We are now in the midst of the Spring real estate market which is turning out to be one of the strongest ones in years. With low interest rates and more people continuing to work from home, buyers are out in force looking for properties all over the NY Metropolitan area. With the City opening back up, younger buyers are moving into Manhattan, Brooklyn, Queens, etc. while families are looking to relocate to the suburbs. Often these moves involve going between New York and New Jersey. So, in Part II of this article, I am going to address some additional NY/NJ differences in residential real estate transactions.
Downpayment: In NY, the downpayment is sent to the seller's attorney along with the signed contract, prior to the seller signing the contract. In NJ, it is sent after the contract is signed usually 3-10 days after the conclusion of the attorney review period. Certificates of Occupancy: In New Jersey a new certificate of occupancy is required by the borough or village prior to closing. In NY, depending on the county, no new C/Os are necessarily required at closing. However, they may be required if certain types of work were performed at the house. Surveys: In NY, if there is a recent, existing survey that can be updated, a new survey will not necessarily be required. In NJ, a new survey is almost always ordered. Closing Date: In NY, closing dates are very approximate and noted as "on or about" in the contract. This gives either party the right to adjourn the date for up to 30 days after the stated closing date. In NJ, the closing date in the contract is a better estimate of the actual closing date. Either party can generally only adjourn 10-15 days from the date in the Contract before the other side will send out a Time of the Essence Letter. In NY, TOE letters are used extremely rarely. Closing Agent: In NY, if there is a lender (which there usually is), the lender will be represented by a lender's attorney who will act as the closing agent. In NJ, the lender does not have a separate attorney and the closing agent will be the title insurance company. Attendance: In NJ, the seller usually pre-signs the deed and other transfer documents prior to closing so that neither the seller or their attorney attends the closing. In NY (pre-Covid) all parties were usually at attendance at the closing other than in unusual circumstances (e.g. an estate or out-of-state seller). Payments: In NY, checks or wires in the amount of the purchase price, are made by the buyer or their lender directly to different parties to the transaction (e.g. seller, real estate agent, title co.) at the seller's direction. In NJ, all funds are wired to the title company who then disburses them after the closing to the appropriate parties.
As you can see there are both substantive and procedural differences in New York and New Jersey real estate practices. So, when buying or selling, it is important to use an attorney who is familiar with the practices in the state where the property is located!
Enjoy the nice weather and the home shopping! Reach out any time with questions.
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