Finding a Buyer, Accepting Their Offer & Hiring a Real Estate Attorney
When you’ve found the right buyer, who has made an acceptable verbal offer, it is time to move towards a binding contract. Before you proceed to this step, it is advisable to hire an attorney that will help draft the applicable documents and settle all legal issues. Avoid putting anything down on paper before hiring such an attorney, as you could inadvertently engage in a binding agreement that doesn’t meet your precise conditions. An attorney can help you avoid such a mistake.
Waiting for the perfect buyer and the best offer is prudent, but once you’ve decided on the correct fit, an attorney can help expedite you throughout the rest of the process.
Most sellers, and almost all buyers, are expected to seek representation to help make for a smooth and efficient transaction.
The Inspection & Adjustments
After a buyer has placed an offer, they will likely wish to conduct a home inspection. It’s common protocol to allow them to conduct such a search.
If any previously undiscovered faults in the building do turn up during this inspection process, the deal is not necessarily off the table. At this point, it will be up to you, the seller, to discuss moving forward with the buyer. Certain repairs may have to be made before closing, and the asking price may have to be adjusted.
As always, an attorney can help maintain an equitable environment during this discussion.
Signing the Contract
After the offer and inspection phases, sellers are asked to submit all relevant information to their attorney so a contract of sale can be drawn up. The contract of sale contains all pertinent specifications, including the property’s value, size, etc. and is to be signed by all parties during the closing.
The attorneys representing both buyer and seller will review and negotiate the terms of the contract. The buyer will then sign four copies of the contract of sale, which will then be sent out for finalization.
The seller is then asked to sign the contract. Once the seller has signed the contract of sale, it is considered fully executed, two copies are sent to the buyer’s attorney, and proceedings may continue.
After the buyer’s attorney receives the two fully executed copies of the contract of sale, a seller must wait for the following conditions to be met before the transaction can proceed to closing:
- A title search must be performed.
- A buyer may apply for a loan. If the buyer is not applying for financing, this step is not necessary.
- In the case of co-ops, the buyer must apply to the co-op board. This step must take place after financing is approved, and may take several days to finalize.
- Current occupants must fully vacate the premises.
The general timeline for various sales are as follows. Remember, these are average times for varying property types, but all cases are unique. Your particular transaction may take longer, or finish quicker, depending on the particularities involved.
Co-op: ~40 days
Condo: ~25 days
Home: ~20 days
SALES WITH FINANCING:
Co-op: ~90 days
Condo: ~70 days
Home: ~60 days
After all of the above conditions are met, and the buyer and seller are ready to close, the bank can declare the property “free to close.” All of the required paperwork will be sufficiently filled out and signed, the premises will be removed of furniture and vacated by the previous occupants, and a closing will be scheduled.
The closing is a meeting involving: (1) the buyer (2) the seller (3) all attorneys (4) the title closer (5) all brokers and in the case of co-op transactions, also (6) the managing agent. [Heretofore referred to as “all parties” or “all involved parties.”]
This meeting often occurs in the seller’s attorney’s office or the buyer’s bank’s attorney’s office. For co-op transactions, the closing will take place in the managing agent’s office.
During the closing, the deed or stock certificate, along with all official documentation, will change hands from the seller to the buyer, and the buyer(s) will become the official new owner(s) of the property.
At Kaplan, Kaplan & DiTrapani, LLP, we offer free consultations. We look forward to starting a profitable business relationship with you, and would love field any questions or concerns that you may have.