firm mortgage commitment from a lender, a title search will be completed which will show mortgages, liens, violations, open building or work permits, or anything that could potentially affect the transfer of title at the closing. Prior to closing, all title issues will be cleared.
The walk through. Within 24-36 hours of the closing, the buyer will perform a final walk through of your home with their realtor. You should have already scheduled your movers and contacted utilities to transfer and/or close accounts.
The closing. Once the buyer has secured their mortgage, you’ll receive a “clear to close” notification from our office. At this time, we’ll schedule a closing date when the property’s ownership will be legally transferred from you to the buyer.
Before the closing date, our office will obtain a pay-off statement for your current mortgage (if any) and complete all adjustments for taxes, oil and water bills or common charges.
You must bring the following to your closing:
- Your state-issued photo identification
- All keys to the property, including remote controls for garage doors
For Residential Buyers
When you’ve found the home of your dreams or that perfect residential investment property, staying on top of the buying process can mean the difference between an easy transaction and a deal falling through. While every purchase is unique, here’s a general guide on what to expect while you’re in the buying process:
The binder. Once the seller has accepted your offer, your real estate agent will send a copy of the binder to our offices. The binder provides the terms of the transaction and is the document from which the Purchase Agreement will eventually be drawn. Do not agree to a larger down payment on this form than you are willing to put down in contract.
The inspection. While it is not mandatory to conduct a property inspection in New York State, it is highly recommended that you have a licensed engineer perform a thorough inspection. This is to ensure that you know what problems the property may have, including structural, electrical, roof, basement or mechanical systems. The inspection is not used as a negotiating tool to get a lower price unless major structural issues are discovered.
The Purchase Agreement (a.k.a. the Contract). Once your inspection is completed and any issues are resolved, the seller’s attorney will prepare the Purchase Agreement. Sugarman Law will negotiate any changes to this contract to better protect you. We will meet with you to explain your contractual obligations, including closing costs. You’ll sign the contract and provide a deposit on the purchase (this can be a personal check.) The seller’s attorney will deposit your check into an escrow account where the funds will be held until closing. The seller will then sign the contract at which point the parties will be considered to be “in contract.”
The mortgage. Within 30-45 days of signing the contract, you must secure a firm mortgage commitment from a lender (before starting the buying process, you should already be preapproved.) Once you are in contract, we’ll send a copy of the signed Purchase Agreement to your lender.
The title search. While you are securing your mortgage, our office will order a title search that will show any issues that could potentially affect the transfer of title at closing. Prior to closing, all title issues must be cleared by the buyer. Some common title clearance issues are:
- Fence or shed encroachments
- Open mortgage or liens against the buyer, seller or prior owners
- Open building permits
- No survey
- No certificate of occupancy
- Unrecorded prior deed
- Defective deeds that need to be corrected
The walk through. Within 24-36 hours of the closing, you should schedule and perform a final walk through with your realtor, contact utilities to transfer and/or open accounts and schedule your movers. If you find any unexpected problems during the final walk-through, notify Sugarman Law immediately and we will address the issue with the seller’s attorney.
The closing. Once you’ve secured your mortgage, you’ll receive a “clear to close” notification from our office at which time we’ll schedule a closing date where the property’s ownership will be legally transferred from seller to you.
You must bring the following to your closing:
- Bank checks (I will advise you on specifics on advance of the closing)
- Your state-issued photo identification
After the closing. After the closing you will be the owner of a new home! We will send you a completed closing statement that summarizes the completed transaction with a copy of all closing documents.
Buying a Short Sale
A short sale transaction is one in which the owner of a house owes more to his or her lender than the house is worth on the market. In this case, the mortgage holder agrees to accept less than the full mortgage amount as full payment. As a buyer, you can come in and make a deal with the lender to pay off the mortgage and buy the home. If you have a good negotiator on your team, there are good deals to be made. However, short sales can quickly become complicated.
Here are a few tips if you’re considering a short sale:
Find the right realtor. Because of the unique nature of short sales, find a realtor who is experienced and knowledgeable about the process. The listing real estate agent is usually the person that negotiates with the lenders, who require very specific information and documentation before allowing a short sale transaction to complete.
Be patient. Short sale approval usually takes 90-120 days. During this period, the agent negotiating your behalf is providing documentation as the lender requests it. The lender is simultaneously doing its own property appraisal and due diligence. They want to ensure that you are able to complete the purchase if they approve your offer.
Be a preapproved buyer. Because the seller’s lender needs to be sure that you are financially able to complete the short sale purchase, be prepared with preapproved mortgage funding. Your preparation and cooperation will speed the negotiation process.
Expect a counter-offer. Sometimes after several months of waiting, the lender may come back to you with a counter-offer that’s higher than what you previously agreed upon. You can agree to their counter-offer, cancel the deal or make a counter-offer yourself.
Do a records check. Oftentimes the owner of a home that is undergoing a short sale may have more financial problems than not paying their mortgage. Because of financial strain, they may also have outstanding tax liens, second mortgages, judgments against them, or improper municipal permits or certificates of occupancy. All of these issues must be cleared before the home can be purchased. The negotiator must have these lien holders accept lesser amounts than they are owed, which can be difficult or take time.
Buy from a motivated seller. Because homes being sold in short sales are usually in foreclosure, the seller may not be motivated to sell and may take their time in cooperating with the bank. Sellers need to submit extensive financial documentation and an explanation of their hardship. If the seller isn’t motivated to cooperate, the deal can be delayed indefinitely. In our experience, we steer clients away from purchasing this type of short sale because it can be a long, arduous process that may never reach completion.
Seller’s Typical Closing Costs
A Seller has minimal closing costs:
New York State – $2.00 per $500 of the purchase price (unless purchasing from a builder or sponsor)
PLUS New York City
- 1% for a 1-2-3 family residential, co-op, or condo unit with a purchase price of $500,000 or less
- 1.425% for a 1-2-3 family residential, co-op, or condo unit with a purchase price of greater than $500,000
- 1.425% for all other properties with a purchase price of $500,000 or less
- 1.625% for all other properties with a purchase price greater than $500,000
1% of purchase price
1% of purchase price less $100,000 exclusion
- 2% less exclusion of $250,000 if improved; $100,000 if unimproved (E. Hampton, Southampton, Shelter Island)
- 2% less exclusion of $150,000 if improved, $75,000 if unimproved (Riverhead & Southold)
Real Estate broker commissions
Typically 4-6%. This is paid at closing.
Satisfaction of mortgage filing fee
Often included in the final payoff. Approximately $100.00 per mortgage.
Closer Appearance or “Pick Up” fee
Now each closer charges a fee of $200-$250 per mortgage so as to ensure the mortgage payoff check is FedEx’d to the lender and to file the satisfaction of mortgage. If there is no mortgage, then it is customary to give the close a tip of $100-$150,
New York State Real Property Disclosure Credit
New York State Real Property Law Article 14 requires sellers of 1-4 family residential real property to disclose known defects within home prior to contract. Alternatively, the seller may give a $500 credit at closing. This does not apply to the following:
- Vacant land
- Condominium or co-operative apartments
There are various exempt transactions. Common ones include Estates/Fiduciaries, pursuant to a divorce decree & newly constructed housing.
Purchaser’s Typical Closing Costs
This depends on your lender. Below is a list of typical fees but it is not a complete list.
- Origination fee
- Bank Attorney
- Flood certification
- Credit report
- Application fee
- Tax service fee
- Mortgage insurance premium (FHA loan)
- PMI (if not FHA & are putting less than 20% down)
- Escrows for homeowner’s insurance & taxes
- Prepaid interest
Below are some typical charges. This is not a complete list.
- Owner’s title policy
- Lender’s title Policy
- Municipal searches
- Survey or survey inspection
- Bankruptcy/Patriot Acts searches
- Sewer search
- Street report
- Tax report
- Certificate of occupancy search
- Deed/Mortgage recording fees
Outside New York City (except Westchester, Rockland & Ulster counties)
- 1.05% for all properties less $30 for 1-2 family residential dwellings. 0.8% paid by borrower, 0.25% paid by lender
- 1.5% for all other properties
New York City
- 2.03% for all 1-2-3 family residential or condo unit less than $500,000, less $30 for a 1-2 family dwelling only. 1.8% paid by borrower, 0.25% paid by lender.
- 2.175% for a 1-2-3 family residential or condo unit over $500,000, less $30 for a 1-2 family dwelling only. 1,925% paid by borrower, 0.25% paid by lender.