Unlike other jurisdictions, brokers in New York City real estate sales brokers cannot hand out draft contracts for parties to sign and then be reviewed by attorneys. This means that would be parties to a sales contract must wait until the broker prepares a “set up” sheet with the basics of the transaction, contacts the Seller’s attorney, assuming one has already been selected, then wait again until a draft contract is sent from the Seller’s attorney to the Buyer’s.
A wide body of federal statutes and state statutory and common law all govern real estate transactions. The requirements established by state law often differ significantly from one state to the next.
Real estate brokers are employed as the agent of the seller in order to obtain a buyer for their property. The contract between the broker and seller is called a listing agreement. The agreement may be an open agreement where by the broker earns a commission only if he or she finds a buyer. A listing is exclusive if the broker is the only agent entitled to a commission for finding a buyer. Under an exclusive arrangement a broker may be entitled to a payment even if the seller finds the buyer without the brokers aid. Real estate brokers and salesperson are licensed and regulated by local state laws. Professional organizations may also provide further guidelines.
It is commonly required in real estate contracts that the title to the property sold be marketable. This requires that the seller have proof of title to all the property he or she is selling and that third parties not have undisclosed interests in the title.
A title insurance company or an attorney is often employed by the buyer to investigate whether the title is, indeed, marketable. Title insurance companies also insure the buyer against losses caused by the title being invalid.
In order to pass title, a deed with a proper description of the land must be executed and delivered. Some states require that the deed be officially recorded to establish ownership of the property and/or provide notice of its transfer to subsequent purchasers.
The most common method of financing real estate transactions is through a mortgage.
The Federal Fair Housing Act prohibits discrimination in real estate transactions on account of race, color, religion, sex, or national origin. See 42 U.S.C. §§ 3601-3631. Real estate brokers are specifically prohibited from discriminating by the act.
The agreement to sell between a buyer and seller of real estate is governed by the general principles of contract law. The Statute of Frauds requires that contracts for real property be in writing.
Buying a House
Before you look for a house, it’s essential to determine how much you can afford to pay and what your financing options are. You’ll also need to define your housing priorities and understand how to easily find homes that meet your needs. Even if you think you’ve found your dream home, you’ll need to master the ins and outs of house inspections and making offers. An attorney can help you find your way through the housebuying maze.
Selling a House
If you’re selling a home, you need to time the sale properly, price the home accurately and understand the laws (such as disclosure requirements) that cover house transactions. An attorney can help you get started.