Practice Areas: Real Estate

Real Estate

In the era of high volume and specialization, many firms employ cadres of paralegals and clerks to handle real estate matters. In fact, in many firms, the first and only time the client interacts with an attorney is at the closing. At Soffer, Rech & Borg, LLP you deal with an attorney at all times, from the initial interview through and including the closing.

Our goal is to provide our clients with personalized service in all aspects of their purchase or sale, from our initial review of the contract to the day of closing. We work with you, your real estate agent and your mortgage lender to make certain your transaction is closed efficiently and on schedule.

It is our intention to keep the client fully informed throughout the process of the real estate transaction. The information set forth below is specifically designed both to answer questions in advance of your initial meeting with our office and to assist you in forming questions for us to address at that meeting.

Buying a home is not only the most significant and largest purchase you will likely make, it also involves the LAW OF REAL PROPERTY which is unique and can create unique problems. A lawyer is trained to deal with these problems and often has the most experience to deal with them. This applies to people selling a home or buying a home.

The typical home purchase transaction begins when the seller enters into a brokerage contract with a real estate agent, this is usually in writing. When the broker finds a potential buyer, negotiations take place with the broker acting as an intermediary. This is how the broker earns their fee. Once an informal agreement is reached, buyer and seller enter into a formal written CONTRACT.

The CONTRACT usually provides a reasonable period of time for the buyer to obtain a mortgage commitment. The title is researched both to insure that the seller truly owns clear title to what he or she is attempting to sell to the buyer as well as to satisfy the mortgage lender. Finally the CLOSING takes place. At the CLOSING the property is transferred from the seller to the buyer and the seller receives the purchase price bargained for in the contract.

Real Estate FAQ's

WHY DO I NEED A LAWYER?

A seller without the advice of a lawyer, may sign a brokerage agreement that he or she does not truly understand. The seller may become liable to pay a brokerage commission even if a sale does not occur or be liable to pay more than one brokerage commission. Some issues requiring expert legal advice are: (i) does the agreement offer the seller the right to negotiate on his or her own behalf; (ii) what is the effect of multiple listings; (iii) what are the broker's rights if the seller withdraws the property from the market, or can't deliver good marketable title; (iv) how long should an exclusive listing last?

The seller should have the advice and guidance of an attorney with respect to a brokerage agreement. Even if the agreement is a so called "standard form", its terms should be explained to the seller and revised, if necessary. An attorney is also necessary to determine if the agreement was properly signed.

Even though a lawyer may not be needed during the course of negotiations, the buyer and seller each may have to consult with a lawyer to answer important questions, such as the tax consequences of the purchase or sale. Aside from the tax consequences, the buyer and seller may have questions about the date set for closing, issues of occupancy; fixtures and personal property; and loss due to fire or other casualty. These are some of the many questions that may need to be considered during the negotiation stage in order to avoid disputes when a written contract is prepared. An attorney is also helpful in explaining the nature and amount of closing costs.

WHAT IS THE LAWYERS ROLE IN NEGOTIATING THE TERMS OF THE CONTRACT?

The formal written contract for the sale and purchase of a home is the single most important piece of paper in the transaction. Although printed forms are useful, a lawyer is once again necessary to explain the form and make changes and additions for a particular transaction to reflect the understanding of the buyer and the seller. There are many issues which must be addressed in the written contract. A good example of such an issue is what to do when the seller cannot move out of the property until after the purchaser's mortgage commitment expires. The lawyers experience in resolving issues such as these could determine whether or not a particular transaction closes.

There are many other legal questions that must be addressed in the contract, including the following. If the property has been altered or there has been an addition to the property, was it done lawfully? What happens if a buyer has an engineer inspect the property who finds termites, asbestos, radon or lead based paint? What are the legal consequences if the closing is delayed or does not take place and what happens to the contract deposit? Will the contract deposit be held in escrow by a lawyer in accordance with appropriately worded escrow instructions? Is the closing appropriately conditioned upon the buyer obtaining financing? How are checks to be drawn at the closing? These are but a few of the many questions that arise with respect to a contract.

WHAT IS THE LAWYERS ROLE IN CONNECTION WITH FINANCING THE PURCHASE?

Most buyers finance a substantial portion of the purchase price with a mortgage loan from a bank or other lending institution. The contract should contain a carefully worded provision that it is subject to the buyer's obtaining financing. Printed contract forms are generally inadequate to incorporate the real understanding of the buyer and seller without changes being made. Lawyers are necessary to review and explain the importance of these various provisions.

WHAT IS THE LAWYERS ROLE AT THE CLOSING?

The closing is the event which is the grand finale of the purchase and sale transaction. The deed and other closing papers must be prepared. Title passes from seller to buyer who pays the balance of the purchase price. Frequently, this balance is paid in part from the proceeds of a mortgage loan. The attorney is helpful in explaining the nature and amount of closing costs. Final documents including the deed and mortgage instruments are signed. The attorney is necessary to assure that these documents are appropriately executed and thoroughly explained to the various parties. Subsequent to the closing, a closing statement memorializing all aspects of the transaction is prepared indicating the debits and credits to buyer and seller. Since a real estate transaction may have certain tax consequences, the closing statement is essential for tax computation purposes for both buyer and seller.

The closing process can be confusing and complex to the buyer and seller. Those present at the closing often include the buyer and seller, their respective attorneys, the title closer (representative of the title company), attorney for lending institution and real estate broker. Documents need to be recorded; various transfer taxes need to be paid, and provisions for insurance and other incidents of ownership need to be concluded. There may also be last minute disputes about delivering possession and personal property or the adjustment of various costs, such as fuel and taxes. Here a lawyer's advice and guidance is essential.

Condominiums, cooperatives and homeowners associations involve forms of ownership that are treated as securities under New York State law and require special documents that are complicated and should be reviewed by an attorney. Condominium declarations, proprietary leases, and "by laws" are but a few of the complex documents confronting buyers of these forms of property ownership. The tax deductions and consequences with respect to the purchase of a condominium or cooperative also need to be explained by a professional that is familiar with these common ownership forms.

WHAT IF I RUN INTO PROBLEMS WITH MY BROKER?

Licensed Real Estate Brokers in New York State must do more than merely introduce the buyer to the seller to earn their commission. Michael A. Borg has successfully litigated that point before the Supreme Court of the State of New York, Appellate Division, Second Department. In Ormond Park Realty, Inc., v. Round Hill Development Corp., et. al., 699 N.Y.S.2d 116, the leading case in New York State on this subject, it was held that broker is entitled to recover a commission only if he establishes: (1) that he or she is duly licensed, (2) that he or she had a contract, express or implied, with the party to be charged with paying the commission, and (3) that he or she was the procuring cause of the sale.

Any issue which you may have with your broker should be brought to the attention of your attorney at once. A lawyer's advice and guidance is essential from the time you decide to sell or to buy a home until the actual closing. It is obvious that throughout the process the interests of the buyer and seller will conflict. The broker generally serves the seller and the lender is obtained by the buyer. The respective lawyers for buyer and seller will have no such conflicting loyalties and will serve only their clients' best interests. That is why you need a lawyer.