New York has some of the country’s most unique real estate laws when it comes to both buying and selling property, particularly if you are planning on buying a co-op or condo. Accordingly, being familiar with New York’s real estate laws and how to buy real estate in NYC is the best plan for you if you are in the process of buying or selling a home.
In this article, we shall be discussing the following:
Selling a House or Property in New York State
Buying A Home In New York State
Unlike some states, when it comes to selling your own home in New York state and NY real estate law, it is customary to have a real estate agent to market and negotiate offers on the property, but also an attorney to prepare the contract of sale and to represent you at the closing. So you’ll want both, a real estate attorney in NYC and a real estate agent.
Having a real estate agent in your corner is crucial to selling your own home in New York state. The agent will advise you on “comps,” or the prices for which comparable homes sold, and help you to determine the price at which you should list your home. Your real estate agent will also advise you on marketing strategies such as staging your home or making repairs or other updates to improve your ability to sell at the highest possible price. They will arrange for photographs of your home, and use those photos in marketing materials, advertise your home in various places, including his or her firm’s website, local print, online newspapers and online real estate listings. Your agent will be responsible for showing your home to potential buyers, individually or at open houses, receive any offers from buyers, present the written offers to you, and negotiate with the buyers on your behalf on the basic terms of the deal.
These terms include the price offered, whether closing is contingent on the buyer obtaining a mortgage, and any personal property to be included, or fixtures to be excluded from the sale. Your broker will provide to potential buyers a one-page offer form, which varies from firm to firm, on which buyers will make their offer to purchase your home. Unlike other states, in New York, the offer form is not a legal document and does not obligate the buyer to go through with the purchase.
Once your offer is accepted, your agent will then verbally communicate your acceptance to the buyer, prepare a term sheet and circulate it to your attorney and the buyer’s attorney, and will accompany the buyers’ home inspector when they inspect your home.
Upon completion of the home inspection, your agent will then work with your lawyer to communicate with the buyer, negotiate any issues that arise in the drafting of the contract, and facilitate the scheduling of a closing.
When it comes to selling your own home in New York state, your attorney will prepare the contract of sale. Most seller’s attorneys start with a standardized form and then add a rider with additional terms to be negotiated with the buyers.
Once the attorneys have finalized the contract, you and the buyers will sign it, and the buyer will send your attorney a downpayment, which they may lose if they walk away from the deal without a reason contemplated by the contract. Typically, in New York State, the downpayment is for 10% of the purchase price, and your attorney will deposit this amount into an escrow account controlled by your attorney.
After the contract is signed, your real estate attorney NYC will need to do several things to prepare for a closing.
First, the attorney will review the title report ordered by the buyers’ attorney to see if there are any issues that must be resolved before a closing. These may include liens or violations against the property. Second, your attorney will prepare all of the closing documents, including the deed and transfer documents. Third, your attorney will calculate the amounts owed at closing, which may include NYC coop closing costs, New York condo closing costs, and condo closing costs NYC buyer.
If you have a mortgage, your attorney will request a pay-off letter to determine the amount owed to your lender. Your attorney will also calculate the closing costs that you owe and proceeds owed to you by the buyers.
Finally, your attorney will represent you at the closing, advising you on the documents that you are signing and making sure that all payments are accurately made. Since so much is involved and selling and purchasing a real estate property is such a large investment, when it comes to real estate law firms NYC and the best real estate law firms NYC, it is highly recommended that you hire a real estate attorney NYC who is knowledgeable and experienced in ny real estate law, the New York property condition disclosure act, NYC coop closing costs, New York condo closing costs, and condo closing costs NYC buyer.
New York law requires you, the seller, to disclose known home defects to the buyer. Under real estate laws in NY state, you, as a New York home seller, could be found liable to a buyer for having failed to disclose certain property conditions, or defects, in the course of the sale.
Under the New York Property Condition Disclosure Act or PCDA, the seller is required to make these disclosures to the buyer or else pay a $500.00 penalty to the buyer at closing. While the PCDA requires you to complete a standardized disclosure statement and deliver it to the buyer before the buyer signs the final purchase contract, in practice, most home sellers in New York opt not to complete the statement and instead pay the credit. However, just because the seller pays the $500.00 credit instead does not mean that the seller is still not liable to the buyer for not disclosing under the PCDA. If there is a known defect that is not disclosed by the seller, the seller may still be liable to the buyer for any loss sustained as a result of that non-disclosure.
Sellers must disclose known housing defects. If the seller passed information about the property to the buyer that the seller actually knew was false, or if the seller omitted material facts about known defects, the seller may be liable to the buyer for damages; but only if the misinformation, or omitted information was material to the buyer’s decision to purchase the property. This may include termites, rat infestation, mold, or significant damage to the floor, walls, or roof. Although the buyer may not request for such information, the seller must disclose the information.
These disclosures will be a standard form disclosure statement, required by the PCDA. They address the following areas:
Although under NY real estate law, the seller must disclose any and all known housing defects, the seller is not legally obligated to hire an investigator or home inspector. It is the duty of the buyer to hire a home inspector when they perform their due diligence in investigating the house, and it is therefore highly recommended that the buyer do so.
When it comes to the seller’s disclosure statements, the language of the disclosure statement reminds the buyer that it is not a warranty or guarantee from the seller regarding the condition of the property, and is not intended to substitute for any of the inspections, testing, or other research generally recommended to buyers.
The seller’s real estate broker, agent, or sales person will provide the seller with a copy of the standardized form disclosure statement. They are also required to share this information with any non-represented buyer. In fact, if they fail to inform you, or the buyer, about the PCDA, they may also be liable for this violation.
The seller completes the disclosure statement by answering the questions and explaining any known defects in detail in the space provided on the form, or on a separate sheet of paper that you may attach. Then, the seller signs the certification located near the bottom of the last page. The seller’s signature means that their answers, and any explanations on or attached to the form, are true and complete to their actual knowledge as of that date.
The completed and signed disclosure statement should be delivered to the buyer before the buyer signs the final purchase contract. A copy of the completed form should be attached to the final, signed purchase contract.
According to the PDCA, if the seller does not submit the disclosure statements to the buyer, they have to pay a statutory fee of $500.00 to the buyer. Some sellers find that the disclosure statements are too cumbersome and just voluntarily pay the $500.00 in lieu of the disclosure. However, the seller can still be liable to the buyer for failure to disclose pursuant to the PDCA.
If you, the seller, are found liable to the buyer for a “willful failure to perform” the requirements of the PCDA, you may be required to pay the buyer’s actual damages caused by the defect.
If you are selling a house built before 1978, you must comply with a federal law called the Residential Lead-Based Paint Hazard Reduction Act of 1992 (U.S. Code § 4852d), also known as Title X. You must:
As a penalty for failure to comply with Title X requirements, the buyer has the right to sue you for triple the amount of damages actually suffered.
When it comes to NY real estate law and buying a house in NY state, you’ll want to select from the top real estate agents in New York. Although you are not required to use a buyer’s agent when purchasing a home, many buyers hire one to help them find a home and guide them through the process of making an offer, the steps to buying a house in New York state, and know how to buy real estate in New York city. A buyer’s agent can help identify and show you homes that meet your requirements, advise you on “comps,” or the prices for which comparable homes sold. They will help you to determine the price at which to make an offer, and negotiate with the sellers’ agent on your behalf on the basic terms of the deal. These terms include the price offered, whether closing is contingent on you obtaining a mortgage, and any personal property to be included, or fixtures to be excluded, from the purchase.
Your agent can also help you to fill out a one-page offer form provided by the sellers’ agent, which varies from firm to firm. Once a seller has accepted your offer, your agent will accompany your home inspector when he or she inspects your home, advise you of any problems identified, work with your lawyer to communicate with the sellers, negotiate any issues that arise in the drafting of the contract, and facilitate the scheduling of a closing.’
Your agent should also be familiar with NY real estate commission law, be familiar with NY real estate law, real estate laws in NY state, and can answer NY real estate law questions. However, to truly be safe, it is highly recommended that you hire your own real estate attorney NYC to represent you, advocate on your behalf, and answer your NY real estate law questions.
When you’re purchasing a home in New York and selecting from top real estate agents in New York and from real estate law firms NYC, you’ll want one who is familiar with real estate laws in NY state and who can answer NY real estate law questions. Some of the most important legal questions are related to the seller disclosure requirements. Under the New York Property Condition Disclosure Act or PCDA, the seller must disclose all known defects to the house in the form disclosure statements. Failure to do so will result in the seller automatically owing the buyer $500.00 at the closing. Furthermore, even if the seller pays the $500 and in lieu of disclosure, the seller may still be liable to the buyer for any damages resulting from the lack of disclosure. The seller, however, is not required to hire a home inspector or investigator. Again, the seller is only required to disclose known defects of the house.
Buying a house in New York state is a very life changing process, and one of the major steps to buying a house in New York state is the home inspection. A home inspection could uncover problems inside the walls and under the floors, whether the plumbing and electrical systems are up to code, whether the appliance has been properly installed, and much more. The buyer bears the cost of a home inspection. If you choose to have one, the inspection must be completed before a contract is signed. You can find an inspector by visiting the website of the American Society of Home Inspectors or the New York State Association of Home Inspectors, or asking for referrals from friends, colleagues, your agent or attorney.
Your real estate attorney NYC and your agent should be familiar with submitting offers and contracting procedures. Under the real estate laws in NY state, a contract for the sale for real property must be in writing; thus a verbal offer creates no binding obligation upon either party. If your offer is accepted, you’ll need to contact a real estate attorney NYC to proceed with the sale. If your offer is rejected, either make a counter-offer or move on to a different property. Do not put anything in writing, as this may, unintentionally, create a binding contract. Oftentimes the real estate agent will request that you sign an “offer” or even a “contract.” Do not do so without speaking to a real estate attorney NYC.
Furthermore, if you intend to submit some type of a non-standard offer or non-traditional offer, then you definitely want to consult a real estate attorney NYC before the offer is submitted, so they can draft it properly in writing. Failure to do so may result in your offer being rejected because it wasn’t communicated properly, or worse yet, being accepted and since your offer wasn’t drafted properly, you’re negatively impacted.
It is customary for the seller’s attorney to prepare the Contract of Sale. The job of the Buyer’s attorney is to review the contract in detail and make sure that it’s safe to sign for the buyer and make the necessary changes. The buyer’s attorney will mail all four (4) copies of the contract, along with your down payment check to the seller’s attorney. Assuming the seller agrees to the buyer’s changes, he/she signs all four (4) copies of the contract and mail the buyer’s attorney back two (2) fully executed copies.
Upon receipt of the fully executed contract, the buyer’s attorney will forward a copy to you, the buyer, that you may begin your mortgage application process.
Please note that the down payment can range from 2% of the Purchase Price to 10% of the purchase price. In New York, it is typically 10%. The job of the buyer’s attorney is to ensure that your down payment is protected if you cannot get a mortgage and either eliminate or protect you against liquidated damages if the deal doesn’t close.
When it comes to buying a co-op in NYC, can foreigners buy a co-op property in New York? Yes, a foreign citizen can purchase property in the U.S. However, co-operatives (co-ops) can be very difficult for foreigners to buy. When you buy a co-op apartment, you are not buying the apartment itself, but rather shares in the corporation that owns the building. In exchange, the corporation will grant you a proprietary lease to occupy the apartment. When it comes to foreign citizens, co-ops are perhaps not the best type of property for a non-US citizen, since co-ops usually have many restrictions, including subleasing.
Co-op boards interview all purchasers, regardless of their nationality, and are legally able to accept or reject a buyer without any reason. Accordingly, it is important to have an effective real estate lawyer NYC in your corner to go through the co-op purchase contract and consult with you on how to purchase a coop in NYC.
Before you purchase a co-op, the co-op contract will set forth the steps you must take to obtain the co-op board’s consent and any deadlines for completing those steps, as a contingency before the deal can close. Your real estate attorney NYC should be familiar with these steps and make sure that the steps are adhered to.
Most co-op contracts include a clause stating that you examined, or waived your right to examine, the corporation’s documents before signing the contract. Those documents may include the offering plan, certificate of incorporation, bylaws, proprietary lease, house rules, minutes of shareholders’ and directors’ meetings, most recent audited financial statements, and most recent statement of tax deductions available to the corporation’s shareholders.
You do not want to waive this right and your attorney should review these documents thoroughly before you sign the contract, in order to assess the corporation’s financial health and the building’s physical condition.
Lastly, the seller should make various representations in the contract as to the condition of the specific co-op apartment that you are purchasing. These representations should include that the unit is free of leaks and bedbugs and that appliances will be delivered at closing in working order.
If the seller refuses to make one or more of these representations, consider this a red flag that a problem may exist and you must investigate further. Your real estate lawyer NYC should probe the seller’s lawyer or broker to find out if there may be a defect in the apartment.
It is customary in New York for the seller’s attorney to prepare the first draft of the contract of sale. Most seller’s attorneys start with a standardized form and then add a rider with additional terms to be negotiated with the buyer. Your attorney likely will also add an additional rider to the contract with terms to be negotiated with the seller.
Once the attorneys have finalized the contract, you and the seller will sign it, and you will send the seller’s attorney a downpayment, which you may lose if you walk away from the deal without a reason contemplated by the contract. Typically, in New York State, the downpayment is for 10% of the purchase price, and the seller’s attorney will deposit this amount into an escrow account.
After the contract is signed, your attorney will need to do several things to prepare for a closing. First, the attorney will order a title report to see if there are any issues that the seller must resolve before a closing. These may include liens or violations against the property.
Your attorney will work with you to provide information and documents requested by lenders in connection with your mortgage applications. Third, your attorney will calculate the amounts that you will owe at closing to the seller, the seller’s lender, and the title company, among others.
Finally, your attorney will represent you at the closing, reviewing and advising you on the documents that you are signing, such as the deed, transfer tax returns and mortgage documents, and making sure that all payments are accurately made.
At Law Office of Yuriy Moshes, we are experienced and knowledgeable and are one of the top real estate law firms in NYC because we keep up-to-date with the NY real estate law blog, NY real estate commission law, and NY real estate law. We represent both buyers and sellers in the greater New York City area including all its boroughs, including Manhattan, Brooklyn, Queens, the Bronx, and Staten Island) as well as Northern New Jersey, Long Island, and Upstate New York. If you’re selling or purchasing your home, you need to consult with the best real estate law firms NYC.