We are right in the beginning of home buying/selling season and for those of you who have bought/sold your home, you know it can be a hectic process with all of the paperwork, coordination, and confusion that can take place. Following are some tips and reminders that can help eliminate some of the confusion for those of you who will be buying or selling your home.

First, if you are planning on hiring your an attorney to assist you with your real estate transaction, it is always a good idea to have a conversation with him/her prior to signing the purchase contract. It is generally an unpleasant surprise for a signed purchase contract show up at your attorney’s office without having discussed it first. Discussing the transaction prior to signing the contract can streamline the process whether it be a buy or a sell. More importantly, there are very quick deadlines for attorney approval, usually 3 business days. If that time passes, then the contract is generally deemed approved and an attorney will have a difficult time amending any terms, if he/she is able to do so at all.

Another helpful tip to make the process go more smoothly if you are selling your home is to try and locate your abstract of title and survey. If you cannot easily locate it, then your attorney should be able to help you with this.

For home buyers, you will want to remember that a pre-approval is different than an actual mortgage commitment. Your pre-approval is something that you will want to have prior to looking for a home and enlisting the help of a real estate agent. The mortgage commitment is something that you get from your lender once you know what home you will be purchasing. It generally has a number of contingencies that must be completed before the lender will clear you to close.

In general, sellers must be moved out of their home on or before the date of closing. This means that all personal items are out of the home and the home is in “broom swept” condition. All hazardous materials must be out of the house as well, this generally includes old paint.

The seller will also want to make sure that they do a water/electrical meter reading before vacating the property. The buyer will want to be sure to change the utilities to their name on the day of closing.

The buyer will want to do a final walkthrough of their new home as close to the closing as possible, I usually recommend within 24 hours of the time of closing.

Hopefully these tips come in handy and help your buy/sell go as smoothly and stress-free as possible.

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

Problems at Closing

The closing is scheduled.  Finally, there is a light at the end of the tunnel.  If you are selling your home then this means that you are likely in the process of packing up all of your junk belongings that have accumulated over the years.  If you are buying a home then you have survived jumping through all of the hoops to ensure you have the funds present on the big day. 

By the time the closing day arrives then any issues regarding the home or title of the home should have been addressed long ago so that the only thing left to do is sign your life away if you are the buyer or collect your proceeds if you are the selling party.  Most closings do indeed function this way.  However, very often an issue arises that needs to be addressed at the actual closing. 

Generally, the problems that arise at the closing involve issues with the actual house (i.e. broken window, lawn not mowed, rug stain, etc.).  These problems are things that arose after or were not addressed by the home inspection and are usually found at the time of the final walkthrough.  On a side note, buyers should always schedule their final walkthrough as close to the actual closing as possible to avoid any surprises.

Any issues that are discovered after the home inspection should be disclosed to your attorney immediately.  The last thing that any of the parties involved in the transaction want is to be surprised by issues at the closing.  The more time in advance the issues are known and disclosed to all parties, the more time there is to come up with a solution that all the parties can agree to. 

A common solution to deal with a problem at closing may be for the buyer to hold back a portion of the proceeds in escrow until the problem is resolved.  For instance, if an electrical problem is disclosed by the seller at the final walk through, it may be reasonable for the buyer to hold back some money until it is determined exactly what the electrical problem is and get an estimate for how much it will cost to fix the problem. 

Many, many issues can arise near closing, the most important thing that you can do, especially as a buyer, is alert your attorney as soon as the issue is known so that it can be addressed immediately.  Once the buyer signs the papers, fixing the problem can become exponentially both time consuming and expensive

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

When a new real estate purchase contract shows up on my desk I review it for approval and take note of some important dates that are found in the contract. These include when the contract needs to be approved by, when the home inspection and any other tests need to be completed by, when the buyer needs his/her/their mortgage commitment letter by, and finally, when the all-important closing is supposed to take place.

Generally, depending on any number of circumstances (type of financing, other contingencies, etc.) the closing date gets set a month or a month and a half after the contract date. In my experience all the parties involved in the transaction (buyers, sellers, realtors, attorneys) try their best to get everything set to close as close to the contract date as possible. However, inevitably some unforeseen circumstance or problem arises that makes scheduling the closing for the contract date impossible.  

What most people do not realize is that most residential real estate contracts call for a closing “on or about” a certain date. This means that the closing does not have to be scheduled on the exact closing date found in the contract. Rather, it gives a time frame that usually means 10-15 days on either side of the date listed. This is done so that if a problem arises or if the buyers have not been cleared to close by their lender, then all of the parties have some flexibility. The other type of closing date that can be set is called a “time of the essence” clause. This means that the closing must take place on or before the specific date set in the contract. These types of clauses are not generally found in residential real estate contracts as the default contract is “on or about.”

Here are a few helpful reminders when entering into a real estate transaction and setting a closing date: 

Don’t schedule the movers too far in advance

Don’t schedule a vacation too close to the closing date

Be flexible

When buying or selling a home, you need to have a little flexibility when it comes to scheduling the closing.  Remember, everyone is generally trying to reach the same goal in a real estate transaction, but issues arise and the closing date may need to be moved. If you factor in a little flexibility then everything should go a lot smoother.

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

An issue that frequently arises early on in real estate transactions is when the seller wants to sell their home “as is” and the buyer wants to have a home inspection.  More often than not these seemingly adverse positions can lead to the contract needlessly falling apart. Having been on both sides of this conundrum I am here to tell you that the home can be sold “as is” by the seller and the buyer can have a home inspection too.

Generally, a home inspection is always a good idea for prospective buyers. When home buyers are not permitted to get a home inspection more often than not the deal will fall through because the buyer wants to know what he/she/they are spending their life savings on. Also, buy not allowing the buyer(s) to get an inspection, it makes it appear as though the seller has something to hide.

Just because a home inspection shows some problems with the house does not mean that prospective buyers will back out of the deal. They can then weigh their options and their finances against how much they want to buy that specific house.

The “as is” part of the deal comes into play because the seller does not need to remedy the problems or give the buyer(s) any credits or reduction in purchase price because a home inspection comes back as unsatisfactory.

Ultimately, a revealing home inspection may help the seller in the long term for two reasons.  First, if a major problem is shown to exist, the seller may need to adjust the asking price to take into account the defect.  Second, the seller may be able to save hundreds of dollars in inspection costs if they are able to obtain a copy of the buyer’s inspection report.

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

Being able to locate your abstract of title and survey can save you hundreds of dollars when it comes time to sell your home.  The abstract of title is a bound packet of documents that show the chain of title for your property.  When you sell your house it is generally required that you produce the original abstract.  If you do not have the abstract then a new one must be created which can cost hundreds of dollars.

For most of us, buying and selling our home is something that does not happen very often and may only occur once or twice in our lifetimes.  This can make it difficult to locate important documents when it comes time to sell the home 10, 20, or 30 years down the road.

When buying a home, there is generally another entity (i.e. attorney or bank) that will walk guide you through the process making sure that all the pieces of information get gathered.  At the end of the home buying process the new home owners will get a packet of important information.  Besides bank documents (copy of note & mortgage, etc.) there may be a copy of the deed, survey, and abstract of title.  If you kept the packet of documents in a safe place and you remember where the safe place is, then great you get a gold star.

However, if you do not have a copy of the abstract all is not lost as you may not have been given the abstract to hold.  One trick for locating your abstract is to review the documents from the closing.  The lender likely had a title insurance policy (and maybe you had an owner’s policy) and some documents (HUD-1 or Statement of Sale) may have the title company’s name on it.  It is a good bet that they would have the abstract.  Also, if you had an attorney then your attorney may have a copy of the abstract as well.  A copy of the survey is also helpful and can save time and money because if there were no significant changes to the property then all you may need is for the survey to be re-certified rather than completely reconstructed.  This can also save a few hundred dollars and help you realize the full value of your home at sale time.

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

Thinking of buying your first home?  Just finished buying your first home?  Well, there is a huge difference between the two.

In the first instance the person/people are full of hope, excitement, and a whole host of other, mainly positive feelings.  The second group, those who have just finished with the process of purchasing their first, second, or third home, may be feeling a bit different.  Probably tired, frustrated, and a bit relieved.  Certainly, if the second group hired an attorney, they may be a bit less tired and frustrated, and a bit more relieved.  One of the last things on most people’s minds after the sometimes lengthy process is what documents are important enough to keep in a safe place for a long time.

Anyone that has purchased a home before knows that there is a lot of paperwork involved.  If you are getting a mortgage through a lender, then the paperwork can be overwhelming from the start to the finish.  It can seem like eons before the closing takes place, and that is if everything goes smoothly.  If a bank is involved, the closing will involve a stack of papers to sign.

At every closing that I have been to where a mortgage is involved, the bank attorney gives the home buyers a package that contains an original copy of important papers.  This package will include a copy of 2 very important documents, the Note and the Mortgage.  The Note is the homebuyers’ promise to pay the loan back to the lender, and the Mortgage is the lender’s security interest in the property if the home owner fails to pay the loan back.

There are some other important documents that home buyers should be aware of as well.  These include copies of the deed, survey, statement of sale, HUD-1, and the abstract of title.  The survey and abstract are important to hold on to and should be able to be located in the future in the event that the home is sold. By being able to locate these documents at the time the home is being sold, people selling their home can save themselves hundreds of dollars by avoiding the need for a new survey or creating a new abstract.

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.

So you’ve just finished putting your John Hancock on a pile of documents about five inches thick after what seemed  like an eternity from when you first set eyes on the house of your dreams.  It is also likely that the Truth in Lending Statement that the bank is required to produce so you can see how much that “dream house” is actually going to cost over 30 years, is burned into your memory.

At this point your attorney may lean over and ask if you are interested in purchasing a title insurance policy for your home and shows you yet another document with a lot of big words in tiny font, and of course a place for your signature as well as another opportunity for you to write a check.  You may think to yourself, “wait, didn’t I see a statement in that pile of papers that showed a title policy that I paid for?”  The answer is yes you did, however, that is your lender’s title policy.  Before we get ahead of ourselves, let’s first answer the burning question of what exactly is a “title insurance policy.”

A title insurance policy in a residential real estate transaction is a type of indemnity insurance that insures against defects in title for real property that may arise in the future, or to state another way, an insurance policy that will protect against any future claims by parties that they have an interest in your property.  The policy will defend against lawsuits from persons or entities that claim to have a right to the property and will reimburse the insured for any actual monetary loss incurred.

It is a 100% certainty that if you needed a loan to purchase your new home and that loan came from a bank, the bank required a title insurance policy and it was added to your closing costs.  So why would you then need to purchase another title insurance policy?

The policy that was purchased was the lender’s title policy and protects the bank’s interest in the property.  Your attorney is asking if you would like to purchase an owner’s policy that protects your interest.  Chances are at this time your financial interest in the property is fairly small as most home buyers only put a fraction of the purchase price down.  However, as time goes on and your equity in the house grows, your financial stake in the property increases.  An owner’s title insurance policy would protect this interest.

So, is it a good idea to whip that checkbook out and write yet another check in the pursuit of home ownership?  The answer is that it depends on the circumstances.  Almost all title issues are cleared up prior to the closing or else the bank would not release the funding and the title company would not insure the property.  However, it is important to remember that a title insurance policy will insure against many hidden defects that even the most thorough title review would not reveal (i.e.  deeds executed by minors or mentally incompetent persons, forged instruments, corporate instruments executed without the proper corporate authority and errors in the public records).

Christopher Stringham

Email: cstringham@mcvlaw.com

Phone: 315-471-1664

Christopher Stringham graduated from Western New England College School of Law in 2010 and was admitted to the New York State Bar as well as the United States District Court, Northern District of New York in 2011. He is a member of the New York State Bar Association, Onondaga County Bar Association, and the Injured Workers’ Bar Association of New York. He has been a member of Meggesto, Crossett & Valerino, LLP since October 2010.