PRECONTRACT:
The Binder
A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.
Most likely you will sign this document when first preparing your offer on a home purchase. The binder is presented to the seller with the first nominal deposit. The Binder outlines the Purchase Price, Financing Terms, Inspection contingencies as well as any other pertinent information specific to the contract of sale. Once the seller accepts there is essentially a meeting of the minds and the seller may keep your deposit in the case of a default.
The Inspection
A home inspection is a limited, non-invasive examination of the condition of a home, often in connection with the sale of that home. Home inspections are usually conducted by a home inspector who has the training and certifications to perform such inspections.
Your counsel will inevitably request and recommend that you have a licensed inspector inspect the home prior to deciding on whether or not to purchase.
The Contract of Sale
A contract of sale is a legal contract an exchange of goods, services or property to be exchanged from seller to buyer for an agreed upon value in money paid or the promise to pay same. It is a specific type of legal contract.
The contract of sale itemizes the understanding between both the the Purchaser and the Seller.The contract of sale usually contains all of the relevant contingencies for NY Title Insurance, Mortgage Commitment timing and terms, Termites, house inspection, Certificate of Occupancy and Violations.
Marketable Title
Title to real property which has no liens or encumbrances (mortgage, deed of trust, lien, or claim) and which is free of any reasonable objection.
Mortgage Commitment Contingency
A “mortgage contingency clause” is a provision in contract of sale that allows the buyer to terminate the agreement if he/she can’t qualify for a mortgage within a set period of time, such contingency allows the potential buyer to get their down payment back.
Termites Inspection
An inspection to determine whether a property has termite infestation or termite damage.
Certificate of Occupancy:
A document issued by the local town or municipality or building department certifying a building’s compliance with the applicable building codes and other laws, and indicating it to be in a condition suitable for occupancy.
Housing and Building Department Violation Search
A report of all pending violations of record with the housing and building departments in the municipality.
Fire Department Violation Search
A report of all pending violations of record with the local fire department.
Street Report
A determination of whether the street is public or private.
Emergency Repair Lien Search
A report from municipal records of costs incurred by departments within a municipality with regards to emergency repairs.
Extended Municipal Searches (NYC only)
Department of Highways, Air Resources, Fuel Oil Burner, Vault Search and Landmark Searches.
Violations
A notice that a property doesn’t comply with applicable provisions of law
The Closing (Settlement)
The signing of the official documents that actually transfer the property ownership. The Closing typically takes place at a formal meeting between the buyer, seller and their respective attorneys. More then likely the NY title insurance company will have a representative present along with the banks counsel when there is a mortgage. At the settlement, the buyer signs the mortgage (security agreement), note and any applicable affidavit of purchase while the seller receives payment for the property for the signing of the deed. Upon completion the NY Title Insurance company transfers title by recording the deed in the county recorder of deeds office.
Now that the transaction is complete your buyers counsel or the NY title insurance company should supply you with a copy of the Closing Statement which is essentially your receipt of closing demonstrating all of the financial aspects of the closing as well as photocopies of the documents you signed at closing.
Closing Costs
What fees you will be paying to the seller in terms of prorated items, bank fees for your financing, attorney fees, home owners insurance invoice, escrows for property taxes and insurance, county recordation fees, transfer taxes, mortgage tax as well as NY title insurance fees. An outline of such fees and the approximate costs of each are outlined above.
Title Related Expenses
NY Title Insurance
A NY title insurance policy guarantees the accuracy of the title search and protects against potential errors. Most lenders require the buyer to purchase a NY title insurance policy protecting the lender against loss (lenders policy) in the event of a title defect. This charge is included in the closing costs. A policy that protects the buyer from title defects, known as an owner’s policy, requires an additional charge. The actual NY title insurance policy charge is regulated filed rate by the insurers to the the state although the ancillary fees that a NY title insurance company will charge do differ from company to company.
Departmental Searches
Searches and certifications conducted and obtained by the NY title company of the municipals records to ensure that the property is in compliance with local ordinances affecting the real property
Mortgage Recording Tax
A New York State Tax to record a mortgage. This tax is usually paid by the borrower and varies by county. In New York City the fee is approximately 1.75%. See above for further breakdown for the applicable mortgage tax. You can also get a full detailed quote from our GFE Express Quote system which completely integrates the proper amount of mortgage tax.
Also for more information on mortgage tax and how to avoid the lion share of such during a NY refinance please read our page about how one can consolidate their mortgage financing with their last mortgage of record.
Mansion Tax
A New York State Tax on the sale of a residence over $1,000,000.00. This tax is typically paid by the borrower and is 1%.
Recording Fees
Charge by the recorder of deeds or county clerk to record a deed.
