The Property Banks Buyers Guide to America
STANDARDIZED PROPERTY
Property value: 2,104,828
City: New York City
Registration Requirements:
Procedure 1*.
Obtain
a title report
Time to complete: About 10 days
Cost to complete: 1200
Comment: A title report is obtained from one of many competing
private companies, regulated by the state. Fees for title insurance
are set by state regulators. Fees for services vary.
A title report is not technically mandatory, but is routinely used
to analyze the quality of title. A title report is an essential
prerequisite to securing title insurance. No title company would
offer title insurance without a title report tracing the deed
history and clearly articulating the liens, covenants and other
limitations on title.
A title report and title insurance are typically required by
lenders.
Procedure 2*.
Conduct
an environmental review
Time to complete: varies depending on factual circumstances
(According to the assumptions of the case study, it is assumed that
no violation nor problem is found in the first phase of the review,
and that the whole procedure does not take more than the 10 days
that it takes to obtain the title report in Procedure 1)
Cost to complete: depends on nature and extent of contamination, if
any
Comment: The environmental review is typically conducted by a
private firm specializing in the field.
It is not technically "mandatory," but a prudent investor will
routinely require an environmental review and no bank would ever
advance a commercial mortgage without conducting an environmental
review.
The environmental review may have up to 3 phases:
1. The history of the property in the public records is analyzed to
check if there was any record of contamination or any violation.
2. If yes, an inspection of the property takes place, where some
samples are taken
3. Clean-up phase if needed.
Procedure 3.
The
buyer obtains and fills the forms needed for the transfer
Time to complete: 1 day
Cost to complete: $55 + 0.4% of property value (state forms +
transfer tax)
Comment: The buyer must obtain and fill the NYS Transfer Tax Form
TP-584 regarding real estate transfer tax, and the NYS Real Property
Transfer Report (Equalization) Form RP-5217.
The state forms RP-5217 and TP-584 are available in many local
government offices and on the Internet.
Additionally, the property disclosure form is typically drafted by
the attorney for the seller and given to the buyer prior to or at
closing.
The title deed is usually prepared by the seller.
The fees for state forms RP-5217 ($50) and TP-584 ($5 + 0.4% of
property value) are typically collected by the title company at
closing, prior to recording, and must be paid to the state upon
filing the deed for recording with the registry.
It is common practice to obtain title insurance from one of the
competing title insurance companies. (The cost of title insurance,
according to New York State Title Insurance Rates for Zone 2, will
cost an additional $7,978.)
The title insurance can only be acquired at closing, after the
transaction has been completed between buyer and seller and the
price has been paid.
Where financing is involved, the lender typically requires the
purchaser to obtain insurance as a condition of the loan. There is a
separate mortgage recording tax required to be paid, in addition to
the real property transfer tax.
The title insurance company will take the responsibility of
recording the title at the county clerk.
Procedure 4.
The
title is recorded with the County Clerk
Time to complete: 1 day
Cost to complete: $28 + $ 3 per page (assuming that the title
consists of about 12 pages)
Comment: The transfer deed (together with the applicable tax forms
and payment) is then presented to the applicable public official,
e.g. county clerk, for recordation in the public records of the
jurisdiction. The date of acceptance of the deed by the clerk is the
date which controls for transfer purposes. Nonetheless, it often can
take many weeks (and even months) for the actual recordation to take
place and become available on the public record. In other places,
though, this can happen almost immediately.
Although the law states that title passes upon delivery of the deed,
where there are competing claims the law recognizes the 1st recorded
deed.
The title insurance company usually takes the responsibility of
recording the title at the County Clerk, paying the fees for state
forms RP-5217 and TP-584
The documentation shall include:
Title deed
NYS Real Property form TP-584 on real estate transfer tax
Property Disclosure Form
Real Property form RP-5217
Title Insurance