Real Estate Frequently Asked Questions

When is the home inspection (engineer's inspection done)? Before or after contract?

An inspection is scheduled after the parties have agreed upon the purchase price. Many lawyers and real estate agents prefer to have the inspection completed (but the report not yet provided) before the Contract of Sale is drafted.

Who gets the interest from the Contract Deposit at closing?

The Contract Deposit (frequently called the “Contract Down payment”) is most often deposited in an attorney's IOLA account. Any interest accrued is paid to a fund set up by the State of New York. Thus the contract deposit without interest is given to the party entitled to it, at a closing, to the Seller. If the transaction does not close, the deposit could be given to either the Seller or Purchaser depending on the terms of the Contract of Sale and why the transaction did not close.

If a survey is required, who pays for it?

If the Purchaser's bank is requiring a new survey (because the old survey is too old or not properly certified), the Purchaser pays for the new survey.

Should the Seller hire their own home inspector?

Generally it is the Purchaser who hires the home inspector, after the parties agree on a purchase price. However, the Seller may hire their own inspector to refute the findings of the Purchaser's inspection. A Seller may also want to hire an inspector before the house is put on the market to know the condition of the building and determine whether they want to do repairs or sell “as is”.

What is the difference between title insurance and homeowner's insurance?

Homeowner's insurance covers replacement of the building in case of fire, theft and damage. It also may provide insurance if someone gets injured on the property. The title company searches the land records and insures that the chain of title allows the Seller to transfer the property to the Purchaser. The title insurance policy is only up to the amount of the purchase price unless you opt for the “market rider”, which insures you to the fair market value of the property.

Is the closing date in the Contract of Sale the actual date of the closing?

No. Usually the closing date is “on or about” a date certain. Once the Purchaser's lender is ready to close, the attorneys coordinate a closing date and time convenient to all parties. That date may not be the date on the Contract.

Do I need a lawyer to represent me if I am buying real estate in New York?

Yes. Although in some other states lawyers may not always be used for real estate transfers, lawyers are generally retained in New York State for real estate transfers.

Buyer's Corner

Seller's Corner