A residential real estate lawyer represents either the buyer or the seller when they are buying or selling a home. Here are some of the things that residential real estate lawyers do:
- draft or review the contract
- draft or review the deed or stock certificate
- order and review the title report
- draft and review the closing statement
- determine the closing costs
- review mortgage documents
- make sure the buyer gets their money in full
- make sure the seller gets a clear title
Residential real estate is the largest investment most people will make in their lifetime. Because real estate is expensive, it is important to always be guided by a residential real estate lawyer when buying or selling real estate. In New York, it is customary for the buyer and the seller to each be represented by a separate lawyer in the sale and purchase transaction.
How to choose a residential real estate lawyer
In choosing a residential real estate lawyer, you should consider the following two points.
First, choose a lawyer who is working in your real estate location. For example, if you would like to buy in New York City or Brooklyn, get a lawyer from that area because he would be more experienced working on condominiums, cooperatives, and apartments, unlike a residential real estate lawyer in White Plains whose experience is targeted towards single-family homes.
However, don’t choose a lawyer who is too overloaded with real estate transactions that he uses a standard approach to all closings. Even if residential real estate sales are similar, each transaction is different because a seller and a buyer might have a unique set of circumstances that might require the drafting of additional language in the purchase contract.
Although referrals are good, be wary of lawyer referrals of the brokers, because these lawyers may feel the need to push through with a transaction rather than considering your bests interests, just so that they could get future referrals again from the same broker.
Ultimately, it is important to find a residential real estate lawyer who you can trust and in whom you have confidence, who replies immediately and is accessible to confidently answer any questions you might have.
Second, ask for the lawyer’s fees. These fees normally range from $1,500 to $3,000 for an average closing transaction. This should include reviewing the transaction documents, due diligence, going to the managing agent’s office to read the building’s financials, minutes, and offering plan (if the building is less than 5 years old). You check also to see if the attorney’s fees are partially refundable if the deal does not go through.
The work of a residential real estate lawyer
Once you have decided to buy real estate, it’s important to get a residential real estate lawyer onboard from the start, rather than after you have made an offer. A residential real estate lawyer, in the initial stage, can already advise you on all stages of a purchase, from the best ownership structure to acquire the property based on your family status and long-term financial objectives (i.e., using an LLC, trust, tenancy by the entirety, joint tenancy with rights of survivorship, sole ownership, etc.) to going over deal terms before contract negotiation.
Once you have decided on a particular real estate property to purchase, your residential real estate lawyer will negotiate a contract of sale with the seller’s attorney. Some provisions to look out for are the return of the earnest money deposit if the sale does not go through due to financing or otherwise and the consequences in case the final walk-through reveals that the property’s condition has changed.
Your residential real estate lawyer will perform due diligence over the property. This includes ordering and reviewing a title report to see if the real property’s title is clean and unencumbered. If the report shows irregularities, the lawyer will attempt to resolve any clouds of the title with the seller and the title insurance company before closing. Other due diligence matters include reviewing the condo’s minutes, by-laws, financials, offering plans, and building’s rules and regulations to see if there are any problems in the building (such as persistent building leaks, gas issues, or pending increase in dues). The residential real estate lawyer will also review public records to see if the apartment is rent-controlled or rent-stabilized and if there are any violations at the Department of Housing, Preservation and Development (HPD), and if real estate taxes or HPD liens have been paid.
If you are financing the property with a mortgage, your residential real estate lawyer will assist you in preparing the mortgage application and reviewing the mortgage commitments to ensure all conditions in the commitment letter have been satisfied prior to closing. If you are buying a condo, your lawyer will ensure you receive the condo board’s waiver of the right of first refusal to purchase the condominium unit from the seller.
The lawyer will be with you in the final walk-through to see if there have been no changes to the property’s condition since contract execution and that the seller has made all the agreed-upon repairs. They will explain to you all closing costs, including real estate transfer and mortgage recording taxes, title insurance costs, real estate taxes, and other fees. During closing, your residential real estate lawyer will ensure all documents are executed and on hand to ensure a smooth transfer and will thereafter record the deed in the Department of Finance Registry in order to transfer the interest from the seller to the buyer.
Buying real estate is a major life investment. For this reason, it is important to get a lawyer, like us, to guide you through the entire process when making this important decision. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We are located in New York, NY. You can call us at 212-233-1233 or send us an email at [email protected].