CGBR President Karen Davala penned an article in a recent edition of the Hudson Register-Star, offering consumers some insights into routine and unusual legal issues that can arise during negotiations for a property purchase. From inspections to property deeds, there are proactive steps buyers and sellers can take to ensure a smooth transaction.
Read the article online or read it here.
Legal Tips for Buyers and Sellers
By Karen Davala
If you are considering buying or selling a home, understanding key legal angles of your transaction can ensure a smooth process, with minimal hassle. Property deals involve contracts, banks, mortgages, inspections, title searches, potential zoning issues and paperwork loaded with fine print and legalese.
A good attorney will protect your interests by making sure that the details are in order. After all, the devil is often in the details — and New York State strongly recommends that buyers hire an attorney.
A review of key legal issues for buyers and sellers, from Hudson-based attorney Vincent Mackowski — an affiliate member of the Columbia-Greene Board of Realtors — from the state attorney general and from other state-specific homebuyer resources, turned up a number of key tips for buyers and seller, to strengthen their awareness of real estate law.
Here are some tips to raise your real estate law awareness.
Hire locally. Locally-based real estate lawyers typically know each other, work together collegially and have established routines for drafting contracts and resolving any unforeseen issues. These connections can pave the way to a smooth closing.
It’s contingent. Most contracts have contingencies — conditions that must be met in order for a transaction to proceed. For instance, most contracts are contingent upon a property inspection, mortgage approval and a clean title. Your transaction may also be contingent upon first selling your own home, or other factors. Any contract is negotiable over the course of the buying and selling process.
Property Condition Disclosure Statement — to sign or not to sign? In New York State, sellers must complete a property disclosure document stating known defects to the property. However, this disclosure can lead to a post-purchase dispute if the buyer finds a property defect he or she believes was not properly disclosed up front — termites, faulty wiring, etc. Many attorneys view this disclosure statement as a liability for the seller, and recommend against it. Instead, the seller can give a $500 credit to the buyer at the closing –doing so could protect the seller from post-closing disputes regarding property condition. In New York state, certain types of newly built homes and cooperative apartments are exempt from disclosure rules.
You want to do what? Inform your real estate representative — and your attorney — how you plan to use your property. Will you have a home office? Will you be raising farm animals, or creating a two-family house? Selling off parcels? Operating a home office? Your Realtor and attorney will explore any zoning or title issues that may impact your plans.
Occupancy permit. A frequent stumbling block involves a seller’s certificate of occupancy — or lack thereof. For instance, if the seller constructed a deck or an addition five years ago, and the building permit was not properly completed with a certificate of occupancy, the closing can be delayed. A title search typically includes a request to the municipality, to seek out any such glitches, but it helps to ask the seller about any property improvements.
Oil underground. Old oil tanks, which were commonly installed underground back in the day, can pose a big problem for buyers and sellers. These tanks must be removed buy the seller, and it can be costly. If the tank or surrounding property shows signs of oil contamination, insurance may or may not cover the damage.
Are old mortgage records complete? If a seller refinanced his or her property at one time, the prior bank may have neglected to file documents showing the payoff of an original mortgage. It’s a common issue nowadays, and property buyers and sellers owners are encouraged to hold onto copies of all closing documents. They may come in handy 10 or 20 years from now.
Early move in? What if your buyer wants to move in a week or so before the closing — or the seller wants to stay for a few weeks after? There risks involved in these agreements, and attorneys will make sure everyone is informed; some will recommend against it entirely. What’s vital, however, is for property occupant to have homeowner insurance in place while living in the house.
The typical property transaction is fairly smooth, but with so many legal and logistical variables, a transaction can be delayed. Patience, flexibility a good Realtor, and a good closing attorney can minimize problems and get you into your new home — or out of your old home — as soon as possible.
Karen Davala, GRI, SFR, is president of the Columbia-Greene Board of Realtors and owner of Davala Real Estate LLC