Real Estate Services You Need to Close: Attorney, Mortgage, Title, Insurance

When you are buying a property in NYC, there are four real estate services you will need:

Real estate attorney (contract of sale)

Mortgage broker or direct lender (financing)

Title insurance (insurance)

Home owner’s insurance (insurance)

1. Real Estate Attorney

One of the most important decisions you can make when buying a house in NYC is to hire the right lawyer. You’ll need a lawyer who is a real estate specialist as opposed to a general lawyer.

It’s important that you speak to a few and find one you get along with who has the specific expertise you need. There are many real estate-focused law firms, ranging in size from the very small (1) to the fairly big (50).

If your transaction is on the simpler side, a smaller firm should be fine. If there are complexities, a larger firm can offer a team of lawyers with different skills. These skills may include contracts, tax, co-op boards, offering plans, landmarks, leasing, commercial, and mixed-use.

2. Mortgage Broker or Direct Lender

The personality of a mortgage broker or direct lender is less important than that of a lawyer. The personality of the mortgage, however, is crucial! The mortgage broker or direct lender heads up the financial part of your key real estate services.

If you have stellar credit, a great high-paying job, and a lot of money in savings, you shouldn’t have an issue qualifying for a mortgage. Most banks will be willing to do business with you. The bank will be your direct lender.

However, if you are self-employed, have so-so credit and limited savings, you’ll want to seek out a lender who has the best loan program for you. Generally, mortgage brokers are better for more nuanced loans as they offer a wide selection of loan products for you to choose from.

In NYC, there are many lenders to choose from. These range from large national banks, to more regional lenders, to local community banks.

However, if you are buying in a new development, you must look carefully at the percentage of units that has been sold. If the number is lower than 15%, many lenders may not be able to lend. Others may not be able to lend below 35% sold, while some will not lend below 50% sold.

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3. Title Insurance Company

Title insurance is the least well-understood real estate service you need to acquire. It protects a property buyer against competing claims related to ownership of the property. For example, title insurance will protect you if you buy a home on which heirs actually have an omitted claim.

Many buyers let their attorney or mortgage company pick the title company for them and don’t realize that they can pick the title company. Depending on the size of your transaction, it is possible that title insurance can be the single largest closing cost.

After you have selected your real estate attorney, you should ask them which title companies they work with. Remember, just like legal fees, the cost of title insurance is negotiable, and you can shop around.

4. Home Owner’s Insurance Company

Home owner’s insurance protects you in the event of a problem, such as a fire, flood, or other damage — and helps your lender gain confidence in your ability to repay your loan.

There are vast options for home owner’s insurance in today’s market, and as for mortgages, these include both brokers and direct insurers. You can easily shop for price and benefits, buy a separate policy, or bundle it with other forms of coverage.

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Top photo courtesy of Madison House – Seaport – Manhattan.