Sale of Residential Property

Queens Attorney Guiding Real Estate Sellers Through Transactions

It is important for people selling residential property to retain an attorney to prepare the sales contract and represent them at the closing. Numerous complicated legal issues may come up during the sale of a home, and a seller must be prepared to address those issues should they arise. Queens real estate lawyer Shane D. Scott can advise you on a sale of residential property.

The Sale of Residential Property

The first step in the sales process is for the buyer to offer to buy the home for a certain price and for the seller to accept that offer or counteroffer. Usually, you only need to communicate the acceptance orally. Neither the seller nor the buyer is bound to move forward at that point, even though there has been an offer and acceptance. A real estate sales agreement will need to be prepared and executed. Moreover, the buyer may wish to conduct inspections of the property and may change his or her offer price or ask the seller to repair the property.

The Real Estate Purchase Agreement

The first draft of the real estate purchase agreement is customarily prepared by the seller’s attorney. The buyer’s attorney may also have input into the purchase agreement; the buyer may want to have certain contingencies built into the contract. For example, the sale may be contingent on the buyer securing a mortgage.

The final contract will specify the terms of the sale, including the property description, price, closing date, contingencies, and dispute resolution method. In New York, the closing date may not be firm, and the parties can obtain a reasonable postponement. However, when the parties wish to have a firm date, that may be specified in the contract with the line “time is of the essence.”

Once the final contract is drafted and executed, there is a 72-hour period during which both the seller and the buyer can consult an attorney and agree to any changes. In some cases, one side notices a reason not to go forward, and in that case, either the buyer or the seller can still void the contract within the 72-hour review period.

After the seller and the buyer both sign the contract, the buyer must send the seller’s attorney a down payment, which usually represents 10% of the purchase price. The seller’s attorney deposits the amount in an escrow account. In the contract, it may specify that you can keep the down payment as liquidated damages if the buyer walks away and cancels without cause.

Disclosures

Historically, sellers did not have a significant duty to disclose problems with a home. However, sellers now face some risk of liability for defects. Furthermore, if you know of a defect in the home and actively conceal it, you can be held liable to the buyer for damages caused by the defect. Active concealment occurs if a seller knows about a defect but fails to disclose it and interferes with inspection efforts.

Under the Property Condition Disclosure Act, sellers are supposed to make certain disclosures under the law through a standardized disclosure statement, or else a credit of $500 must be paid to the buyer at the closing. Disclosures will need to be made regarding environmental, structural, and mechanical systems and services, as well as any systems, such as plumbing or air conditioning, or property components with known defects. Sellers need to disclose known defects, but you do not need to specially investigate or inspect.

Escrow

Escrow is the period between the signing of the agreement and the closing. During escrow, the seller’s attorney will need to resolve issues like liens and prepare the closing documents. Generally, a seller needs to cooperate with the buyer’s needs as set forth in the contract, including inspections or appraisals.

Once a title report is generated, it may be necessary for the seller to resolve outstanding issues prior to the closing. For example, if there is a lien or violation against the property, it may need to be resolved.

Closing

Certain documents must be prepared for the closing. At the closing, certain amounts will be owed, including closing costs and the buyer’s funds. For example, there may be coop or condo closing costs. It may be necessary to request a pay-off letter from the mortgage lender to determine what is owed.

Consult a Real Estate Lawyer in Queens

A sale of residential property may bring up complicated legal issues. Failing to address those issues can lead to trouble down the road. If you are considering a sale of residential property in Queens, you should consult the Law Offices of Shane D. Scott. Call us at (800) 230-0744 or complete our online form.