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REAL ESTATE FAQs
Lauren Murray is licensed to practice law in New York and New Jersey for all real estate transactions.
What you are asking about are your “closing costs.” You should expect to pay the cost of your title search and, in many cases, a survey. In this area of New York and New Jersey, taxes are often a large portion of your closing costs. You will pay tax adjustments back to the seller. In addition, your bank may deduct funds right out of your mortgage as tax escrows. Your bank will also charge you fees and expenses, including the cost of an appraisal. There may also be attorney fees to my office and an attorney fee to your lender’s attorney. The rule of thumb is to expect your closing costs to equal between 5% and 10% of your purchase price.
Purchasers who can pay all cash for a property often have fewer closing costs.
There are also closing costs specific to purchasing a cooperative apartment or a condominium unit which may be a little different than the costs already listed above.
A seller is responsible for paying off any open mortgages or home equity lines on the property. There is also often a “pick up” fee paid to the title closer who sends the payoff funds to the lender(s). A seller also pays the realtor commissions, transfer tax to the state of residence, and an attorney fee. If there are any additional judgments or liens against the property, those must be paid at closing as well. These costs shift slightly if the property being sold is a foreclosure property or a short sale.
When you are buying a house, you are buying the building but, as importantly, you are buying the piece of land that the building rests on. A survey is essentially a blueprint or map of the property. It shows the boundaries of the property and where all improvements are located on the property. A survey will help determine whether a neighbor is encroaching on the property and whether there are any violations on the property.
A foreclosure property is a property owned by a bank. The bank took ownership of the property from a borrower who was unable to pay their mortgage. In a foreclosure situation, the bank or perhaps an investor with the bank, is the seller. A short sale property is a property owned by an individual who owes more to a bank than they will be able to obtain through a sale of the property. That individual will need to obtain the bank’s approval to complete the sale.
Interestingly, while the sale of a foreclosure property usually moves very quickly. A sale of a short sale property can take months or even over a year because the short sale lender may take a very long time to give short sale approval.
A purchaser offer in New York is not binding. Neither the seller nor the purchaser is bound to the transaction until the Contract of Sale is signed. The sequence of events in a New Jersey real estate transaction is very different.
A purchaser’s attorney usually orders the title report. A title report investigates the current and prior ownership of the property as well as any liens or debts on the property. It also investigates any land agreements that apply to the property as well as any potential encroachments on the property. The ultimate purpose of these investigations is to determine whether the seller is the true owner of the property and whether the seller can clearly and freely transfer ownership to the purchaser. If title is “clean,” then the title company will provide purchaser with a title insurance policy at closing. Purchaser pays for this title insurance as well as other title search fees and taxes as part of purchaser’s “closing costs.”
Most purchasers don’t know the difference between different types of loans, but it can be very important. An FHA loan is often available to purchasers who do not have the funds for a large downpayment. However, in order to obtain an FHA loan, the mortgage lender may require repairs to the property. This means either a seller agreeing to make the repairs or a purchaser making repairs on a property the purchaser doesn’t own yet. This can create a hurdle in any real estate transaction. It is important for all parties to know what type of loan is involved in a transaction so that the parties can decide in advance how to proceed if the lender requires repairs.
I would recommend a consultation with a reproductive attorney. Here is why. You have some important decisions to make and an attorney is an individual ethically obligated to be your advocate. You should be able to trust the attorney to give you unbiased information and guidance. One of the most important choices you will need to make is whether to locate a gestational carrier on your own or utilize the services of an agency. You can discuss the pros and cons of this choice during your consultation. There are many steps to entering into a gestational carrier arrangement. The consultation should also be an opportunity to review these steps and determine the order in which they should be addressed.
A traditional surrogate is a woman who intends to carry a pregnancy for a third party using her own egg. She is impregnated through insemination and is the genetic mother of the child she intends to give to the intended parent(s). A gestational carrier is a woman who intends to carry a pregnancy for a third party and has no genetic connection to the child she intends to give to the intended parent(s). She achieves pregnancy through the transfer of an embryo that does not include her genetic material.
Once you have matched with a gestational carrier, the next immediate step is for all parties to be both psychologically and medically screened. There is no reason to spend money on legal fees unless everyone is psychologically and medically approved to move forward with the arrangement.
The process for establishing legal parentage is state specific. When you are considering potential gestational carrier candidates, the state in which she lives or intends to deliver is important because it is that state’s laws that govern how or if you can establish your legal parentage. Your genetic connection to the child, your marital status, and your sexual orientation may all factor into what states are safe for you. Remember, when a woman gives birth at a hospital, she is presumed to be the mother. Legal work is necessary to overcome that presumption. That legal work usually begins at the end of the first trimester.
In some states, intended parents can file paperwork in the courts to obtain a legal parentage order. These orders are sometimes signed prior to birth and sometimes after. Your genetic connection to the child, your marital status, and your sexual orientation may all factor into whether you would be successful in obtaining a legal parentage order. Adoption is also a process used by intended parents to establish their legal parentage. Adoptions are filed and completed after birth only.
It is very, very rare for the intended parents’ insurance to cover the maternity medical expenses of a gestational carrier. Similarly, it is rare for the intended parents’ insurance to cover the medical costs of the embryo transfer. You should contact your insurance company to determine the breadth of your health insurance coverage. When you are matched with a gestational carrier, you will want to investigate what health insurance coverage she has in place and whether it will cover a gestational carrier pregnancy.
A gestational carrier agreement is a contract between you and your gestational carrier that sets out a multitude of terms governing your arrangement. It usually covers a wide variety of topics including compensation, term, lifestyle changes, abortion and selective reduction, communication, and confidentiality. All parties should be represented by separate and independent counsel in the review, negotiations and execution of the agreement. Usually the intended parents pay for their own counsel as well as gestational carrier’s counsel. Most fertility clinics require confirmation that a fully executed gestational carrier agreement is in place before the clinic will schedule an embryo transfer.