Purchasing or selling real estate in New York is one of the most significant financial transactions most people will undertake. Understanding the closing process can help reduce stress and ensure a smooth transaction. Below are answers to the most common questions we receive about real estate closings.
What Is a Real Estate Closing?
A real estate closing (also called "settlement") is the final step in a real estate transaction where ownership of the property is legally transferred from the seller to the buyer. During the closing, all necessary documents are signed, funds are exchanged, and the deed is transferred.
Frequently Asked Questions
How long does the closing process take in New York?
In New York, the typical closing process takes 60-90 days from contract signing to closing. However, this timeline can vary depending on factors such as mortgage approval, title search results, and the complexity of the transaction. Cash purchases can close more quickly, sometimes within 30 days.
What documents will I need to bring to closing?
Buyers should bring: valid government-issued photo ID, proof of homeowner's insurance, certified or cashier's check for closing costs (or wire transfer confirmation), and any documents requested by your attorney or lender. Sellers should bring: photo ID, all keys and access devices, and any documents related to the property.
What are typical closing costs in New York?
Buyers typically pay 2-5% of the purchase price in closing costs, including: mortgage origination fees, appraisal fees, title insurance, attorney fees, recording fees, and prepaid expenses (taxes, insurance). Sellers typically pay: real estate broker commissions (if applicable), transfer taxes, attorney fees, and any outstanding liens or judgments.
What is title insurance and do I need it?
Title insurance protects against financial loss from defects in the title that weren't discovered during the title search. In New York, lenders require a lender's title insurance policy. Owner's title insurance is optional but highly recommended as it protects your ownership rights for as long as you own the property.
What happens if issues are found during the title search?
If title issues are discovered (such as liens, judgments, or boundary disputes), they must typically be resolved before closing can proceed. Your attorney will work with the seller's attorney to address these issues, which may involve paying off liens, obtaining releases, or in some cases, purchasing additional title insurance coverage.
Can I do a final walk-through before closing?
Yes, buyers are entitled to a final walk-through, typically conducted within 24-48 hours before closing. This allows you to verify the property's condition, ensure agreed-upon repairs were completed, and confirm that all fixtures and appliances included in the sale are present.
What is the role of the attorney at closing?
In New York, attorneys play a crucial role in real estate transactions. Your attorney reviews the contract, conducts due diligence, coordinates with the lender and title company, reviews all closing documents, attends the closing, and ensures proper transfer of funds and recording of documents.
When do I get the keys?
Typically, buyers receive the keys at the closing once all documents are signed and funds have been transferred. However, the exact timing may depend on the terms negotiated in your contract, such as a post-closing possession agreement.
Tips for a Smooth Closing
- Stay in close communication with your attorney and lender
- Avoid making major purchases or opening new credit accounts before closing
- Respond promptly to requests for documentation
- Review all documents carefully before signing
- Ask questions if anything is unclear
- Arrange for homeowner's insurance before closing
- Set up utilities to transfer on the closing date
Need Legal Assistance?
Navigating a real estate closing can be complex. Having experienced legal representation ensures your interests are protected throughout the process. Contact Agarunov Law Firm for guidance on your real estate transaction.