If you are selling a home in New York state, you will need to hire not only a real estate agent to market and negotiate offers on the property, but also an attorney to prepare the contract of sale and to represent you at the closing. Although attorneys aren’t a required part of real estate transactions in many states, the local custom in New York is for both sellers and buyers to be represented by their own counsel.
This article explores the specific roles that a seller’s agent and attorney play in a New York home sale.
A real estate agent, or listing agent, is typically the first person hired in connection with selling a home. The agent will advise you on “comps,” or the prices for which comparable homes sold, and help you to determine the price at which you will list your home. The agent may also advise you on marketing strategies such as staging your home or making repairs or other updates to improve your ability to sell at the highest possible price.
The seller’s agent will likely arrange for photographs of your home, and use those photos in marketing materials. The agent will then advertise your home in various places, including his or her firm’s website, local print, and online newspapers and online real estate listings. The agent is then responsible for showing your home to potential buyers, individually or at open houses.
Your agent will receive any offers from buyers, present the written offers to you, and negotiate with the buyers on your behalf on the basic terms of the deal. These terms include the price offered, whether closing is contingent on the buyers obtaining a mortgage, and any personal property to be included, or fixtures to be excluded, from the sale. Your broker will provide to potential buyers a one-page offer form, which varies from firm to firm, on which buyers will make their offer to purchase your home. Unlike in other states, the offer form is not a legal document and does not obligate the buyers to go through with the purchase.
Once you accept an offer, and the agent verbally communicates the acceptance to the buyers, your agent will prepare a term sheet and circulate it to your attorney and the buyers’ attorney. While your lawyer starts to prepare the contract, your agent will accompany the buyers’ home inspector when he or she inspects your home.
Going forward, your agent will also work with your lawyer to communicate with the buyers, negotiate any issues that arise in the drafting of the contract, and facilitate the scheduling of a closing.
Based on the term sheet that your agent prepared and conversations with you and your agent, your attorney will prepare the contract of sale. Most sellers’ attorneys start with a standardized form and then add a rider with additional terms to be negotiated with the buyers.
Once the attorneys have finalized the contract, you and the buyers will sign it, and the buyers will send your attorney a downpayment, which they may lose if they walk away from the deal without a reason contemplated by the contract. Typically, in New York State, the downpayment is for 10% of the purchase price, and your attorney will deposit this amount into an escrow account.
After the contract is signed, your attorney will need to do several things to prepare for a closing. First, the attorney will review the title report ordered by the buyers’ attorney to see if there are any issues that must be resolved before a closing. These may include liens or violations against the property. Second, your attorney will prepare all of the closing documents, including the deed and transfer tax returns. Third, your attorney will calculate the amounts owed at closing.
If you had a mortgage, your attorney will request a pay-off letter to determine the amount owed to your lender. Your attorney will also calculate the closing costs that you owe and proceeds owed to you by the buyers.
Finally, your attorney will represent you at the closing, advising you on the documents that you are signing and making sure that all payments are accurately made.