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Home Closing Process: An Interview with Denis O'Leary of Neufeld & O'Leary

By Denis O'Leary

Tell us a little bit about your company and its foundation.

Neufeld & O'Leary, formed in 1990, has always maintained a strong Long Island presence, as did its predecessor firm, the Law Offices of David S.J. Neufeld (based in Huntington, New York). The firm, which has offices in Melville and New York City, is presently comprised of three partners and two associates and the founding partners have worked together for more than thirty (30) years. Although we are a general practice firm, we have vast knowledge and experience in handling residential and commercial real estate transactions.

Please explain what is needed for the home closing process:

After finding a prospective home, the purchaser should consider hiring an engineer or contractor to perform an inspection of the premises. The inspection must be arranged as soon as possible, usually before the contract is signed. nce the contract is signed, the purchaser should be aware that there are deadlines related to applying for and obtaining a mortgage, completing a termite inspection and, if the transaction involves a cooperative apartment, a condominium or homeowners association, submitting applications to the boards of such entities.

Title insurance is an additional consideration when purchasing a residential (one or two family) home or a condominium. A title insurance policy is an expense borne by the purchaser and in any transaction involving a lending institution (usually, a bank), the lender will require an additional policy to be procured on its behalf. We always recommend that our clients purchase title insurance, even in all-cash purchases; title insurance assures the purchaser that the seller has the right to convey the property. If the title company was incorrect in its assessment of the chain of title and someone other than the seller has a claim to the property, the purchaser can pursue the title insurance company in order to be made whole under the policy it purchased at closing.

Another common issue (especially during the last several years) is a lower than expected appraisal of the property. Since property acts as collateral for the loan sought by the purchaser, an appraisal that is not high enough to warrant the lender giving a mortgage in the amount sought by the purchaser leaves the purchaser with a choice: either cancel the contract and look for another property or accept a smaller loan and make up the deficit from personal (rather than borrowed) funds. Alternatively, the purchaser may apply to a different lender in the hope that a different appraiser will appraise the property at a higher value.

How does your company help this process along ?

Our firm has a long history of successfully working with title companies, the lender's attorneys and the attorneys for the other party (we represent both purchasers and sellers) in an effort to make the process move as quickly and smoothly as possible. If the purchaser is simultaneously selling their current residence, the timing of the closing of both transactions is a major consideration which must be addressed. The proceeds from the sale are often necessary in order to close on the purchase. There are also issues regarding removal of furniture and other personal property from the home being sold and how soon access to the home being purchased can be obtained.

How long can this process take?

Generally, a closing involving financing occurs between 60 and 90 days (but sometimes longer) after the fully executed contract is returned to the purchaser's attorney. The length of time between contract and closing often depends upon how soon the purchaser obtains the mortgage from the lender and whether the title report reveals any title issues which the seller must address in order to deliver clear, marketable title at closing.

What are some issues that can arise during this process and how can they be resolved?

From a purchaser's standpoint, additional issues include whether the Lender will actually issue a commitment to make a loan and whether the interest rate offered on the loan and accompanying closing costs are acceptable to the purchaser. Sometimes, a problem can occur when the contract requires the purchaser to accept a loan even if the terms are not as favorable as the purchaser had hoped. We have encountered situations where our client obtained a commitment from one lender but was dissatisfied with the terms. We advised immediately submitting an application to a different lender from whom the client received a more favorable mortgage and thereafter closed with the second lender.

From a seller's standpoint, issues that arise often involve "unmarketable" title to the property resulting from unpaid judgments, mechanic liens and back taxes. Such liens on title must be satisfied before or at closing in order for both the lender and the purchaser to be assured that title is being delivered free and clear of all claims. Issues also arise involving neighbors' fences and other boundary encroachments which must be resolved either by agreement with the adjoining property owner or by obtaining affidavits from the neighbors confirming the seller's ownership of the entire property. Your attorney should be familiar with these types of issues and have experience dealing with title companies and lenders in order to resolve these issues as quickly as possible in anticipation of closing.

What is the best way for people to reach you and or your company?

The best way to reach our firm would be to call us at (631) 549-1717 or contact us through our website, www.neufeldandoleary.com, under the page "Contact Us."

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