Monthly Archives: February 2015

Just How Complex Is The Title Review Process?

blog1There will be few other processes, if any, that seem as complex as going through settlement and closing related to a real estate purchase.  The many laws and formalities that go along with these transactions make them very complex and sometimes even confusing, whether you’re a buyer or seller.  That’s why many individuals, both buyers and sellers, use attorneys to help wade through the details and ensure accuracy.

The closing process involves several different steps, many of which can be assisted by your real estate attorney, such as:

  • Examine current title records for previous conveyances, easements, judgments, liens, or other title issues
  • Verify that there are no errors in deeds involved in the chain of title
  • Confirm that the seller does have authority to convey a good title
  • Negotiate with the title insurance company regarding coverage needs
  • Consolidate all of these details together to prepare for the closing process

Once these goals have been accomplished, there are other things that a closing attorney will do to make sure that all stakeholders are informed, like:

  • Evaluate all the legal documents and negotiate contract terms
  • Attend the actual closing to ensure the title is transferred clearly
  • Discuss updates regarding property interest, if applicable

Hitting any kind of snag during the title process can be problematic for the buyer or seller.  Having an experienced real estate attorney catch red flags early can prevent the buyer from facing issues in the future.  The process of real estate transactions is detail-oriented and requires oversight from an expert.

Is Avoiding Probate Really Advantageous?

blog2One of the most common reasons supporting the use of a living trust is that it can help your heirs avoid probate.  Although this is often mentioned as a big benefit, many people are unaware of some of the negative impacts of allowing their estate to go through probate to begin with.

If you use a valid will to manage your estate instead, the details will enter the probate process.  The executor of your will distributed your assets under the guidance of court proceedings and formal rules.  In some complicated situations, this can take months or even years.

Choosing to use a living trust instead speeds up the process a great deal, meaning that your heirs get access to your assets without having to worry about the headache or delays associated with probate.  As an added advantage, a living trust adds a layer of privacy to your estate.  Wills that go through probate, however, are part of the court’s public record.  Many individuals who choose to hire a Staten Island trusts and estate lawyer want the privacy shield afforded by using a living trust.

You shouldn’t make a final decision about establishing a living trust until you have had the opportunity to communicate with an experienced attorney.  There are many different kinds of estate planning documents that could help you plan not only for your own future but also for the future of your heirs.  Whether it’s a living trust or some other combination of planning tools, thinking ahead can help your heirs avoid the process of probate and obtain access to what you have left for them more quickly.

Get Up to Speed on CEMA: What You Need to Know

blog3In New York, a CEMA loan stands for “Consolidation Extension and Modification Agreement”.  People who opt to use this are generally trying to avoid paying some or all of the mortgage recording tax within the state, and this applies most often to those going through the refinancing process.  If the mortgage tax savings outweigh the fees associated with using a CEMA, a borrower should considering taking advantage of this opportunity.

Each case is unique, but a borrower may be eligible to save based on three factors:

  • The amount the bank may charge for providing an assignment (which is required in the New York CEMA process).  Bear in mind that some banks will not do the assignment, making the borrower ineligible for a CEMA;
  • The unpaid principal balance on the existing loan;
  • The mortgage tax rate, set by each county within the state

When the mortgage is recorded, the mortgage tax is assessed.  In a typical refinance transaction, the previous loan is paid in full.  If you are able to pay off and satisfy an existing loan you will be responsible for the mortgage tax on the new mortgage, unless your bank is willing to assign the mortgage to the new lender.  This is an essential part of the New York CEMA process in order to reap the benefits of this kind of transaction.

Extra time may be required in order to process this loan, because an existing lender has to work with an attorney in person to collect the check and to drop off the original mortgage, the original note, and the original assignment.  If there are savings to be had for you, this kind of transaction can be valuable.  Contact a real estate attorney if you have additional questions on this specific type of real estate transaction.

What Should I Expect at Settlement?

blog4Settlements (or the real estate closing) can be complex, but you will feel more prepared and confident if you have some idea of what to expect.  Most individuals find peace of mind by working directly with a real estate attorney, since such an individual can closely analyze all the details in your documents.  In New York, every seller and buyer will hire a real estate attorney so don’t make the mistake of trying to take on the task of representing yourself at the time of settlement.

The time is takes to complete settlement can vary.  For refinances, you can expect to put aside between 30 minutes and one hour, with purchases typically taking between one-two hours.  The settlement will usually be attended by the purchaser, the seller, the real estate agent, and the real estate attorney (s).  

Settlement can be very exciting whether you are the purchaser or the seller, but you need to be as prepared as possible in order for it to go smoothly.  If you are the purchaser, you can expect to pay title insurance costs, which are set rates put in place by New York.  The rates will depend on the amount of the property and the amount of the loan in question

Every settlement is unique, but your attorney can give you a good idea of what you need to bring to closing.  You can discuss with your real estate agent or lender the amount of money you should have with you on the day of settlement.  While this is different in each case, you can usually get what is known as a “good faith estimate” to prepare.  The funds at settlement must be guaranteed, meaning a money order, certified check, bank check, or cashier’s check.  Prior to the actual settlement, you will get an exact number about the correct funds to bring to the closing.