We’re expanding our spotlight series to shine more light on the vast real estate ecosystem in our own backyard.
Jennifer Tierney is not only a barred New York real estate attorney, but she’s also part of the Spruce family! Prior to joining Spruce, Jen acted as underwriting counsel for a direct title underwriter based in New York City, and before that she represented buyers who were looking to purchase their dream home. Jen’s experience has given her an intimate understanding of the New York real estate process, and we’re excited to get a little more insight into her expertise.
Most buyers are surprised by how high the closing costs are associated with purchasing a house in New York. Explaining to your client that they have to bring a $20,000 certified check, and oftentimes more depending on the factors surrounding the particular transaction, is never an easy task. Closing costs typically include fees associated with title insurance, bank fees, survey costs, property taxes, and of course, the down payment. Awareness of the costs associated with purchasing a home above and beyond the downpayment is key.
As an attorney representing purchasers in real estate transactions, my priority is to ensure full transparency and understanding of the processes involved with buying a home, and to negotiate the most favorable contract for my client. Particularly, first time homebuyers are not familiar with the processes involved including:making an initial offer, going into contract, obtaining mortgage financing, title insurance, etc.
I believe that setting expectations and ensuring clients understand both the terminology as well as the processes required to get from one step to the next is essential to ensuring a smooth transaction. This also allows me, as the attorney, to develop a trusting relationship with my clients—showing them that I have their best interests in mind at all times.
Real Estate Agents
Typically, the interaction amongst parties differs by transaction and by role, but establishing a chain of communication is essential throughout every transaction. The very start of the client's transaction begins with the real estate agent making an offer on a property and ends with assisting them through what is called the "walk-through", which often dictates how and what I would need to negotiate at the closing table.
If repairs have not been made, or new issues become apparent at the walk-through, conversations and/or negotiations might occur at the closing table concerning repairs or possible credits of the purchase price. In essence, real estate agents assist clients in pointing out what might need to be addressed at the closing table and I help negotiate the terms on the client’s behalf.
Although the interaction between the real estate attorney and the direct lender is little to none, the lending processor will directly assist homebuyers with obtaining the documentation required in order to move the financing process along.
The lender also makes the first contact with the bank attorney, who plays a large role in transactions involving mortgage financing. The bank attorney will typically dictate the time, place, and location of the closing uponmortgage underwriter clearance. The bank attorney will also be responsible for collecting both the buyer and seller prorations and check requests for closing, and explaining mortgage documents to clients at the closing table.
I wish all homebuyers knew that the home buying process in New York takes longer than in most other states, particularly when obtaining financing. The initial offer to the seller is just the first step in the process. Purchasing a home can take anywhere from weeks to months, or if complexities surround the transaction, even up to a full year. It's important to understand the different parties and how their roles and the decisions they make impact the process of purchasing a home.
The worst title and closing issues I've seen arise while representing clients typically involved prior owner title issues and recent estate transactions. It is never easy to obtain information on prior owners' mortgages and liens not directly associated with a transaction, particularly if no title insurance was purchased. Additionally, unresolved estates involving deceased property owners typically wreak havoc and stammer transactions because the title insurance company is unable to insure title without proper proof and authority for the estate.
Fortunately, a majority of title issues and closing headaches could be prevented through the use of technology. As we enter a more tech-embracing world, I believe technology-based platforms that allow documentation to be easily accessible via the internet and through the use of computers and apps will help prevent a lot of the issues real estate attorneys, consumers and title insurers face everyday.
Lack of accessibility to necessary documents can be costly to the consumer and sometimes even require lengthy lawsuits to overcome. This can present many issues, particularly for sellers of lower income and older homeowners who need to sell their homes for money as they prepare to send their children to college or reach retirement. If more counties, courts and title insurers would utilize technology, the issue of "missing puzzle pieces" would lessen.
My favorite client success story involved a young couple with a baby on the way. I was a young associate at a law firm and was asked to represent the couple in the purchase of their first home. I remember the fear exuding from both of them as they handed me a check for $30,000, representing their down payment of the house they were now in contract for. They had never before given up that much money and were very concerned that something would go wrong.
I took extra care in ensuring they understood how the downpayment worked, what they were agreeing to in the contract, what the lender expectations would be in terms of financing, what the closing would look like, how title insurance worked, and what closing costs they should expect to pay. By the end of the closing, they had hugged me and thanked me for ensuring everything was seamless.
I believe the best part about working in New York is the feeling of constant energy and the diverse groups of people working and living in the city. You never know who you're going to meet, where they come from, or what their story might be. I believe the diversity of New York is what drives the energy and makes it so unique!
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