A client of mine recently asked me to write a blog article article explaining step by step the process of selling your home in New York. This article assumes you’re selling a one family home. These steps may differ if you’re selling a cooperative apartment or condominium unit.
Step One, Putting your home up for sale.
Most people will hire a real estate broker to assist them in finding a purchaser. The broker will ask the seller to sign a listing agreement setting forth the term of the agreement, usually 3 to 6 months, the amount of the commission as a percentage of the sale price and whether the broker may put the listing on the multiple listing service.
Step Two, Hiring an attorney.
The broker has found a buyer who made an offer that you have accepted. Now you need to hire an attorney to represent you in the sale. The broker may recommend an attorney they have dealt with in other transactions but you are free to hire any attorney you feel comfortable with. Most attorneys offer free consultations in which they will describe the services they offer and their fee for representing you as a seller. I typically ask the prospective client to sign a retainer agreement setting forth the scope of my representation and my fee.
Step Three, Going to Contract
Even though you have verbally accepted an offer from the buyer, the transaction isn’t legally enforceable until both you and purchaser have signed a contract of sale. Your attorney will prepare the contract and email a copy to the Purchaser’s attorney to review. Once the Purchaser’s attorney has reviewed the contract and any proposed changes are agreed to, the Purchaser will sign the contract and it will be sent to your attorney with the down payment check. The down payment is customarily ten percent but is negotiable. Most contracts now permit digital signatures and the down payment may be wired to your attorney’s escrow account as well. Once the contract is received by your attorney, you’ll sign as seller and a PDF copy will be emailed to the Purchaser’s attorney together with a cover letter confirming receipt of the down payment which will be held in your attorney’s escrow account.
Step Four, Your Attorney Reviews the Title Report
Upon receipt of the fully signed contract, the Purchaser’s attorney will order a title report, a copy of which will be sent to your attorney. The report will indicate any mortgages you may have as well as the current real estate taxes and any other possible liens. Your attorney will ask you to contact the NYC DEP to arrange for a final water/sewer reading and to contact your bank to obtain a payoff letter for any mortgages you may have. For a discussion of title insurance see http://www.dippellaw.com/wordpress/why-do-i-need-title-insurance-when-i-purchase-my-home-in-new-york/
Step Five, Scheduling the Closing
Once your Purchaser has received their mortgage loan approval your attorney will schedule a closing with the Purchaser’s attorney. The closing is a meeting of the parties and their attorneys at which time the balance of the purchase price is paid to you and you will deliver possession of the home to the Purchaser. Prior to the closing, your attorney will prepare the deed and transfer tax returns which you’ll sign at the Closing. For a discussion of what taxes you’ll pay at the Closing, see http://www.dippellaw.com/wordpress/what-taxes-will-i-have-to-pay-when-i-sell-my-new-york-city-home/
Step Six, The Closing
The Closing will generally take place at the office of the attorneys for the Purchaser’s mortgage lender. You will sign the deed, the transfer tax returns and various title affidavits. You’ll receive the balance of the purchase price in the form of official bank checks from the Purchaser and their lender and the balance of the down payment, after your attorney has paid transfer taxes and other fees from their escrow account.
Step Seven, The Closing Statement
After the Closing your attorney will send you a closing statement summarizing the transaction together with copies of documents you’ve signed at the Closing. You’ll need this when you file your income taxes for the year the Closing took place.
While for the sake of brevity I have simplified the procedure somewhat, this general outline will give you an idea of what to expect when selling your home.