How to Close on a House in Long Island
Buying or selling a house in Long Island - or most places, for that matter - often takes longer than you expect. Here's why: After the buyer and seller agree on a price, there are still many more steps that occur before closing. While a buyer will have pre-approval for a maximum loan amount from a bank, the buyer will now have to contact the bank in order to draw up documents relating to the specific loan amount that the buyer will need for this transaction. If started right away, this part of the process should not impede the actual closing, but it can take time if the lender requires various conditions be met before closing.
Once a buyer signs a "binder" with a seller agreeing to purchase the property, the buyer can now purchase insurance on the property and also begin the potentially long process of obtaining a clear title report. A title company will search public records in various forms to determine if there are any "clouds" on the title to the property. Clouds on title appear in the form of liens or judgments against the property, usually because its owner(s) are involved in a legal action. Buyers will want to purchase "title insurance" in order to protect themselves from losing their newly purchased property to someone who had a lien or judgment against it before the buyer came along. This way, the title insurance company will deal with any subsequent challenges to a clear title, rather than the new buyer.
The agreement to purchase the house is usually conditioned upon completion of an engineer's report and termite inspection. If infestations of termites or serious engineering defects are found, the entire deal may be called off by either party if they cannot come to an agreement.
Finally, the terms and conditions of the sale must also be negotiated. This process can take time because each side will want to make sure that they are not only protected, but that they are also getting the best deal possible. This can require multiple drafts of a long document, which is why both the buyer and seller should have their own attorneys involved. It is nearly impossible to estimate an exact date that the closing will take place due to the various factors involved. Even under normal situations, closing a deal may take a few months; so under exceptional circumstances, the parties should expect closing to take many months.
Once a buyer signs a "binder" with a seller agreeing to purchase the property, the buyer can now purchase insurance on the property and also begin the potentially long process of obtaining a clear title report. A title company will search public records in various forms to determine if there are any "clouds" on the title to the property. Clouds on title appear in the form of liens or judgments against the property, usually because its owner(s) are involved in a legal action. Buyers will want to purchase "title insurance" in order to protect themselves from losing their newly purchased property to someone who had a lien or judgment against it before the buyer came along. This way, the title insurance company will deal with any subsequent challenges to a clear title, rather than the new buyer.
The agreement to purchase the house is usually conditioned upon completion of an engineer's report and termite inspection. If infestations of termites or serious engineering defects are found, the entire deal may be called off by either party if they cannot come to an agreement.
Finally, the terms and conditions of the sale must also be negotiated. This process can take time because each side will want to make sure that they are not only protected, but that they are also getting the best deal possible. This can require multiple drafts of a long document, which is why both the buyer and seller should have their own attorneys involved. It is nearly impossible to estimate an exact date that the closing will take place due to the various factors involved. Even under normal situations, closing a deal may take a few months; so under exceptional circumstances, the parties should expect closing to take many months.
Source...