Please keep in mind that the following information is not to be intended to be an absolute and/or complete representation of the home selling process in New York State. However, it's intention is to give you a general overview of the process, and to allow you to understand it in it's most basic form. Information contained herein is not intended to be complete and/or to replace expert advise from qualified advisors such as a real estate attorney, a real estate agent, an engineer or home inspector, a mortgage counselor, an accountant, and an insurance agent, all of whom you may need to consult with and rely upon in connection with your planned property sale.
Property Condition Disclosure Statement
As of March 1, 2002, New York State implemented a "Property Condition Disclosure Act". This law requires that a completed "Property Condition Disclosure Statement" be provided to the buyer before the buyer is bound by a "Contract of Sale", and this statement must then be attached to the contract. Failure by the seller to provide the completed statement as prescribed by the law will result in an automatic $500 credit to the buyer at closing. This law applies to residential property with one to four units, but not to unimproved real property, new construction, condos, cooperative apartments, or property in a homeowner’s association that is not owned in fee simple. Other exclusions may exist in various situations of foreclosures, estates, transfer between co-owners, and more. Please consult a real estate attorney for legal counsel regarding these conditions.
Lead-Based Paint Hazards Disclosure
All purchasers or lessees of housing built before 1978 must be presented with the pamphlet “Protect Your Family from Lead in Your Home”. In addition, they must be provided with a disclosure form from the seller or lessor stating any knowledge of the existence of lead-based paint in the home. Should a buyer or lessee wish to conduct inspections for lead-based paint hazards in the home, you are required by law to give the buyer a 10-day period in which to conduct those inspections, unless otherwise agreed to or waived.
Carbon Monoxide Detectors
New York State law requires that all one- and two-family homes, condominiums, cooperative apartments, and multiple-unit dwellings have at least one operable "Carbon Monoxide Alarm" at the time of sale. This law went into effect in March 2003 and was amended in 2009. This amendment may be cited as “Amanda’s Law”. Make sure there is at least one working detector installed before the initial home inspection, and/or at the "Final Walk-Through" prior to closing.
Well-Water Testing Law
The Private Well-Water Testing Law went into effect in Westchester County in November 2007. It applies to properties served by private wells used for drinking water, and requires that private well water systems be tested for primary and secondary contaminants upon the sale of any real property. For leased properties, the well-water testing must be done within 12 months of the property becoming subject to a leasehold, and at least once every five (5) years thereafter. Every time a rental property subject to the Law is leased, a written copy of the most recent test results must be given to the lessee. All new private wells, prior to first use, and all private wells not in use as a potable water supply for a period of five (5) years must also be tested. Upon signing of a contract of sale for a property subject to the Law, the seller must cause a water test to be conducted in the manner provided. Testing must be done by an employee or authorized representative of a lab certified by the NYS Department of Health. The Law provides that the cost of testing for the parameters set forth in the Law in the case of a sale or lease of property be borne by the seller or lessor respectively. The results of the water test must be delivered to both the buyer and seller, or in the case of a leased property, to the lessee. The Law contains provisions on the rights and responsibilities of parties whenever testing reveals that the well water system does not meet drinking water quality standards for one or more of the contaminants tested, and sets forth specific procedural requirements placed on the parties to remediate or correct the condition to establish safe levels of contaminants. This Law does not apply to properties served by a regulated Public Water Supply where the potable water supply system either serves five or more properties or regularly serves an average of twenty-five (25) or more individuals daily for at least sixty (60) days out of the year. Properties in Westchester County may be served by private wells, community wells, or public water supply companies, so you should inquire as to the source of the drinking water for your property to determine whether or not this Law will apply. More information on this Law may be found at the Westchester County Department of Health Web site.
Offer to Purchase
A written "Offer to Purchase" is commonly used by the buyer's agent to submit an initial offer on a property. This document is not a standardized form, but should always contain the terms of the offer, including offering price, conditions (financing, repairs, inspections, etc.), inclusions of the sale, proposed closing date, and any other negotiable issues. It should be prepared by the agent working with the buyer, and should be carefully reviewed by the buyer for accuracy prior to submission tothe seller. The agents may or may not request that the buyer sign the offer.
Purchase Memorandum
Again, the "Purchase Memorandum" is not a specific standardized form, but this type of document is commonly used to memorialize the terms that have been agreed to by all parties to the transaction to reach an "Accepted Offer". This document is usually prepared by the seller’s agent or broker, and sometimes by the buyer’s agent or broker as well. A copy of the "Purchase Memorandum" is typically sent to all parties including the buyers and sellers, both parties’ attorneys, and both real estate agents.
Contract of Sale
The legal "Contract of Sale" is typically prepared by the seller’s attorney after an agreement has been negotiated, and after completion of all agreed upon inspections. The contract will be sent from the seller’s attorney to the buyer’s attorney for review and signing by the buyer, then returned to the seller’s attorney for signature by the selle. This contract is usually accompanied by the "Down Payment" or "Earnest Money Deposit" which is typically 10% of the purchase price. While many attorneys use a standard contract, the exact language and terms of a contract may vary considerably and should be reviewed thoroughly before signing.
Homeowner’s Insurance
A "Homeowner’s Insurance Policy" needs to be in place, which has to be pre-paid for one year, at the time of closing. The insurance industry now relies heavily on "C.L.U.E. (Comprehensive Loss Underwriting Exchange) Property Loss History Reports", a database of insurance claims on private properties. A property’s claim history for the past seven years, including inquiries that did not result in claims, is contained in the report. In addition to the "Property Claim History", insurance companies will also consider the claim history of the purchaser, when deciding whether to issue an insurance policy. A property or purchaser with an extensive or checkered claim history may find it difficult, expensive, or impossible to obtain homeowner’s insurance. Only the current property owner may order a "C.L.U.E." report. A buyer is allowed to ask the Seller to obtain the report and share it, or can ask the seller to supply written details of their past claims on the property. It is important to investigate the cost and availability of homeowner’s insurance early in the process, rather than waiting until just prior to closing.
Essential Home Selling Questions & Answers
Please Note: For additional information or clarification of any information provided herein,
please consult your real estate agent and/or real estate attorney.
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