Real Estate Law

REAL ESTATE LAW

Real estate law governs the rights and interests in both residential and commercial real estate and provides protection for buyers, sellers, land owners, developers, contractors, and realtors. The legal issues handled by the real estate attorneys at Kokolakis Law Firm include sales, purchases, leases and transfers of real estate, title to real property, settlement of claims against property rights, landlord-tenant issues, property development, zoning and land use and environmental compliance along with financing mortgages and foreclosures and other relevant legal issues. Real estate law is a complex field which is further complicated by the variation in the laws throughout different cities and states.


The real estate attorneys at Kokolakis Law firm are well versed in real estate practice handling everything from the mundane drafting of deeds and filing of liens, to handling boundary and zoning disputes and even assisting families in court when threatened with foreclosure. When real estate disputes arise, the real estate lawyers at Kokolakis Law Firm represent their clients in court. The common areas of litigation are breach of contract, zoning compliance issues, construction defects, foreclosure, HOA issues or boundary disputes. Schedule a consultation today to speak with Real Estate Attorneys in Queens, NY and Astoria, NY.

General Information

  • REAL ESTATE LAW OVERVIEW

    The purchase or sale of your residence is likely one of the single largest financial transactions of your life. You need representation from someone who represents your rights exclusively. While licensed real estate agents and brokers can assist in preparing real estate purchase contracts, they cannot dispense legal advice, and you are always within your rights to request that your real estate attorney review the document before you sign it.


    Moreover, the purchase or sale of a property does not merely involve a contract of sale. The Kokolakis Law Firm, PLLC. reviews or prepares the contract of sale between buyer and seller; reviews existing title evidence, survey, tax data, mortgage data, assessments, liens, easements and restrictions; interviews and counsels client; coordinate with lenders, realtors and attorney for opposite party; advise client concerning procedures relating to the transaction, including obtaining and discharging mortgages, obtaining insurance, acquiring possession and paying expenses related to closing; monitor compliance with contract including obtaining of mortgage by buyer, payment of balance of earnest money, and establishing closing time, place and procedures, and arrangements for possession; review title continuation and ascertain the nature of title exceptions, and prepare necessary documents to clear title exceptions; review current survey for accuracy and encroachments; prepare or review closing documents, including the deed to real estate (including counsel on proper method of delivering and holding title), title insurance, bill of sale of personal property, mortgage documents (for buyer), transfer documentation, title bill and settlement statement; supervise the signing of documents; attend closing and supervise title procedures and delivery of closing documents, verification of closing figures and compliance with contract, payment of purchase price or delivery of proceeds, delivery of possession, recording of deed and ordering title insurance and payoff of items to be paid from closing proceeds.


    It is imperative that your legal rights are adequately represented while the purchase or sale of your property is transacted in a smooth and competent fashion.

  • WHAT AREAS OF REAL ESTATE DO YOU HANDLE?

    Real estate is actually a complex area of the law that covers the purchase and sale of real property like houses and buildings and other type of transfers of real estate. It also covers leases and rights of landlords and tenants. Basically, any rights and interests in real estate and real property fall under the realm of real estate law. We focus on transactions of residential, commercial, mixed use, warehouse, retail, office and multifamily residential properties. During our asset growth sessions, we deeply discuss the wishes of our clients that we are best able to enable them to proceed quickly and to facilitate successful completion of each transaction while solving any problems, issues or opportunities that may arise. Our clients range from property owners, potential property owners, tenants, investors, lenders and developers.


    Common Issues Faced By Clients In Commercial Real Estate Transactions


    Commercial real estate is not as straightforward as residential real estate may be. For instance, many times it overlaps with other areas of the other law such as business, corporate and tax law. Basically, commercial real estate encompasses any property that is owned to produce an income. It includes the purchase, sale or leasing of any income producing properties. Selling or purchasing real property or entering into a lease as a landlord or tenant is a major transaction. It involves negotiations, due diligence and legal documents full of complicated terms and conditions. Due diligence is important because it helps avoid transaction surprises and confirms, among other things, that the property can be used as intended.


    First and foremost, we focus on our client not the property. The property should meet a client’s goals and should match in terms of price and location, permitted uses and investments required. Thereafter, attention should be placed on inspecting the building, examining the zoning designation, existing leases, to name just a few things that should be taken into consideration to make sure the building is a match. An experienced commercial real estate attorney should understand the unique issues of a commercial transaction and be able to guide and assist in all stages of the transactions.


    Clients that choose to work with the Kokolakis Law Firm meet with an attorney during our asset growth session, where we thoroughly review our clients, situation to determine the best course of action that will ensure that their rights are protected while they achieve their goals. The Kokolakis Law Firm understands the issues, problems and opportunities that owners and operators of real estate property encounter and accordingly provides the necessary services to meet the needs of our clients.


    Do People Generally Try To Resolve Real Estate Disputes Through Realtors Or Attorneys?


    Our approach in the real estate setting is that all parties generally want the same thing. The seller wants to sell and the buyer wants to buy. This approach has served us well over the many years. Unfortunately, however, disputes do happen. Many minor disputes are usually resolved as we address them in a reasonable manner focusing on each individual’s goals. Our years of experience allows us to draft a contract in such a way as to avoid many possible disputes before they ever happen. In addition to the essential terms that we include in each contract, these make sure to address recurring issues as we clearly spell out the rights and obligations of each party in detail.


    Many disputes can arise due to the parties not being clear on the contract terms. Two of the most common disputes that we see are the seller trying to back out of selling or the buyer not being able to obtain proper financing. We make sure to clearly address these issues in all of our contracts. Now, as far as the question on whether we should involve the realtor, we believe the realtors play a vital role in real estate transactions. But we strongly urge all our clients that we are always the first call that they make. We are here to represent and guide them through the entire process. In order to successfully accomplish this goal, we need our clients to always contact us first so that we may guide them as necessary. We take a proactive approach as opposed to a reactive approach with all our clients.


    Do Most Residential Real Estate Transactions Involve Clients That Are Purchasing A Residence?


    Our clients range from first time home buyers to the sophisticated investor and everything in between. We take most pleasure in representing the first time home buyer and first time investors. They are usually those who need the most guidance and we feel we provide the most value. The reason for this is that we do not just focus on the legal terms of a transaction, but rather we step in and offer our guidance on the entire process. In this, we feel a first time home buyer or a first time investor needs it to help calm their fears as we assist them in closing a successful and beneficial deal.


    For more information on Handling Real Estate Law, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • COMMON ISSUES FACED BY CLIENTS AND THE PROCESS IN RESIDENTIAL REAL ESTATE TRANSACTIONS

    Generally, residential real estate is either a single family or multifamily house that is primarily used for personal purposes.


    We wish to ensure that our clients personal buying experience is tailored to their needs. We do this by having an asset growth session. Our asset growth session is a one on one meeting designed for us to meet and to get to know the client and understand what is important to them. In addition to discussing what we need to know to move forward in our purchasing experience, our meeting’s primary purpose is to get to know our client’s ultimate goals. This assists us in determining how best we may overall assist. Where needed, we review and explain the broker agreement. We then review the binder and the deal sheet or the offer to purchase.


    The offer to purchase should always be in writing and include the necessary terms and important contingencies so that a client has an opportunity to back out or negotiate the transaction if needed. Sometimes, an issue may arise early on. In this instance, we will speak with the broker and our agent to address any issues that may need to be addressed to ensure a smooth transaction. We strongly urge that the house to be purchased be inspected and we assist our client in finding a qualified, experienced home inspector or engineer and review the inspection report with them. If all is well and we are ready to proceed with the transaction, we review a draft of the purchase agreement or contract and negotiate critical terms before we have our client sign it.


    We understand that excitement and anxiety take over when you buy your house, which makes it easy to miss critical terms. Part of our service is to prevent this from happening. The purchase agreement in its original form generally favors the seller. As the attorney, we have our client’s interest in mind and accordingly, our goal is to negotiate the contract and change or add certain terms to how we think they should read based on our years of experience and our client’s goals that we discussed during our asset growth session. Sometimes certain issues arise after the agreement of sale that require an amendment or an additional writer to the agreement of sale. When this happens we generally will negotiate and review the additional documents and explain them to our client and arrange for them to be signed.


    Once the purchase agreement is signed by all the parties and received by our office, the client, if needed, applies for a mortgage loan and we make sure to advise our client that when they do apply for the mortgage loan that the mortgage loan officer explains to them what should be explained to them, gives them a GFE, which is the good faith estimate, a statement detailing the loan amount, the interest rate, the closing costs and other costs associated with the purchase. This is vital so that there are no surprises and the client understands the closing costs and makes sure that they are in an adequate position to move forward. Although preliminarily during our asset growth session, we do discuss the funds as well, because I want to make sure that they understand what is needed before we ever have them sign the contract.


    We work with the client and the loan officer to assure that they receive the documents that I mentioned earlier and that they are reviewed with them so they really understand it. With all these different fees being discussed with the client, it could be a little overwhelming and confusing. So, what we do is we organize the estimate fees and a spreadsheet for them and explain each fee so they can understand where their money is going. Thereafter the bank is generally going to require that the property get appraised, so what we do is we work with the bank and the real estate agent to make sure that there is access for the appraisal and then for the appraiser to actually appraise and then there will be an appraisal report.


    I or a member of our team generally sits down with the client and reviews the appraisal report with them so they understand the points and the nuances that are brought up. This is a property they are going to be buying and owning and so I really want them to understand all the details, not just the exterior of the building and how pretty the color is, but I want them to really understand what it is they are purchasing. When all goes well, the bank is going to issue a loan commitment letter and this is basically a letter that the bank states in loose terms that they are committing to lending the money that the client is borrowing.


    Receiving a commitment letter from the bank generally firms up the purchase because now we know they are willing to lend us the required money to make our purchase, specifically the commitment letter explains the terms upon which the bank is willing to lend us the money. We review the commitment to confirm that the terms are as were agreed between the bank and our client and basically because we do not want any surprises. Once we receive the commitment letter and we see that the deal is going nice and smooth, at that point we order and review the title search. The title search is important because it helps us make sure that the property being sold is free of any encumbrances such as liens or judgments.


    This is very important because the results of a title search reveal whether the seller has the legal right to sell or if we will have problems if one day we wish to sell. Part of our services is to assure that all title issues are resolved before you proceed to purchasing our client’s home. Basically, we protect them from buying someone else’s headaches. There are often times where a client may not be able to attend the closing directly or the husband or the wife is not able to attend and in those situations, we do offer power of attorneys and this is where we would draft the power of attorney and have it signed and approved by the necessary parties in advance so that at the closing table, there are no surprises and everything goes nice and smooth.


    As we get closer and ready to complete this purchase, we work with the attorneys for the bank and the home seller’s attorney and schedule and attend the closing of title and loan. We review critical closing documents, mortgage loan documents, and the deed, which is how you take title to your home, which is also very critical as it can impact the ability to sell or transfer in the future. We make adjustments, which prorates expenses to our client from the seller such as property taxes, condominium assessments and utilities. We want to make sure all the documents, revisions and terms are represented in the actual documents that we are signing. We also review what used to be called the HUD-1 form, now it is a disclosure form, which is the final statement of loan terms and closing costs.


    We compare it to the good faith estimate that the bank provided to us earlier to make sure they match. The two documents should be very similar. You look for unnecessary, unexpected or excessive fees as well as outright mistakes. There are times when for a variety of reasons, money or documents need to be held in escrow by a third party until certain conditions are met. This process generally requires additional accounting and drafting of documents and monitoring and it is definitely a service that we do provide because we want to make sure that if it is needed. We do not want to hold up the deal due to that, but we also want to make sure that the client is adequately protected and thereafter the closing, we monitor and we assure that deed is correctly filed with the county clerk.


    Following the closing, we continue to monitor to make sure it is filed correctly and we receive the original and then we forward it to our client for safekeeping. Certain times we also inform the landlord with regard to when we are purchasing, so for example, if we do not have a lease, we generally should notify the landlord at least thirty days prior that we are moving out so that we do not forfeit any deposits on the apartment. We would draft to provide a written notice to their landlord as well and that is an additional service that may or may not be needed, but it is there if in case it is needed.


    For more information on Handling Real Estate Law, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • DO MOST PEOPLE RETAIN ATTORNEYS FOR REAL ESTATE TRANSACTIONS?

    It depends on what state you are in. In New York State, it is wise, if not required to hire an attorney when you are selling and to hire an attorney when you are buying.


    How Often Do These Things Fall Through In Terms Of Buying Or Selling Real Estate?


    It is important to understand that the signing of a contract by buyer and seller doesn’t necessarily guaranty that a closing will occur. There are many things that may happen between the “contract date” and “closing date” that can cause a deal to fall through.


    We hear of many deals that go bust for a variety of reasons but our deals usually close successfully. We attribute this to our years of experience which have taught us to prepare as best as we can. Our business model ensures that we start our due diligence before we even sign contracts. This requires having our questions answered sooner rather than later. We address financing, appraisal and inspection issues early on. Also, we make sure that our contracts have remedies in place in the event the other party wrongfully refuses to perform the obligations under the contract.


    Of course, sometimes our deals don’t close by design. For example, there are times when we put contingencies in the contract as a means to protect our client. This permits our client to cancel the contract without repercussions.


    What Are The Main Title Issues That Can Hold Up A Real Estate Transaction?


    Main title issues generally involve Certificate of Occupancy violations, existing mortgages and other liens. A Certificate of Occupancy is a document that states a building’s legal use and/or type of permitted occupancy. So, for example, if we are selling a two family home, we would need a Certificate of Occupancy that basically says this is a two family home. If I was selling this as a two family home when we have a certificate of occupancy that says it is a one family home, we have a problem. It affects the value tremendously; it affects the extra rentals, so it is a huge issue with regard to a deal.


    Another potential title issue is violations. Violations are problematic because they run with the property. This means that once you purchase a property that has violations, you, as the owner, have the legal obligation get the building back into compliance. So, if a building has a sidewalk violation due to a cracked sidewalk, or an illegal deck or a finished basement, we need to make sure that those get addressed, removed and satisfied; otherwise we cannot let our client purchase that headache because they, then, have a problem. When they attempt to sell the property, they may then have to remove the violation.


    Sometimes the violations stay because the clients are aware of them in advance, they have negotiated in advance, they have adjusted the purchase price or the sale price accordingly, so sometimes it is there but, at least, we explored it and made an educated decision. But even in this situation we must be cautious because there may be a chance that the improvement may not be legalized.


    Existing mortgages and other liens are another example of title issues. We need to make sure that when we are purchasing a property, that any mortgages and liens on the property are addressed and satisfied prior to or at the closing because if not, we just bought a house that has a huge lien on it and we ourselves have a problem. So, those are the three to four main issues with regard to title issues that are common title issues.


    For more information on Attorneys For Real Estate Transactions, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHO ARE THE PARTIES INVOLVED IN A REAL ESTATE PURCHASE?

    When thinking of the parties involved in a real estate transaction we initially only think of the seller and the buyer, then the Real estate agents then their respective attorneys and usually that is where the thought process ends. However, a successful real estate transaction requires the involvement of many professionals.


    Of course, we stated the obvious which are the seller of the property, the buyer of the property and the Real estate agent or agents that connected the seller to the buyer. Thereafter we are introduced to the attorney for the seller and the attorney for the buyer.


    Just as important and many times initially overlooked is the home inspector or engineer who conducts the building inspection on the behalf of the buyer. Thereafter, we must not forget the Loan officer and/or broker, appraiser and underwriter who are necessary components in obtaining a mortgage loan.


    We then are introduced to the title company who takes on the responsibility of examining the title of the property that is being purchased to discover, among other things, if there are any judgments, liens or violations on the property.


    Along similar lines, the buyer wants to verify the size of the property, the legal description and, among other things, determine if there are any encroachments like a fence or shed that are on the neighbors property. This is accomplished by obtaining a survey which is drafted by a licensed land surveyor.


    As the transaction is smoothly taking its course and prior to the closing the buyer then retains an insurance broker to take out real property insurance.


    When the time comes to close title and complete the transaction. Many of the parties gather in a room to effectuate the closing. Usually in attendance are: The seller, the buyer and their respective attorneys, the Real agents, the title closer (who works for the title company) and an attorney who represents the lender.


    Basically, there are many parties that are involved in the purchase of real estate and the Real estate attorney keeps them and the process organized as they are introduced throughout the various stages of the transaction and towards the successful and timely closing.


    Why Should Someone Hire An Attorney To Oversee A Real Estate Transaction?


    To state the obvious, we are not buying something of minimal value such as a cup of coffee. But rather we are purchasing a property which is safe to assume involves a large sum of money. It also involves real property law. Not only is it wise to retain an experienced real estate attorney to protect your interests and hard earned money but New York law provides in brief that “[n]o natural person shall ask or receive, directly or indirectly, compensation . . . for preparing deeds, mortgages, assignments, discharges, leases or any other instruments affecting real estate . . . unless he has been regularly admitted to practice, as an attorney or counselor, in the courts of record in the state” (N.Y. Jud. Law § 484).


    Initially, the real estate transaction may appear simple. We find the house we want to buy, we sign some papers, we give over our money and we get a set of keys in return. Done!


    Unfortunately, it is not as simple as it may appear. The idiom that comes to mind is “the devil is in the details” or as I prefer to say “God is in the detail” which means that attention paid to small things has big rewards, or that details are important.


    The appearance of simple is often times disastrous without an experienced real estate attorney by your side. At minimum, an attorney should address certain concerns that you may not have thought of: For instance, what happens if a home inspector or engineer inspects the property and termites or a leaky roof is found? If the property has a deck attached to it, was it done lawfully? What happens if there are violations on the property? What happens if the seller or buyer change their mind? What if you are not able to get a mortgage loan? An experienced real estate attorney will address these as well as many other concerns and issues that present themselves during a real estate transaction.


    Hiring a real estate attorney from the moment you decide to sell or buy a property is a step in the right direction.


    What Is An Offer For Purchase?


    Simply, an offer is presenting to the seller the amount of money you are willing to pay for their property. If you have not guessed it by now, things are not usually that simple. An offer is actually more complicated as initially appears. Offers take into consideration how badly you want the property, how many other buyers are interested in the same property, if the property is in need of repairs and how much you can actually afford to pay. Once we determine the amount we are willing to pay for the property, we still are not ready to present our offer, we must think about if we are offering all cash, or if we want the offer subject to our obtaining a mortgage loan. If so, how much will we borrow?


    What happens if we are not able to get a loan? Do we make our offer contingent on our obtaining a loan commitment? What other contingencies or conditions should we ask for that must be satisfied before we are required to go through with the purchase? The offer may involve many details that if not correctly addressed may place you into an agreement that is not in your best interest. It is best to have your initial offer in the form of a binder prepared by your real estate agent with language that makes it subject to review by your attorney.


    For more information on Real Estate Transaction in New York, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT ARE THE BASIC STEPS INVOLVED IN A REAL ESTATE TRANSACTION?

    Before you get to call that house or building yours, a bunch of things first need to happen. The real estate transaction is a complex and time-consuming process requiring many steps. However, before you decide which property you want to buy or sell, which Real estate agent you want to use and even before you choose your lender, you have a major decision that should be made first. Hire your lawyer! Yes, hiring your lawyer should be your first step. Not just any lawyer but an experienced Real Estate lawyer.


    Not trying to push a lawyer on you so fast but think of it realistically, you will be hiring an attorney anyway so why not get them involved as soon as possible.


    On numerous occasions I have people come to me after they already agreed to key issues or terms that weren’t necessarily in their best interest. Of course after I advise them of their error they respond with I didn’t know you then or didn’t think I needed you. Well, therein lies the problem. Step one: Hire an attorney. Now, with the attorney by your side, you are ready to take the next steps of the transaction. Do you need a real estate agent and what should you look for, your lawyer can help you. The Agent hands you an agreement to sign, don’t worry you have your lawyer. You are presented with a binder on an offer, don’t worry your lawyer will make sure the proper contingencies are in place. You are overwhelmed by the home inspectors report, your lawyer can review it with you and let you know the major issues based on his or her experience.


    Time has come to sign a contract to sell, don’t worry your lawyer will draft one or make sure one is negotiated with your best interest in mind. You don’t understand what your lender is telling you, not a problem your lawyer can explain each detail. You need to make sure the property is free and clear of any liens, real estate lawyers do this in their sleep. You have no idea what all those loan documents you have to sign mean, aren’t you glad you have your lawyer to explain each one to you. You don’t have to be alone; hire an experienced Real estate lawyer who will hold your hand and guide you through each and every step of the real estate transaction; both residential and commercial.


    Should Someone Be Pre-Approved With The Lender Before They Start To Look At Property?


    The law does not require a potential buyer to be pre-approved by a lender to make an offer on a property. You will not be arrested at the open house if you do not have a pre-approval letter. You may, however, not get preferential treatment.


    What exactly do I mean? Well, even though a pre-approval letter isn’t required it helps to have one for a variety of reasons. Your offer to purchase your dream home is strengthened when backed by a pre-approval letter. It shows the seller that you are serious and ready, willing and able to buy their house. This is especially important when the seller is receiving multiple offers to purchase their house. A pre-approved buyer’s offer is more likely to win in a multiple offer situation.


    Pre-approval letters aren’t just beneficial when presenting your offer they also help you determine how much you are comfortable spending and bring light to any negative credit issues that you may not be aware of. In order to obtain the pre-approval letter you will need to sit with a loan officer who will review your overall financial condition.


    Assuming your offer is accepted, being pre-approved for a loan may actually get you your new home faster because during the pre-approval process you most likely already completed a mortgage application and provided required documents to the lender and the lender would have already done their background checks.


    Accordingly, we established that although you don’t necessarily NEED a pre-approval letter to make an offer on a property, having one is advantageous in many ways. Just remember you are not obligated to use the bank that has furnished a pre-approval letter for you.


    What Is Escrow?


    Escrow is the placing of money or documents with a neutral third party so that it can be delivered to another party once certain specific conditions have been met. Generally, as it pertains to the home buying process, the down payment provided by the buyer upon signing the real estate contract of sale is placed in escrow and not released to the seller until closing of title whereby if all goes well the funds are then delivered to the seller and the escrow is closed. Typically, in New York State, the attorney for the seller acts as escrow agent.


    The occasion frequently arises where the escrow agent doesn’t actually release all the funds to the seller but rather continues to hold some funds even after the sale is concluded. This is usually to protect the buyer and generally happens when issues arise that cannot be cleared prior to the closing but the parties do not want to adjourn the closing and want to close the deal that very day. For example, there is a violation on the house you are buying that has not been cleared by the seller. The seller promises to clear the violation but requires additional time in which to do so. As opposed to delaying the closing of title and transfer ownership to the buyer, the parties may agree that the escrow agent hold back a sufficient sum of money, usually double what is estimated to be needed to clear the violation issues. Upon clearing the issues, the remaining funds are released to the seller. But if the seller does not clear the violations they may be cleared by using the funds that were held in escrow.


    For more information on Basic Steps in Real Estate Transactions, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT IS THE REAL ESTATE CONTRACT?

    A real estate contract is a legally binding written agreement between a seller of real property and the buyer of that real property whereby the parties agree to transfer the real property. To be legally binding all parties must accept the terms of the contract. Acceptance is evidenced by each party signing the written agreement. Once the terms of the agreement are agreed upon and the written real estate contract is executed the parties are obligated to perform according to its terms. The terms are basically the rights and obligations of the buyer and the seller. Failure to abide by these terms is considered a breach or default of the contract.


    As A Seller, Do I Have To Make Any Disclosures To A Buyer Before Signing A Contract?


    Traditionally, New York followed the principle of caveat emptor – “let the buyer beware”. Under this principle the buyer must perform their own due diligence to determine the condition of what they are purchasing. The seller’s obligation to disclose was limited.


    Things changed on March 1, 2002 when New York enacted The New York State Property Condition Disclosure Act. This new disclosure law requires owners of one- to four-family homes to complete a six-page 48-question Property Condition Disclosure Statement and to provide that form to a potential buyer before they sign a sales contract. The law does permit the seller to provide the buyer a $500.00 credit in lieu of the disclosure form.


    The $500 credit is not exactly a get out of jail free card. Buyers remain protected by the law in cases where known defects are concealed. The seller may remain liable for concealing or failing to disclose known defects.


    We at the Kokolakis law firm generally recommend our seller clients provide a $500.00 credit and make sure our sale contracts reflect that we are giving the credit in lieu of providing the disclosure form. Our rationale is that we do not want our clients to risk making 48 individual representations relating to the property potentially exposing themselves to the risk that, intentionally or not, a misstatement is made.


    An argument may be made that the the spirit of caveat emptor is still alive and well despite our current Property Condition Disclosure Act.


    Is There Any Grace Period For Either Party To Back Out After Signing A Real Estate Contract?


    Generally, real estate contracts of sale have no grace period. Once both parties have signed and are in receipt of the contract they are legally bound by its terms. It’s crucial for the buyer and seller to understand the importance of what they are signing and be aware if its details. This doesn’t necessarily mean that a buyer or seller cannot get out of a contract. An experienced Real Estate attorney may have successfully negotiated certain contingencies that would permit a party to cancel the contract under specific circumstances. This doesn’t mean that you can unilaterally cancel the contract but it does mean that there are options.


    It is not uncommon for residential contracts of sale to contain a financing contingency. Many times a buyer is relying on a mortgage loan to supplement their available cash in order to be able to purchase the property. If a buyer timely applies for a mortgage and follows the terms of the contract but is denied their loan by the lender then the financing contingency kicks in and the buyer may cancel the contract and have their down-payment deposit returned.


    Contracts may also be contingent upon a satisfactory termite inspection, or house inspection or the house appraising at a certain value. There may be a variety of contingency clauses in contracts which if not met permits the buyer to cancel the contract without risking their initial deposit.


    In addition to contingencies, there are many representations that a seller makes that if not met may permit either of the parties to cancel the contract. For example, the seller makes a representation that the house is a two family house but following due diligence, the buyer discovers that the property is in fact a legal one family. This would permit the buyer to cancel the contract and obtain not only their down-payment but also their out of pocket costs, if properly negotiated by their attorney.


    Examining the many clauses and terms of a contract of sale may provide the opportunity for a seller or buyer to legally cancel the contract of sale but to be clear these are not grace periods.


    Neither party can just say they changed their mind and unilaterally cancel the contract without breaching the contract and facing the legal consequences which may include in the case of the buyer, forfeiting their down-payment as liquidated damages or in the case of seller being sued for specific performance of the contract.


    After all, if anyone can just successfully declare I changed my mind and I want out without consequences then why even have a contract?


    For more information on Real Estate Contract, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT ARE THE REMEDIES IF EITHER PARTY BREACHES THE CONTRACT?

    First and foremost you want to examine your sales contract which will give you initial guidance as to your rights and remedies if the buyer or seller breach or default under the contract.


    Upon examining the sales agreement you will generally find that in the event of a default by the buyer that the seller is entitled to declare the contract null and void and receive and retain from the Escrow Agent the down-payment deposit, as liquidated damages, which is usually ten percent of the purchase price.


    Thereafter, the seller may place their house back on the market and sell it to a new buyer.


    Another option available to either buyer or seller unless limited by the contract of sale is to initiate a legal action for specific performance. Basically, you are asking a judge to order the buyer or seller as the case may be to specifically perform the contract which in this case means force them to proceed to closing and conclude the real estate transaction. This is a powerful tool that may be utilized by an experienced attorney but it takes times and may be costly.


    Also involving going to court, a seller may have the legal right to initiate a law suit against the buyer for damages. If, for example, the seller was in contract to sell his house for $800,000 and now he is only able to sell for $700,000 then he may make the argument in court that he was damaged in the amount of $100,000 because that is the amount the seller lost by the buyer defaulting under the contract.


    The experienced Real estate attorney is aware of these and many other possibilities when negotiating the terms of the contract and will attempt to have the contract drafted in their client’s favour. From day one we hope for the best but prepare for the worst.


    What Are The Different Types Of Inspections In a Real Estate Transaction?


    Few would disagree that buying a home is one of the most important purchases we will make in our lifetimes. As such, it is prudent that our soon to be new home is inspected to make sure it is a sound investment and a safe place to live. We wouldn’t want you to have any surprises.


    Residential properties usually only require that a home inspector or engineer inspect the property. The inspector, who is hired and paid for by the buyer, should inspect the foundation, the roof and gutters, doors and windows, sidewalks and driveways, plumbing, heating and cooling systems, electric fixtures, outlets and switches. You should also consider having a qualified inspector check for Mold, Radon, lead, Asbestos and pests.


    The commercial property usually involves the above in addition to more in depth environmental and hazardous waste inspection and perhaps zoning inspections as well. This is not an exhaustive list of what inspections may be required but are the most common.


    When you choose an inspector, you want to choose someone you believe to be competent, thorough and trustworthy. When calling the inspector it is wise to ask about, among other things, their credentials, licensing, professional affiliations, and whether the inspector carries errors and omissions insurance.


    You will also want to ask how long the inspection will take, what does the inspection include, what type of inspection report do they provide (ask for a sample report) and how long will it take to receive the report, and how much will the inspection cost. I intentionally leave this question towards the end because you want to make sure you hire the inspector for the right reasons and not just on price.


    Also, I strongly advise that you go along with the inspector and ask questions during the inspection.


    Can Something Be Done If Some Fault Is Discovered After A Property Has Been Purchased?


    Maybe yes and maybe no. These type of matters require some analysis the answer to which is determined on a case by case basis. We take into consideration what was faulty and the extent of the damage. We then look to the contract of sale to see how the issue is addressed. Generally, New York Sale contracts have a clause that in effect states that the buyer agrees to buy the property “as is”. Then we look to see if there was a property disclosure form that was completed and provided to the buyer or if there was a $500.00 credit. And then we want to take steps to discover if what was faulty was known by the seller prior to or at the time of the sale.


    Irrespective of the $500 credit and the “As is” language in the contract of sale, you, the buyer still have rights when it comes to the seller concealing or failing to disclose known defects. The Seller remains liable for disclosure requirements that have been established by New York case law. New York courts have found the seller liable for proactively concealing or hiding known defects or for failing to disclose defects that could not be reasonably ascertained from a home inspection. Also, the New York Appellate court has ruled that the “as is” clause in the sales contract did not waive or impair the protections of the disclosure Act.


    For more information on Remedies for Breach of Contract, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT IS A TITLE DEFECT IN A REAL ESTATE TRANSACTION?

    In real estate, a title defect or cloud on title means there is a complication related to the property. Common defects are errors in public records, judgments, liens, unsatisfied mortgages, unknown easements, change of title defects and boundary survey disputes. Title defects are serious in that they usually delay or prevent your ability to purchase, sell, or convey your property.


    What Is Title Insurance?


    Title insurance is an indemnity insurance that protects real estate owners and lenders against property loss or damage they might experience because of liens encumbrances or defects in the title to the property. Title insurance, unlike other forms of insurance, protects against past problems not future risks. Basically, it protects against title defects that could affect ownership rights. It should come as no surprise that the buyer wishes to receive clear title to the property when they purchase real estate. This is why an attorney for the buyer directs a title company to conduct a search of the public record as they relate to the property.


    The title search may reveal the existence of recorded defects, liens or encumbrances like unpaid taxes, unsatisfied mortgages, easements, judgments, and tax liens against the current or past owners of the property. These recorded defects, liens and encumbrances, if any, are presented to the buyer’s attorney in the form of a title report. The attorneys view the report to determine what action, if any, is needed to make sure the purchaser obtains good record title to the property at closing and thereafter, since they copied to the seller’s attorney emphasizing any issues that the title report may contain.


    Ideally, the seller is able to resolve any issues that may exist prior to the closing of the transaction. Generally, the issues are resolved to the satisfaction of the parties and the title company clears the file for closing. At the closing, the title company issues an owner’s policy of insurance and a lender’s policy if there is a lender. It is also unique and that you pay once, but it lasts for as long as you or your heirs retain an interest in the property.


    What Does It Mean To Close On A Property In A Real Estate Transaction?


    We have discussed the complexities and steps of a real estate transaction. They all lead to the closing of title, which means the buyer now owns a new home and the seller has a pocket full of cash. In essence, the real estate closing is the actual transfer of the real property from the seller to the buyer and involves the review, explanation, and signing of paperwork, lots of paperwork if a loan is involved. If the buyer is taking out a mortgage loan, then there are actually two closings simultaneously taking place, the closing of the purchase of the house, and the closing of the buyer’s loan for the mortgage.


    The closing of the loan must be successful if the buyer is to have the required funds in which to complete the purchase and satisfy the seller. Once the loan documents are signed to the lender’s satisfaction, the funds are released and disbursed as directed by the buyer, the deed, which grants legal rights, is signed by the seller and given to the buyer who intern arranges to have it filed with the county clerk. In short, money and keys exchange hands and the buyer finally owns their new house.


    A closing can last anywhere from thirty minutes to hours and hours, as the parties resolve issues that may arise at the closing table. An experienced real estate attorney should be aware of any outstanding issues and taken steps to resolve them prior to attending the closing to ensure a smooth and quick closing.


    For more information on Title Defects in Real Estate Transactions, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • CAN DISPUTES HAPPEN IN REAL ESTATE TRANSACTIONS?

    Disputes do happen. Disputes vary both in size and in kind. Many minor and major disputes are usually resolved as we address them in a reasonable manner focusing on each individual’s goals but both the minor and major disputes may literally take years before a resolution is reached. An experienced real estate attorney will know to draft their contracts in such a way as to avoid many common disputes while clearly spelling out the rights and obligations of each party in detail.


    Many disputes are avoided by having clear contract terms. When the dispute does arise that cannot be easily resolved, we are often asked how long it will take to reach a resolution. While we understand the need for closure and the value of time, we unfortunately find it difficult to ascertain the exact time it will take as there are many variables to be considered. Unfortunately, even the most straight forward cases can take a significant amount of time as they navigate the halls of the court.


    What Is The Process Of A Real Estate Transaction?


    The process of the Real estate transaction vary slightly depending on if you are the buyer, the seller or if it a residential or commercial deal. Focusing on what they all have in common the first step should be to consult with an attorney or two or three until you find that experienced attorney that also makes you smile. As odd as it sounds to some, there should be chemistry; that special “click”.


    Unless the buyer and seller haven’t already found each other, it is now time to find a Real estate agent. The agent will assist with locating your dream house, that perfect investment or bringing you the perfect buyer, as the case may be.


    It is a good idea at this stage for the buyer to visit a lender get themselves a pre-approval letter.


    Make sure you have your comfiest shoes on as you now visit many properties with your Real estate agent. Once the agent successfully connected the buyer and the seller and we have an accepted written offer. It is now time to involve a home inspector while the buyer and seller’s respective attorneys hash out the terms of the contract of sale.


    Following a satisfactory inspection, the parties will sign the now finalized contract of sale and the buyer will make a down payment which will be deposited with the escrow agent.


    Now is the time for the buyer to again visit their lender and continue the loan application process.


    The attorney for the buyer will be ordering and reviewing the Title search, ordering the land survey and addressing various issues as they arise.


    During the loan process, the lender will arrange to have the property appraised by a licensed appraiser.


    Assuming the loan is approved and title issues are cleared we are ready to schedule a closing.


    At the closing the mortgage loan documents are signed by the buyer, the deed and transfer documents are signed by the seller, the seller is paid and the buyer now owns a new home!


    How Long Does A Real Estate Transaction Generally Take?


    Realistically, a closing can take anywhere from thirty days to one hundred and twenty days. According to Jonathan Miller, head of the appraisal firm, Miller Samuel, it took an average of eighty-one days from fully executed contracts to closing in the fourth quarter of 2014.


    Why Is It Important To Retain An Experienced Attorney Even For Small Real Estate Transactions?


    Small is relative. What may be small to one person may be a life savings for another. The size of the transaction may be taken into consideration, but it should not be a main concern when it comes to choosing an attorney. An attorney brings their legal expertise to the table irrespective of the size of the transaction, and it is the law. For instance, many times when a client walks in, sits at my desk and boom, they present me with an issue. That triggers off, going into the filing cabinet in my brain, so to speak, to pull out solutions to those particular issues and that’s based on experience.


    Many times if it is a new issue, and I remember I have been practicing close to eighteen years now and early on, it was time and time again researching, looking into things and really not having an answer or knowing how to address certain issues. Over time, however, because I have seen so much, faced so much, experienced so much, handled dozens of contracts and disputes that experience allows me to handle the issue quickly, reasonably and efficiently.


    For more information on Disputes in Real Estate, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • HOW CAN I IDENTIFY AN EXPERIENCED REAL ESTATE ATTORNEY?

    Some of the things we want to look for is how long have they been practicing. Before you hire an attorney, you want to determine how much real life experience they actually have. That is key, it is imperative. Determining that can be ascertained from asking how many cases they have handled, whether it be on an annual basis, monthly basis or in their lifetime, and in addition to that, the sublevel would be you want to ask how many cases like yours have they handled. This is where the experience kicks in because the more cases they have handled the longer they have been doing this, the more likely they have handled similar cases to yours. True real estate transactions sound simple and similar, but each one is unique.


    Another thing you want to look for when interviewing the attorney is how they will bill you, will there be a flat fee, will it be an hourly fee, something along those lines, and get an idea of how much they will be charging you. But do not make your decision based on price. Sometimes, the saying is true “You get what you pay for.” You also want to ask the attorney who else will be working on your case, is it just going to be them, will it be a junior attorney, will it just be a paralegal who is handling it under the supervision of the attorney, these are things you want to discover prior to hiring the attorney.


    When you do hire the attorney, get it in writing. The attorney made certain assurances and promises to you, get them in writing. It is called a retainer, make sure the attorney signs it, and make sure you sign it; it will break down what your agreement is so that everyone is very clear as to the understanding of this newly formed relationship. You have to like the person. This is the person you are going to be working with, this is the person who is going to be by your side each step of the way, you need to be comfortable with them and you need to trust them if you do not get yourself another attorney.


    What Sets You And Your Firm Apart In Handling Real Estate Transactions?


    What makes our firm different is our outlook. We do not believe we are retained to draft and hand over a bunch of documents, but rather, we are hired with a main goal to help our clients solve their problems, capture their opportunities and achieve their overall goals. We do this by taking the time to listen to our clients until we understand them, until we truly get them get their business, get their industry, get their challenges and get what they want to achieve. Thereafter, armed with our years of experience, we march forward to achieve their goals all the while involving our client each step of the way either by email, telephone or face-to-face.


    We have given much time and attention in putting in place processes and procedures to assure that our clients receive the attention they deserve. We respond to emails and calls in a timely fashion and make sure that all questions are answered. In fact, we do not get off the phone or finish a meeting until we are fully satisfied that all of our client’s questions and concerns are answered and addressed. In short, not all lawyers are the same and the right real estate lawyer really does make a difference.


    Additional Information Regarding Real Estate Transactions


    Even if it was not the law, especially in New York, there are other places that I have seen where everything is simpler, cleaner and maybe even a friendlier system, but New York unfortunately is not there yet and so the newer generations of attorneys are better. Generally when you deal with some of these new attorneys, you can so to speak have your guard down a bit because everyone is professional and they are true to their word, but the old school attorneys, it was a different world back then and the laws were even different. Sometimes they are really out to get you and they will find any which way, shape or form to keep that down payment deposit and not close the deal and the next thing you know you are battling in court. Years ago, it was very aggressive and an ugly business. Little by little it has cleaned up.


    For more information on Finding the Right Real Estate Attorney, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT DISTINGUISHES YOU FROM MY LONG TIME ATTORNEY WHO HAS HANDLED REAL ESTATE CLOSINGS, MY WILL AND MY BUSINESS?

    Let’s focus on experience. Is your long time attorney, who handles real estate closings, your will and litigated your business disputes, an expert in each of those areas? If yes and you are happy, then I will always suggest that you continue that relationship. The fact of the matter is, however, that general practitioners are generally not experts in all of those areas, which means you may not be getting the best. Now, focusing on what distinguishes us from other attorneys is the fact that we are experts at what we do.


    We know how to strategically employ our expertise towards the benefit of our clients; we are able to quickly understand and empathize with our clients because we too, as entrepreneurs, starting and running our own business, have experienced the very same things that our clients are experiencing. On plenty more than one occasion, I’ve had a client pause and smile because I understood them and quickly offered a satisfactory solution.


    Why Should I Bother Going To An Attorney When I’m Comfortable Reviewing And Signing Business Contracts On My Own?


    First and foremost, you don’t know what you don’t know. Reviewing and signing contracts provided to you by a potential adversary or downloading one from a Google search can be dangerous. I’m reminded of a coffee mug I once saw that made me chuckle. It said, “Do not confuse your Google search with my law degree.” I can certainly add and my experience, but the point is clear. Regardless of your comfort in reviewing a business contract, it is not a substitute for the advice and experience of a business attorney.

  • IF I HAVE PURCHASED A HOME OR BUSINESS AND FOUND THAT SOMETHING INSIDE THE HOME WAS FAULTY WHEN I PURCHASED IT, IS THERE ANYTHING I CAN DO ABOUT IT?

    This depends on what is faulty and the language of the contract. Generally, the buyer bears the risk of something being faulty, especially if discovered after the purchase. This is why it’s important to conduct the home inspection prior to entering a contract of sale and to conduct a walkthrough inspection the day before or day of the purchase. This issue is further addressed in my book, “Closing the Deal and Building your Wealth,” which can be downloaded for free from our website.


    Is There Anything I Should Do Before Purchasing A Home Or A Business?


    Yes: perform your due diligence, whether you are purchasing a business or a home. With regard to a home, you should most definitely conduct a home inspection and make sure your attorney arranges to have a title search completed. With regard to a business, at the very least, you would want to have a judgment and lien search performed.


    What Do I Need To Make Sure Of When I’m Selling A Home Or A Business?


    You should make sure you meet with and retain the services of an experienced attorney who can guide you and protect your interests during each step of the process.


    As A Seller, Are There Any Defects That I Have To Disclose To The Buyers Before Selling A Business Or Home?


    On March 1st 2002, New York enacted the New York State Property Condition Disclosure Act, which is a new disclosure law that requires owners of one- to four-family homes to complete a six-page, 48-question property condition disclosure statement and to provide that form to a potential buyer before they sign a sales contract. The law does permit the seller to provide the buyer a $500 credit in lieu of the disclosure form. This issue is also further addressed in my book, “Closing the Deal and Building your Wealth,” which may be downloaded for free from our website.


    Should I Hire An Attorney To Oversee The Process If I Am Purchasing A Home Or A Business?


    Yes. Once again, I suggest you download my book, “Closing the Deal and Building your Wealth,” which can be downloaded for free from our website and offers pages and pages on why an attorney should be hired to represent you in a purchase or sale of your home or business.


    Why Should I Hire A Real Estate Attorney For A Closing If The Parties Are Represented By Real Estate Agents And Can Use A Title Company Instead?


    First of all, it’s a complicated process involving many steps and many people playing varying roles, and second, the state of New York requires an attorney to draft the transfer documentation.

Mortgage Refinance

  • WHAT IS THE PURPOSE OF MORTGAGE REFINANCING?

    Refinancing a mortgage is simply just replacing your existing mortgage with a new mortgage. The existing mortgage is paid off and the new mortgage takes its place. Prior to further discussing refinancing and its purpose, it is important that we first discuss what a mortgage is. A mortgage is a loan in which real property is used as collateral. Many people do not have all the cash readily available with which to outright purchase the house and therefore apply to a bank or a lending institution for a loan. The lender loans the money provided the loan is secured by the house. Basically, the house you buy acts as collateral in exchange for the money you are borrowing.


    Mortgages, not unlike other loans have certain terms such as the period of time in which you must pay back the borrowed money and at what interest rate. Yes, the lender charges interest which is the price you pay to borrow money from your lender. There are a variety of mortgages; the two main types are the fixed rate mortgage and the adjustable rate mortgage. Fixed rate mortgage loans have the same interest rate for the entire repayment term, whereas adjustable rate mortgage loans have an interest rate that will change or adjust at certain intervals. Directing your attention back to refinancing your mortgage, its purpose is primarily to obtain a better interest rate, cash out or both.


    Perhaps self explanatory, better interest rate financing simply means the borrower refinanced their mortgage because they were able to obtain a better interest rate which in turn would generally lower their monthly loan payments.


    A cash out refinance, on the other hand, is used when you use the equity in your house to obtain a new mortgage loan that provides funding in excess of paying off your existing mortgage balance and leaving you with extra money in your pocket.


    What Is Equity?


    Equity is the difference between the value of the asset and the cost of the liability of something owned. As it applies to your house, equity is the amount of the house’s value that you actually own. This is the part where my clients mostly pause and ask, “What do you mean by the part that I actually own?” Allow me to explain. You technically only own a percentage of the house’s appraised value. Remember, most people borrow money to buy property. Yes, you are named in the deed as owner, but as you recall, you placed your house as collateral for the loan which gives your lender an interest in your house; an interest that goes away when you pay off your loan.


    We are able to determine your home equity by simply deducting the money you owe your lender from the appraised value of the house. For example, if the appraised value of your house is $1 million and you owe your lender $700,000, then you have thirty percent equity in your house or $300,000. In other words, you own thirty percent of your house. Equity, however, is not fixed, it can fluctuate. It can either increase or decrease. For example, if the appraised value of the house we used in the previous example increased, then your equity increases as well.


    Even if the appraised value of the house does not change, the equity can slowly increase assuming that each month you have been making your payments and paying down your loan. Of course, equity can also decrease such as in the situation where the appraised value of the house decreases in value. If, for example, a $1 million house is now worth $700,000 and we still owe $700,000, then our equity drops to zero.


    Who Should Consider A Mortgage Refinance?


    There are a few scenarios for when a homeowner should consider refinancing their mortgage. When they are looking to lower their interest rate, lower the term of their mortgage loan, replace an adjustable rate mortgage with a fixed rate mortgage or when they wish to cash out their equity in order to make some improvements on their home, buy another house or pay for a child’s education.


    When Should Someone Avoid Refinancing A Mortgage?


    On occasion, I am approached by individuals that have credit card debt and ask if they should refinance their mortgage with the intent of paying off their credit card debt. Their rationale in wanting to do this is to eliminate the high interest on the credit card debt. This, at first, sounds appealing, but I make sure that they consider they may end up paying thousands more in interest because they are taking up to thirty years to pay off the balance they transferred from their credit card to their mortgage.


    Also, what I deem more important is advising in doing so, they are converting an unsecured credit card debt into a secured debt. Now, if they do not keep up their payments, they risk losing their homes or go into foreclosure. Even when presented with the opportunity to lower your interest rate, it may not be wise to refinance your mortgage. Refinancing is a process that involves closing fees, these fees may take years to recoup. Therefore, it may not make sense to refinance to a better interest rate when you owe only $100,000, but makes perfect sense when you have an existing million dollar mortgage. Each case is different, no two are alike.


    For more information on Refinancing Mortgages In New York, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • WHAT IS A FORECLOSURE?

    Lenders are in the business of lending money, not the real estate business; they do not want to foreclose on your homes. They do not want your house, but they do want your loan to be repaid with interest. However, sometimes life happens. Circumstances beyond your control such as huge medical bills, losing your job or going through a divorce, may prevent you from making your monthly payments. Failing to pay your monthly mortgage loan payment may lead to a foreclosure. Essentially, a foreclosure is a legal process where the lender takes away the house that was used as collateral for your loan.


    Foreclosure happens when you fail to make your monthly payments and default or violate the terms of your mortgage loan. Once a lender has foreclosed on a house, they can sell the house and keep the proceeds to pay off the mortgage and foreclosure related fees. Individuals who are not able to make their monthly mortgage payments should consult with an attorney to review all their options. An experienced attorney should be able to review their unique circumstances and advise them of their options other than the foreclosure, such as a loan modification, repayment plan, short refinance or some other option.


    What Is The Process To Refinance A Mortgage?


    Refinancing a mortgage involves a similar process to when you first took out a mortgage on your house. When you applied for a mortgage, you borrowed money to be applied to the size of the house, less your down payment whereas now with a refinance, you are taking out a loan for the balance owed on your existing mortgage loan and paying off your existing mortgage, thus replacing your existing mortgage with a new mortgage that will have a new interest rate and terms. When considering refinancing, we need to determine which type of refinance will best suit your needs and to do that we must first consider what exactly our your needs.


    What are we going to achieve by refinancing? Do we want to just lower our monthly payments? Pay off the mortgage faster? Pull extra cash out or something else? Once we have established which the best mortgage refinancing is for our client, then we need to complete a loan application with a lender. In reviewing your application and accompanying documentation, the lender will also check your credit score and debt ratio. After the loan agent has reviewed your application and relevant information, they will send an appraiser to your house. The appraiser will draft an appraisal report which establishes the value of your property and determines whether or not you have sufficient equity to support your loan. Your completed loan application and the appraisal report will then be submitted to an underwriter for a careful review.


    If all is satisfactory to the underwriter, they will approve the loan. Many times, the loan is approved, but with certain conditions that must be satisfied by the borrower prior to closing the loan. These conditions are found in the Loan Commitment Letter. Furthermore, at this point, you will most likely have to decide if you should lock in your interest rate. Locking your interest rate protects you from rising rates. Once all the conditions are met and you and the lender are satisfied, it is time to schedule the closing of the loan where you will need to review and sign your loan documents. It is wise to have an attorney present that can explain each document to you prior to your signing to make sure they reflect your understanding of this new refinancing package. The refinance process is relatively straight forward, but it does not always go smoothly.


    It is best to have an experienced real estate attorney from the start to guide you and avoid the potential pitfalls and assure a smooth transaction.


    What Are The Potential Pitfalls That Someone Refinancing Their Own Mortgage Might Not See?


    Most people enjoy surprises, but the last thing we want when refinancing is to be surprised by hidden fees. Some lenders or mortgage brokers may require that you pay related fees, such as certain loan origination fees, points or other loan related fees that you either were not expecting or that were not disclosed with in the closing of the loan. Federal law requires lenders to provide a good faith estimate or disclosure of the fees needed to complete the refinancing which should list all loan related fees and costs.


    Always request to be provided a good faith estimate or disclosure statement. Another pitfall and unwelcomed surprise is finding out your house is not worth as much as you thought it was. During the loan approval process, the lender will require an independent appraisal to confirm your house’s value. Many times, the appraisal comes in lower than expected, this in essence diminishes the amount of equity you have in your house which in effect may lessen the amount of money that you may borrow and cause the lender to raise the interest rate or simply deny your loan application.


    Credit worthiness is paramount when it comes to applying for a refinance loan or any loan for that matter. Perhaps, your credit was excellent when you first purchased your house and applied for a mortgage loan, but thereafter you may have been faced with some tough times, lost employment or you may have not been current on your bills. Paying bills late, among other causes, may drop your credit score which prevents you from qualifying for a loan or obtaining a competitive interest rate. It is best to check your credit score before you apply and take the necessary steps to get it as high as possible before applying to finance your mortgage loan.


    The above are few of many pitfalls that someone may face when attempting to refinance their mortgage. Some may be avoided through proper planning. The prudent homeowner should consult with an experienced real estate attorney when they first think that they want to refinance their mortgage and definitely prior to applying with their lender.


    For more information on Foreclosures In New York, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

  • DO I NEED AN ATTORNEY TO REPRESENT ME IN REFINANCING MY MORTGAGE?

    In an attempt to save money, you may refinance on your own without the assistance of a real estate attorney. It is important to know, however, that unless you hire an attorney to represent you during the refinance of your mortgage, no one else involved in the process is representing your interest. You may encounter the lender’s attorney, but irrespective of how pleasant they are, they DO NOT represent you and cannot act in your interest, but rather they act in the interest of the lender.


    Further, we must consider the value that you receive which many times far surpasses the legal fee. For example, an experienced real estate attorney may save you from a refinancing scheme or hidden fees that otherwise you would not have discovered until it was too late. Also, a real estate attorney gives you a peace of mind as you are guided through the refinance process as they perform many time consuming and detail oriented tasks, preparing your loan transaction from intake to closing.


    What Role Does The Attorney Play In Representing A Person In A Refinance?


    Not all attorneys are created equal and therefore it is difficult to ascertain exactly what role they play in representing anyone who wants to refinance. However, I can speak as to what role an attorney should play in representing a client when refinancing their mortgage. An attorney should meet first with their client and get to know them. Delve deep into their lives with the intent of understanding what is important to them. Determine their ultimate goal. What do they wish to accomplish by refinancing their mortgage?


    The attorney should then apply the answers received from the client towards the refinance options taking into consideration all aspects of the client’s life as to make sure we do not encounter any obstacles during the refinance process and to make sure it even makes sense to refinance. It is important at this stage to examine certain issues such as credit score, closing costs and available equity. All this should be done prior to the client applying to refinance their mortgage.


    Once the decision is made to refinance, the attorney should then assure that the client prepare the basic documents that the lender would require during the application process. It is always best to be prepared. A brief list of documents requested is usually income tax returns for the past two years, current pay stubs, W-2s for the past two years, bank account statements for the past two months, most recent mortgage statement and if applicable, and an explanation letter for any negative credit issues. Now it is time for the client to shop around and make sure that they get the best lender for themselves. We make sure to arm our clients with questions and issues to consider. Of course, we all want the best and lowest interest rate, but there are other issues to consider as well.


    For example, we want to ensure that there are no pre-payment penalties if we prepay the loan early, which is basically what we are doing with our existing mortgage. We also want to be aware of the lender’s fees which can be found on the good faith estimate or disclosure statement which we will review with our client. Most importantly, we want a lender that makes our client feel comfortable. During the refinance process, the attorney should work closely with the refinance lender and the title company to make sure that the process runs smoothly while working to clear any title issues that may arise and attend the refinance closing and review and explain all critical closing and mortgage loan documents.


    Basically, the experienced attorney should represent and guide their client through the entire refinance process while making it seem easy and stress free.


    For more information on Attorneys & Refinancing Mortgages, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

Share by: