What to Expect at a New York Real Estate Closing

Buying or selling a home in New York is different from the process in many other states. Here, attorneys for both sides negotiate the contract of sale, and much of what determines how the transaction goes is decided in that document — before a bank, an inspector or a title company has done anything.

Stage 1: Before the contract

An accepted offer is not a contract. Between acceptance and signing, the contract of sale is drafted and negotiated between counsel. This is the moment with the most leverage and the least public attention.

Things typically addressed here include what is included in the sale, the deposit and how it is held, the condition of the property, what happens if financing is not obtained, closing timing, and what each side must deliver.

Stage 2: Due diligence

After the contract is signed, several processes usually run in parallel:

• Title. A search of the record for liens, judgments, easements, prior mortgages and gaps in the chain of ownership. Issues found here are almost always easier to resolve before closing.
• Survey. Where applicable, confirming boundaries, encroachments and improvements.
• Municipal searches. Open violations, permits and certificate-of-occupancy questions.
• Financing. The lender's underwriting, appraisal and commitment.
• Building documents. For a condominium or co-op, the offering plan, financials, minutes, house rules and the board's requirements.

Stage 3: Contingencies and the commitment

Contracts often contain conditions with their own timing — a mortgage contingency being the most familiar. These provisions have practical consequences: acting on time preserves rights, and missing a date can affect a deposit. Whatever the contract says about notice and timing should be treated as governing.

Stage 4: Co-op and condo approval

A condominium purchase conveys real property. A co-op purchase conveys shares in a corporation together with a proprietary lease — legally a different animal, with a different set of documents and, usually, a board package and interview. Timelines here depend heavily on the building.

Stage 5: The closing

At the closing itself, the documents are executed, funds are transferred, adjustments are calculated, and possession is arranged. Depending on the transaction, the parties may attend in person or the closing may be handled in another manner.

Before that, a walk-through of the property is customary, to confirm that the condition matches what the contract required and that anything that was to remain has remained.

Stage 6: After closing

The transaction is not finished at the table. The deed and mortgage are recorded, transfer documents are filed, and title insurance is issued. Keep the closing package. It will be needed the next time the property is sold, refinanced or passed through an estate.

Where problems tend to appear

• Signing the contract before review. The single most consequential avoidable mistake.
• Open violations or permit issues discovered late, when there is less time and less leverage.
• Title defects that require a prior owner, a lender or an estate to act.
• Financing that changes after the commitment, sometimes because of a change in the buyer's circumstances during the process.
• Estate-owned property, where the authority to sell must be established. This overlaps with wills, trusts and estates work.

The general point

A closing looks like a single event but is the end of a process with many moving parts. The work that makes it uneventful happens weeks earlier. This article describes how these transactions generally proceed; it is not legal advice and does not describe your particular transaction. For that, see the office's real estate practice or request a consultation.