If you have never owned property before and are currently in the market to buy a home in New York, it may come as a surprise to learn that you are required to use a real estate attorney in your transaction. New York is one of the few states that requires an attorney to represent the buyer as well as the seller.
Property buyers and sellers, especially from other states, may think they can handle the transaction on their own. However, once you start to look into the process and find out about "closing dates" in New York, you might find that you are glad to have an attorney by your side!
“On or About” Closing Dates
In most states, the closing date listed in a real estate transaction is a hard target. Both the buyer's and the seller's agents will work backward from that date to make sure all the steps are completed, including securing financing, inspections, and appraisals. The agents might also add in a little padding around each step to allow for any unforeseen events, such as the appraiser getting the flu and not being able to conduct the appraisal on a certain date.
In New York, closing dates are fluid. Most New York real estate contracts will include "on or about" language for the closing date, such as “on or about March 1, 2020.” This is because the courts have interpreted the “on or about” date to mean that both sides of the transaction have a right to a reasonable amount of time to close the transaction.
Time is of the Essence Letters
More often than not, a transaction will close within 60 to 90 days after a buyer and seller have agreed to a purchase contract. But if something goes wrong, such as the buyer isn't able to secure financing, then the seller's attorney may send a “time is of the essence” letter to the buyer's attorney. That letter will set another closing date. If the buyer cannot meet the new deadline to get financing, then they will be considered to have defaulted on the contract.
The New York Supreme Court issued an order in a lawsuit in 2018 to provide some interpretations for “time is of the essence” letters. In its ruling, the court stated that the notice making time of the essence must:
“(1) provide clear, distinct, and unequivocal notice to that effect, (2) allow the other party a reasonable time in which to perform his [or her] obligations, and (3) tell the other party that a failure to perform by the designated date will be considered a default under the terms of the contract.”
New York Real Estate Closing Professional
These are just some of the intricacies involved in a New York real estate transaction. It is impossible for even the savviest or experienced homeowner to understand all the workings that go on. If you have questions about a commercial building or home you want to buy or sell, contact a New York City attorney who can provide the answers and peace of mind you deserve!