Residential sale closing checklist

What are the steps, in order?

1. Pull your own title report before you list. A seller-side search run before the property goes on the market finds the unreleased mortgage from a refinance twenty years ago, the judgment docketed against a similar name, and the estate that never closed. Each of those takes weeks, and weeks are cheap before there is a buyer.Before listing
2. Assemble the ownership record. Locate the deed into you, the prior owner’s policy, the survey, the Certificate of Occupancy and any letter of no objection. The prior policy matters twice: it shortens the search and it may qualify the transaction for the reissue rate.Before listing
3. Negotiate the violation allocation into the contract. Decide in the rider who cures an open violation, who pays for a permit that was never signed off, and what happens if a cure will not finish by the closing date. Silence in the contract defaults to the seller’s obligation to convey marketable title.At contract
4. Order payoff letters on every recorded lien. Order a payoff letter for each mortgage, home equity line and recorded lien, with per diem interest and a good-through date past the scheduled closing. Freeze or close any home equity line in writing, because an open line can be drawn on after the payoff figure is issued.3 to 4 weeks before closing
5. Clear the exceptions the buyer objected to. Work the buyer’s title objection letter item by item: satisfactions of paid mortgages, releases of docketed judgments, affidavits of identity where a lien names someone else, and certificates of correction where a condition was cured but never certified.2 to 6 weeks before closing
6. Prepare and execute the deed and the affidavit of title. A New York residential seller ordinarily gives a bargain and sale deed with covenant against grantor’s acts. The affidavit of title is the sworn statement that no new liens, tenancies or work were created since the search date, and it is the document that carries the gap.Closing
7. Sign the transfer tax returns. The seller signs TP-584 and the New York City transfer tax return, and both sides sign the RP-5217NYC. The transfer tax is customarily the seller’s charge on a residential resale, and the returns must be filed with the deed for it to record.Closing
8. Handle nonresident and foreign seller withholding. A seller who is not a New York resident files IT-2663 with estimated tax at closing. A foreign seller triggers FIRPTA withholding at the statutory rate unless an exemption or a withholding certificate applies. Both are calculated well before closing day, never at the table.2 weeks before closing
9. Confirm satisfactions were recorded after the payoff. Paying a mortgage off is not the same as discharging it of record. Follow the lender until the satisfaction of mortgage is recorded in ACRIS, because an unreleased satisfied mortgage becomes the next owner’s title exception and eventually your problem again.Weeks after closing
10. Keep the closing binder. Retain the settlement statement, the recorded deed, the transfer tax returns, the payoff letters and the satisfactions. They are the proof of your basis, of what you paid, and of what you discharged.After closing

Which documents do you need?

• Deed executed and acknowledged by every record owner
• Affidavit of title covering the gap between the search date and recording
• Payoff letter and, after closing, a recorded satisfaction of mortgage for each lien
• TP-584 signed by the seller
• RP-5217NYC signed by both sides
• NYC real property transfer tax return
• IT-2663 estimated tax payment where the seller is a New York nonresident
• FIRPTA certification, or withholding, where the seller is a foreign person
• Smoke and carbon monoxide detector affidavit
• Certificate of Occupancy, letter of no objection, or the sign-off record for prior work
• Keys, garage remotes, alarm codes and any building fobs
• Power of attorney, in recordable form, if a seller will not attend

Which searches does this transaction call for?

• Seller-side title search run before listing, so the cure time comes out of the marketing period
• Judgment and federal tax lien search against the seller’s name and every variant of it
• Bankruptcy search against the seller
• Payoff and lien search for home equity lines that remain open of record
• Tax search for arrears, assessments and any pending tax lien sale
• DOB, OATH (formerly ECB) and HPD violation searches, run early enough to cure
• Open permit search for work done during the seller’s ownership
• Estate and surrogate search where a prior owner on the chain died

What else should you read before closing?