When buying or selling real estate in New York State, you must have an attorney involved, and they will review and protect you every step of the way, from signing the contract to closing. With so many differences from real estate transactions in your home country, it's important to understand the New York real estate closing process.
New York Home Buying and Selling Process
- Accepting offers: Verbal agreement (not legally binding)
- Create and review contractsDrafted by seller's lawyer, reviewed and revised by buyer's lawyer
- Down payment: 10% at normal trading price (held in escrow)
- Apply for a mortgage: Bank loan approval process
- Search titles: Check for ownership defects
- Inspections: Home Health Check
- ClosingSign final documents, pay balance, transfer ownership
The role of the buyer's attorney
In New York, buyer's lawyers don't just file paperwork, they actively protect the buyer's interests:
- Review contracts: Fix unfavorable clauses, add contingencies
- Review titlesCheck for: title issues, liens, and unpaid taxes
- Attend a closingReviewing final paperwork and overseeing the transfer of funds
- TroubleshootingResponding to: breaches of contract, inspection issues, and changes in loan terms
Closing costs (buyer)
- Attorney fees: $2,000-$3,500
- Title insurance: About 0.4-0.6% of the trading price
- Mortgage-relatedBank fees, appraisal fees, points
- Taxes: Mansion Tax (1%+ for $1M and above), Recording Fee
- Escrow and more: Prepaid taxes, insurance, and administrative expenses
Expect total closing costs to be around 2-51 TP3T of the sale price.
What Korean-American buyers should know
Transferring funds overseas
If you're sending funds for trading in South Korea, you'll need to provide proof of the source of your funds. Banks will verify the source of your funds in accordance with anti-money laundering (AML) regulations, and you'll also need to file a report under the Korean Foreign Exchange Act.
Buy Permanent Resident/Non-Citizen
Non-citizens can also buy real estate in New York. However, the Foreign Investment in Real Property Tax Act (FIRPTA) may trigger withholding tax obligations upon sale, so be prepared.
Frequently asked questions
Q. What is the difference between a condo and a co-op?
While a condo is a direct ownership of individual units, a co-op is ownership of shares in a building corporation. Co-ops require board approval and have more restrictions, but they are less expensive.
Q. Can I get my down payment of 10% back?
If a Mortgage Contingency is included in your contract, then you can get your down payment back if you're denied a mortgage. Make sure your lawyer checks this clause.
Buying a house in New York, it's reassuring to have a lawyer by your side. Contact the Law Offices of Jin Dong Cho for a home sale closing consultation.
Phone: (718) 353-2699 | Email: jd@choattorneys.com
