If you are new to the state of New York it may come as a surprise to learn that real estate transactions involve not only real estate agents, but also attorneys to represent the buyer, the seller, and in some instances, the lender.
This is because New York law mandates that only attorneys can practice law and specifies that the important aspects of a real estate deal are included under that umbrella. However, hiring an attorney is also in your best interest, regardless of whether you are buying or selling property since the attorney performs many important functions during a real estate transaction. Specifically, a real estate attorney is there to review the contract for sale, review title, prepare (or review) the deed and other important legal documents involved in the transaction, and represent your interest during the closing.
Your attorney will first become involved in your real estate transaction after you have selected a property to purchase, or someone has elected to purchase the property you have for sale to review the sales contract. During this phase, your attorney ensures the contract is in your best interests, that you understand what you are committing to, and that the contract is legally correct.
Once the sales contract is approved by the attorneys for the buyer and the seller, it is time to review the title documents. Reviewing the title documents is especially important for a buyer since this process ensures that the seller owns the property (and thus can legally sell it) and that there are no undisclosed liens attached to the property. Further, the attorney will review the chain of title (the people who owned the property before the seller) to ensure that the property was legally passed from person to person in previous transactions.
Once the attorney determines that the title documents are clear of any interests or liens, they will also review the other legal documents including the deed, the tax documents, any necessary affidavits, etc. During this process, the attorney’s job is to ensure that the documents are correct, and that title will pass from the seller to the buyer in a legally binding fashion. If you are purchasing a property with another person your attorney will also discuss how you will take title to the property. For example, two or more parties may take title to a property as joint tenants with right of survivorship (or tenants by the entirety if a married couple). This means that in the event one party dies the title to the property will automatically pass to the surviving party. Two or more parties may also take title to property as tenants in common, which means that each party owns a percent share of ownership in the property. In the event one party dies their percent share in the property will pass to their heirs through probate.
Finally, and perhaps most importantly, your attorney will represent your interests during a closing. For example, if you’re using mortgage financing to purchase a home the attorney will help the buyer understand the legal commitments involved in loan documents. Or, if there was some issue with the property during the final walk-through, the attorney will help you understand your legal rights and negotiate a favorable solution.
If you are new to the state of New York it may seem unusual to hire an attorney to purchase or sell property but choosing an attorney who will diligently represent your interests throughout the process is one of the best investments you can make.