Contracts, Financing, and Closings
Contracts and the New York Closing
The statute of frauds requires a writing signed by the party to be charged, containing the essential terms: parties, property description, price, and signature. New York is an attorney state - brokers may negotiate, but attorneys draft and review the contract of sale, and there is no automatic statutory attorney-review period. A typical residential contract includes a downpayment held in escrow, a mortgage contingency, title and inspection provisions, and a closing date. Marketable title is title free of encumbrances a reasonable buyer would object to. Sellers convey by bargain and sale with covenant against grantor's acts or by full covenant and warranty deed, and title insurance protects the lender and, with an owner's policy, the buyer. Costs to know: New York State transfer tax of 0.4% up to $3 million and 0.65% at $3 million and above on residential transfers; the mansion tax of 1% on NYC residential sales of $1 million or more; the NYC real property transfer tax; and mortgage recording tax. A CEMA reduces recording tax on a refinance by assigning the existing mortgage.
Financing Basics
Know LTV, DTI, PITI, points (1 point equals 1% of the loan), and the difference between prequalification and pre-approval. Under TRID, the Loan Estimate is delivered within three business days of application and the Closing Disclosure at least three business days before consummation. Rule of thumb: 0.4% of price for state transfer tax on most deals - then add 1% mansion tax at $1 million in NYC.