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FYI CONTRACTS AND REAL ESTATE
 The following information is
provided as a courtesy to NYS ATTORNEY.com visitors. This general information
will not constitute an attorney/client
relationship.
Commercial and Real Estate Agreements
Did you know that very often controversies that
result in litigation involving commercial or real estate transactions could
have been avoided by a comprehensive, well drafted agreement at the inception or
early stages of a business relationship or commercial or real estate transaction? I recommend that
each client prepare a detailed list
of all important terms that have been agreed upon. I believe that the attorney should
review the list, and include legally enforceable language in the commercial or real estate agreement, reflecting the
parties' understandings. It is my sincere belief that the extra care and attention that I devote
to negotiating and drafting commercial and real estate agreements often saves my
client the substantial expense and inconvenience of unnecessary litigation. Real
Estate
Once you have agreed upon the price for the
home you are buying or selling, the next step is usually to enter into a formal
contract of sale. There are many extremely important legal and financial issues
that should be addressed in the contract. It is my firm belief that negotiating
the contract of sale is the most important phase of the transaction, since the
contract will serve as the blueprint for the entire transaction. Furthermore, if
something "goes wrong", which it often does, your legal rights will
usually be determined by the terms of the contract.
The following are a few
examples of issues that we believe should be included in the contract of sale:
-
Under what circumstances can the purchaser cancel the contract, and obtain a
refund of the down payment?
- What are the purchaser's legal rights and remedies if:
- Seller can't deliver good
title?
- Seller doesn't have the required Certificate of
Occupancy?
- Seller is unable to deliver possession (vacate the premises) on time or prior to
the expiration of purchaser's mortgage loan commitment?
- The plumbing, heating, electrical systems, air conditioning, appliances, etc.
are not working at the time of closing?
- Seller needs to
close the transaction in order to obtain the money required to close title
on his or her new home, but the seller needs some time after the closing in
order to move? This will require purchaser to pay the entire balance
of the purchase price, although purchaser will not be given possession of
the property until several days later. Adequate provisions should be
included in the contract of sale, in order to insure that the seller will
move out promptly after the closing of title, and deliver possession of the
property to the purchaser. Also, provisions should be included in the
contract, in order to compensate purchaser, in the event that the condition
of the premises upon transfer of possession, is no longer as represented in
the contract of sale.
- Purchaser is unable to secure a mortgage loan commitment within the time
allotted in the contract of sale?
- Purchaser's loan commitment is for an amount less than the amount applied
for?
- Purchaser
unnecessarily delays the progress of the transaction, which causes
the seller to incur substantial additional expense? (This is especially
significant if the seller has already moved from the premises, and is therefore
paying the expenses on two residences simultaneously.)
These potential problems can often be avoided or solved if they are properly
addressed in the contract of sale, and followed through by experienced real
estate attorneys.
Why does it usually take two to three months
from the date the contract is signed, until the closing of title takes place?
- Most real estate transactions are
contingent upon the purchaser obtaining financing. It usually takes
approximately 4 to 6 weeks for the purchaser's bank or mortgage company to
issue a loan commitment. Furthermore, even after the loan commitment is
issued, the bank's attorneys often require various additional items which
the purchaser's attorney will usually obtain and provide. For houses and
condos, purchaser's attorney will obtain a title search, including various
departmental searches. For the sale of houses and other real estate, if the
seller does not have a current survey, purchaser's attorney may attempt to
locate a valid survey, or obtain a new survey. For co-op apartments, the
purchaser's attorney will usually obtain a "co-op search".
Furthermore, a detailed co-op application must be completed and submitted to
the co-op Board of Directors, together with required financial
documentation, character references, etc. Thereafter, an interview of the
prospective purchaser will be conducted by the co-op's Board of Directors.
If the purchaser and seller are both anxious to expedite the closing, it may
be possible to shorten the time period from contract signing to closing.
Why
am I paying so much money at the closing?
- In a typical real estate transaction, both
the seller and purchaser usually have various substantial expenses and
adjustments. Considering the financial complexity of the real estate
transaction, it is not surprising that most people don't understand the
expenses that are payable at the closing. Your attorney should be happy to
explain all of your expenses, and do everything possible to both verify that
they are accurate, and to minimize or avoid those that can be negotiated or
eliminated. Also, your attorney will provide a detailed closing statement,
which should itemize and clearly explain each of your expenses. The closing
statement should be in a format that is easy to understand, both now and in
the future, so that you and your income tax preparer can easily obtain the
desired financial information about your transaction.
The Law Offices of Michael W. Goldstein
offers quality legal services at reasonable fees. The Firm serves its clients with a wide spectrum of legal services
for business and personal legal matters. For more information about
Michael W. Goldstein's legal experience, areas of practice, fees,
etc., click
here. We
invite you to have your case or legal matter reviewed by Michael W.
Goldstein. Please click Submission Forms to select one of our
questionnaires. You are under no obligation to retain our law firm.
You
can reach Michael W. Goldstein at (212) 571-6848, or click Contact
Us to send an email.
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