Clients often ask us what is involved in the typical real estate transaction in Monroe and surrounding Counties, New York. Every transaction differs based on its individual terms, but most transactions follow a customary local scheme. Please note that this page is meant to be a basic guide, and your individual situation may vary.
Most contracts provide for an “attorney approval contingency.” Attorney approval contingencies dictate that, before either party begins performing on the contract, an attorney must issue an “approval letter” to the other approving of the terms. The length of time allowed for an attorney to issue an approval is typically three days, but differs depending on the terms of each individual transaction. The attorney approval contingency period is also one of the best times to cancel a contract by way of “disapproval” if a party has a change of heart before performance on the terms of the contract begins. Attorneys sometimes use the attorney approval contingency period to offer additional terms or clarifications to the language contained in the contract.
After approval letters are issued, the seller’s attorney is usually obligated to order two documents; the abstract of title and the instrument survey map.
An abstract of title details the history of ownership, liens, etc. attached to a property in the public record. In Monroe County, our abstracts detail at least 60 years of history, but the amount of time “searched/abstracted” differs based on local custom. For example, some surrounding Counties’ title standards only require 40 years of history be reviewed.
An instrument survey map shows certain information which allows attorneys to “describe” the property in what is known as a “legal description.” Legal descriptions make reference to metes and bounds (courses and distances) around a property, or make reference to a County map record which clearly shows which property is being conveyed or lien placed against. These legal descriptions are attached to most documents recorded in the public record to identify the subject property. The instrument survey map also shows the location of any “improvements” attached to the property which, in short, means anything attached to the ground. It may also show locations of easements or other rights and obligations attached to the property.
Once the seller’s attorney receives the abstract of title and instrument survey map, they will ordinarily draft proposed conveyance documents. Conveyance documents means, in this context, documents like your deed, affidavits of seller, affidavits of seller’s attorney, and any curatives (more on this later) which seller’s attorney reasonably anticipates that they will need to provide over the course of the transaction.
Once the buyer’s attorney receives the abstract of title, instrument survey map, and proposed conveyance documents from the seller’s attorney, they usually engage a title insurance company for the purpose of insuring the transaction. The utility of title insurance is something which you should discuss with your attorney, but it is recommended that buyers purchase a title insurance policy in virtually all real estate transactions. Therefore, virtually all real estate attorneys will order a title insurance policy on your behalf in anticipation of closing, and the premiums for title insurance will be displayed on your closing statement or closing disclosure which is ordinarily disclosed to you prior to your closing date. In addition, all lenders will require a separate title insurance policy to protect their security interest if a buyer is receiving financing for their purchase.
The title insurance company drafts a document called a “title commitment.” The title commitment is utilized by the buyer’s attorney as a second review of the abstract of title and instrument survey map, as well as other important information, for the purpose of clearing defects in the chain of title which would render ownership or other aspects of property title defective. The buyer’s attorney works with the seller’s attorney to collect “curatives.” Curatives are documents which are received by buyer’s attorney and/or recorded in the public record to fix issues located by the attorneys and title company in the chain of title.
Buyers who are financing a property should work closely with their chosen lender to submit all documents required well in advance of the closing date. Buyers who do not timely submit required documents or signatures to a bank are oftentimes unable to close on time.
If a buyer is receiving financing from a bank, they will receive an official Preliminary Closing Disclosure at least three days prior to their closing date, unless the bank has “pre-disclosed” their closing figures to the buyer. If you receive a Closing Disclosure before your closing, it is very important to review the document with your attorney if necessary, and sign as soon as practically possible to avoid any closing delays.
You will be notified by your attorney or a paralegal to schedule your closing for a date and time which is convenient for all parties involved in the transaction.
Sellers will ordinarily sign their paperwork in advance of the buyer’s closing, and the documents are usually held in escrow by the seller’s attorney until the closing date. Attorneys utilize courier service and overnight mail to deliver the documents to the buyer’s or bank’s attorney’s office. Sellers cannot receive the money from their sale immediately after the buyers close. Instead, sellers must wait for the documents to be recorded with the County Clerk in the County where the subject property is located.
Any questions about the contents of this page should be directed to your attorney.
Written by Will Creary, Esq.