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Buying Real Estate in the Finger Lakes

Moving to the Finger Lakes, or to any new place for that matter, can be a stressful experience whether you have been transferred here by your employer, are a graduate student here for just a year or two, are looking for a nice place to retire, or are looking for a scenic vacation home. Although this is a tourism Web site, I've had many people visiting the site in hopes of finding information about buying real estate in the Finger Lakes. I've compiled the following information, which you should view only as a guide, and more specifically, a guide to buying real estate in the Finger Lakes Region of the State of New York. (Each state has its own laws, consequently information about buying real estate in one state may not apply to another.)


I highly recommend that you read books on home buying at your local library and visit the Web sites of the New York State Dept. of State, U.S. Dept. of Housing and Urban Development, and Fanniemae if you do nothing else. Although there are many pitfalls awaiting home buyers, a well-informed buyer has the best chance of avoiding them. Good luck in your search. Ronda Roaring, Publisher, ILovetheFingerLakes.com


Realtor vs. Real Estate Agent

Realtors are real estate agents who are members of either the national or state Association of Realtors. (See: nysar.com) All real estate agents operating in New York State are licensed by the Department of State of the State of New York. There are two types of real estate agents: brokers and salespersons (sometimes called associates). A broker is an agent with years of experience who has met the state's qualifications to be designated a broker. It is the broker who is responsible for running a real estate brokerage business. The salesperson works for and is supervised by the broker. Most agents showing houses are salespeople, however, some brokers do deal with the nitty-gritty of selling houses and, because of their expertise, are in demand.


Depending on who they represent, an agent may be a buyer's agents or a seller's agents. Most agents represent sellers. If you are a buyer dealing with a seller's agent, they must disclose to you that they represent the seller (and are trying to sell you a house). If, on the other hand, you hire a buyer's agent to help you find the right house for you, the buyer's agent will work on your behalf. If you decide to work with a buyer's agent, you would be wise to enter into a written agreement outlining what kind of relationship and what reasonable expectations the two of you will have and how the buyer's agent will be compensated. Disclosure (pdf)


A Good Agent Should

1) respond to phone calls and e-mails promptly.

2) be polite, friendly, helpful, know the area, and seem to have a good sense of your needs.

3) answer questions to your satisfaction and make you feel confident that the agent is being truthful.


Watch out for

1) agents who show you only their own listings or the listings of their agency.

2) agents who seem to be too busy for you.

3) agents who don't listen to you (show you a two-story house when you clearly stated you want a one-story house).


In general you should feel a type of connection or partnership with your agent. Buying a house is really a team affair. If you and your agent, as well as all the other players on your team, be they your lawyer, the lender, the title company, etc., don't work as a team, buying a house can be like pulling teeth.


Real estate agents usually work on commission (though some get paid a flat fee) and don't get paid unless a property sells. Commission is a percentage of the sale price agreed upon by both the seller and the seller's agent. The seller pays the commission to the agent at the closing. In return for the commission, the agent assumes the costs and responsibilities of marketing the property. If more than one agent is involved in the sale--both a buyer's agent and a seller's agent, for example--the commission is usually split between the two.


Most agents have access to real estate statistics on the range and median price of homes in the area, and demographics, as well as information about schools, community services, taxes, etc. Prospective buyers should review this information before beginning the search for a house.

What is MLS?

Most real estate agencies that represent sellers participate in a multiple listing service (MLS) that pools together the listings of all the agencies in the area so that you, the buyer, have access to the majority of listings in an area. (Houses for sale by owner or being sold exclusively by a single agency are usually not in an MLS.) (See also: http://en.wikipedia.org/wiki/Multiple_Listing_Service and http://www.mls.com)

What is RESPA?

RESPA stands for Real Estate Settlement and Procedures Act. It's a law established by Congress that protects consumers by requiring lenders to provide certain information (closing costs, for example) to borrowers (that they might not otherwise disclose) and to do it using uniform documents. The act is enforced by the U.S. Dept. Of Housing and Urban Development. You might find reading this law a bit dull, but I consider it essential reading. To become an informed consumer, read RESPA.

The Best Time to Be Looking

In the Finger Lakes, the greatest house buying and selling activity takes place between March and August. Most people don't want to move in the cold months when it's snowing. That means that November through February are the slowest months. However, if a house has been on the market for a long time, these months can be the best months for finding bargains.

Finding a Loan--Is Pre-Approval Right for You?

There are two ways to approach buying for a home. The first way is to look first and then apply for a loan once you've found a home you like and have agreed on a purchase price. Unfortunately, when you apply for a loan through conventional means, it can take months for the loan to close. Some sellers don't want to wait that long. In addition, if you are rejected for the loan because the lender doesn't think you qualify for that amount, you will either have to look for a different lender or a different house. This can waste a lot of time.


The second way to approach buying a home is to find a lender that will pre-qualify you for a loan up to a certain amount. Real estate agents like it when buyers have been pre-qualified because it defines the financial range within which the agent should work. If you have qualified for a loan of $200,000, the agent shouldn't be showing you houses above that amount. In addition, being pre-qualified should make the rest of the loan process easier and quicker once you've found a house you want to buy, so long as the house itself is approved by the lender.

Where to Look for a Loan?

1) local credit unions

2) local banks

3) online (See: Interest.com, Bankrate.com, and LendingTree to name just a few)

4) private investors (Local banks, attorneys, and mortgage brokers usually know who these people are. Their rates are often much higher than the norm, but they provide loans to people who have trouble getting a loan through conventional means.)

5) friends and relatives

6) mortgage broker (Watch out, these people usually charge a high fee (thousands of dollars) for their services.)

7) owner financed (There are several ways an owner can finance a home. In a rent-with-option-to-buy situation, the renter has the option to buy the house at any time, usually with the rent already paid being credited toward the purchase of the property. If the owner agrees to finance the purchase of the property, the owner becomes the lender and collects the mortgage payments. The interest rate is set by agreement of both the buyer and the seller.


A twist on the rent-with-option-to-buy situation is the lease-purchase. If you get involved in this situation, make sure you understand whether you have the option to buy or you are required to buy. You and the homeowner should draw up a contract that makes this very clear.


An owner may decide to sell the house by contract where the buyer pays so much per month for so many years, and when the full amount is paid, the buyer takes title. This method has tax advantages for the seller and some negative consequences for the buyer because the buyer never owns the property until it's fully paid. If the seller allows the buyer to do work on the property during the contract, and the contract dissolves for some reason before the buyer takes possession, the buyer may lose any payments they've made up to that point as well as any investment they've made fixing up the property.)

8) assume the seller's mortgage

9) new home builder financing

10) special funding (Depending on your circumstances and where the house is located, you or the house a may qualify for special loans that are federally funded and available through local banks. For example, a divorced woman with three children selected a 3-bedroom house in a rural area that was on a bus line to where she worked. Because she was 1) a woman and 2) divorced with 3 dependent children and because 3) the house also qualified, she was able to get a mortgage at a substantially reduced rate. In fact, her mortgage payment was $90 a month. Check with local banks about these types of loans and with real estate agents for qualifying homes.) (See also: USDA Rural Development)

Types of Loans

There are many types of loans. Here are some of the more common ones.

1) fixed rate--the interest rate never changes, so the monthly payments (principal and interest) stay the same for the life of the loan

2) adjustable rate (ARM)--this type of loan has many variations, but generally speaking, the interest rate varies depending on certain circumstances (usually the prime rate), so that the monthly mortgage rate may change often over the life of the loan. Sometimes this loan is packaged with a fixed rate for the first two years, changing to adjustable for the remaining years.

3) interest only + balloon--this loan charges you interest only for the life of the loan except for the last payment (called a balloon), which is all of the principal.

4) VA loan--made to U.S. military veterans, it usually has a reduced interest rate (See: U.S. Dept. of Veterans Affairs)

5) FHA (Federal Housing Authority) "insured" loan--It is the borrower who actually pays to insure the loan against default through the FHA by paying a huge up-front fee as well as a monthly fee called PMI. (See more on PMI below.) These loans are often used by borrowers with poor credit to encourage lenders to provide them with a loan.

Credit Worthiness

When you apply to a lender for a loan, the lender attempts to determine your credit worthiness. This is dependent on many factors, but the three most important ones are:

1) income

2) income to debt ratio

3) FICO score (FICO stands for Fair Isaac Corporation). Fair Isaac has developed a scoring system for each person with a credit history based on about 100 factors (everything but the color of your eyes, it seems). The scores range from 300 to 850. Fair Isaac brags that the higher your FICO score, the lower your interest rates. (See also: http://www.myfico.com/CreditEducation/)

Mortgage Calculator

Interest vs. APR

Interest-- the amount (given as a percentage) the lender charges you to lend you the money.

Annual Percentage Rate (APR)--Because just about every lender charges fees associated with the loan they're giving you, these fees are usually deducted from the total amount you're borrowing. (You can pay them up-front if you want, and that's probably the wisest thing, if you can manage it financially, but few borrowers do that.) For example, if you're borrowing $100,000, once all the fees and associated costs are deducted, you may have only $90,000 left to put toward the house. The annual percentage rate--interest plus fees--is what you really pay on a loan not the interest rate. If you have three lenders who offer you loans at 6%, 7%, and 8% interest, ask each one what the APR is--interest plus fees. It's usually wisest to go with the lowest APR. Remember that commercial on television: "Buy this new car now. 0% interest.*" Then down at the bottom of the screen you see, "*APR 11.25%." That means the loan has no interest but huge fees. That's not such a great bargain. So, whether you're getting a car, a boat, a house, or a credit card, it's usually best to shop for the lowest APR.

Years (term)

It used to be that a home loan was for 15, 20, 25, or 30 years. Today you can get a loan all the way up to 50 years with all kinds of variations in between, even something odd like 18 years. Select whichever term you feel is best for you.

Finding a House

1) drive around an area you'd like to live in, looking for for sale signs

2) look in local newspapers

3) contact real estate agents (They will usually make appointments with sellers and drive you around to look at houses.)

4) look for foreclosure announcements in the legal section of newspapers or online (See: http://www.hud.gov/homes/homesforsale.cfm) (See also: http://finance.yahoo.com/real-estate/article/104410/5-Ways-to-Find-Deals-on-Foreclosed-Homes )

5) look online (See: FSBO.com, ForSaleByOwner.com, Owners.com, and HomesByOwner.com to name just a few)

Mobil, Manufactured, Kits, Stick Built

There are many styles of homes in the Finger Lakes. Unlike in Europe where many of the houses are built of stone, most houses in the Finger Lakes are built of wood. There are also many types of construction. Here are the four most common types.

1) Mobile home (also called a trailer) This is a long, narrow, single-story dwelling. The entire dwelling is factory built and is trucked to the site. It is often tied down to supports in the ground rather than set on a basement. Therefore, it could be moved to another location. In New York State, this type of dwelling is actually considered a motorized vehicle like a car and has a title issued by the state Dept. of Motor Vehicles. Because of the type of construction used, it tends to have a shorter life than a regular home and, therefore, depreciates rather than appreciates. Most lenders will not provide loans for mobile homes. If this is the type of home you're interested in, you may be required pay for it in full or find an alternative source of funding.

2) With a manufactured or modular home the buyer selects a model from several available from the company. The house is partially constructed in a factory as modules and trucked to the site where the modules are put together. A manufactured/modular home is regarded by the lending and real estate industries as a true home that should appreciate over time.

3) Some companies deal in "kits" where the buyer selects a particular model from those available and all the various pieces are trucked to the site and constructed piece by piece. This type of home is regarded by the lending and real estate industries as a true home that should appreciate over time.

4) A "stick-built" home is the traditional form of house where the contractor assembles all the necessary elements for the house and buts them together piece by piece. A pine board called a "two by four," which is approximately 2 inches by 4 inches by 8 feet in size, makes up the interior wall construction. This board is the "stick." This type of home is regarded by the lending and real estate industries as a true home that should appreciate over time.

Vacation Homes

The Finger Lakes is a great place to own a vacation home. Vacation homes can be found the same ways you would find a year-round home. Here are some things to consider before you buy.

1) Will you have to maintain the property regularly--mow the grass, shovel the sidewalks, etc. Some communities have laws that require this. If you're not around much of the year, will you be willing to hire someone to do the work?

2) Will you be allowed to rent the property to others? If you purchase a ski lodge and want to rent it when you're not there, will the town or the property association allow you to do this?

3) Is the house suitable in the off-season? A house may be great in the summer, but a poorly insulated house in the winter can be very cold.

3) If you plan to make a vacation home your permanent residence, does the area have the services you'll want or need as a full-time resident? Does the area offer you enough interesting things to do in the off season so you won't be bored?


Keep in mind that time-shares may be common in some locations, but they are rare in the Finger Lakes.

Buying a Multi-family Dwelling

Buying and living in a multi-family dwelling or a house with an attached apartment can be economical and may allow you to pay of your mortgage more quickly than you would have otherwise done. Some lenders seem to be more willing to lend you money when you have the supplemental income from an apartment. An alternative to buying a house with an apartment is to buy a house and convert the basement into an apartment. Check with the local zoning or code enforcement officer before you buy to make sure this conversion is permissible.

Landlord Associations

If you become a landlord, you may want to join the local landlord association. Not only can this help you meet new people, but it can help you make contact with people who know the ropes. They can give you advice on where to buy building supplies, how to attract the best tenants, how to comply with zoning regulations, and how to deal with landlord-tenant issues.

Adults-Only Communities

There are many adults-only communities in the Finger Lakes but most are senior living facilities. To find adults-only communities check in local newspapers, online, and with real estate agencies.

Try It Before You Buy It-- Renting

Renting in an area before you buy can be a wise thing if you want to get to know the area before you start looking for a house. If you're only planning to stay in a location for a few years, renting can often be more cost effective than buying. Houses and apartments for rent are listed in local newspapers. Most cities have rental agencies that list a large number of properties for rent.

Buying an Apartment

In large cities like New York City, it's easy to find apartments for sale. In the Finger Lakes, condos and apartments for sale can be found, but they are few and far between. Only you will be able to determine if the cost of the apartment and its amenities is right for you. In some cases, if nothing is available in a building you particularly like, you may have to put yourself on a waiting list.

Home Exchanges, House Swapping, House Sitting

If you're coming to the Finger Lakes for a relatively short amount of time, you may want to consideer a home exchange or house sitting situation rather than buying a home. With more than 20 colleges and universities in the region, there are many opportunities where academics go on sabbatical for a semester or two and are in need of someone to care for their house (and occasionally the resident dog and cat). These homes are fully furnished and often come with the added perk of a car. (See: Intervac.com, Homelink.com, International Home Exchange Network. Contact universities directly for a list of academics who are looking for house sitters.)

Students Buying Homes

With so many colleges and universities in the region, a high percentage of the population are students. Some parents have opted to help their children buy homes and build equity rather than have them pay rent to a landlord. When Ringo Starr's daughter was planning to attend Cornell University, he bought her a house, just off campus on a campus bus route. Another student with the help of his parents bought a large house that he rented to other students, using the rent to pay off the mortgage and pay for tuition. As we all know, there's more to education than going to school, and owning and caring for a house can be a eye-opening experience for any student.

Taking Notes

You may end up looking at three or more houses in a single day. Over time, you may look at a dozen homes. If you don't take notes, these houses can all run together in your mind and, before you know it, you won't remember what you saw. The best way to resolve this problem is to create a visitation sheet for each house, listing the address, the style, how many bedrooms and bathrooms, and other information about the house and grounds. You may also want to bring a camera and take pictures.

The Quality of the Water vs. The Quality of the Schools

Many home buyers, especially those with school-aged children, are concerned about the quality of the local schools. They ask many questions and make judgments about buying a home based on the quality of the local schools. Rarely do home buyers ask about the quality of the water. The quality of the water in the Finger Lakes varies greatly. We have some of the best water in the country and some of the worst. Every day my well brings me clear and plentiful water, but just down the road, the water is so sulfureous, it's undrinkable and can't be used for washing clothes. And it's not just well water that's a problem. Recently I was at a town board meeting where a resident who had piped water was complaining about how dirty his water was. Yet the City of Syracuse gets much of its piped water from Skaneateles Lake, one of the cleanest lakes in the country. Always ask about the water. Ask for a clear glass and draw some water from a tap. Look at the clarity of the water in the glass. Taste it. Run the tap in the bathtub and flush the toilet at the same time. Make sure that there's enough water for you to do multiple tasks at the same time. If the house is on a well, ask if the well runs dry in the summer or when they water the garden. Make sure the house has clean, plentiful water. Without it, the house is worth nothing. That's my opinion, of course.


If a home was built before 1978, the seller is required to disclose in writing any knowledge of the presence of lead such as in paint or in pipes. The buyer is allowed to test for lead at the buyer's expense.

So You've Found a House You Like

1) Look at comparables on the market to make sure the asking price is within range for the area.

2) Talk to the town/city clerk and zoning officer about the property. If anyone know the secrets about a house--good or bad--it will be them.

3) Talk to the neighbors. They too will know some secrets. They will also be able to verify information. (I can't tell you the number of times I've heard that buyers were told that the house was in one school district, fire district, mailing district, etc. when it was in another.) Talking to the neighbors will also help you decide if these are the people you'd like to live near. If you've got children, you'd probably be happiest in a neighborhood with children living nearby, for example.

Property Tax Information

Property tax information is considered public information in the United States. You can get information about a property and how much it is assessed for by contacting either the assessor's office or the office of real property and taxation in that particular county. (Whichever office handles assessment varies from county to county.) This information is also listed online, but you will need to know the name of the office doing the assessment and considerable information about the property (its address, the town or city it's located in, etc.) to make your search worthwhile.

Appraisal vs. Comparative Market Analysis

An appraisal is conducted by an appraiser and compares one property to other similar properties in the area. A comparative market analysis is done by a real estate agent and usually costs less than an appraisal. However, lenders almost always require an appraisal, which is usually paid for by the borrower.

How much land? Rights of Way

Whether you buy a home in the city or in a rural area, you should ask questions about the land.

1) How much land comes with the house? In a rural area especially, the seller may be selling only a portion of the available land.

2) What are the plans for development around the house and in the neighborhood or town? If a shopping mall is scheduled to go up next to or close to the house, the buyer must disclose this.

3) Are there any rights-of-way on the property? These must be disclosed by the seller and should appear on the deed.

4) Does the seller have an up-to-date survey of the house and property? If not, and you decide to buy the house, you should require the seller to provide you with an updated survey before you sign a purchase agreement.

5) Are there any disputes over boundaries with neighbors? You should walk the boundaries with the seller to make sure that neither the seller nor the neighbors are infringing on each other's land. You don't want to have disputes with the neighbors as soon as you move in.

Asking Price vs. Firm

The seller will usually list a price they'd like to get for the house. This is called the asking price. If the price of the property is non-negotiable, you will be told that the price is firm. Although this may have been the case when the seller put the house on the market, things can change. The seller may be more eager to sell if the house has been on the market for some time, have reconsidered the price due to trends in the market, or just happen to have taken a likely to you and want you to have the house. If you feel the asking price is high or that it's out of your price range, make an offer that you feel is fair. You have nothing to lose and may be pleasantly surprised if the seller decides to accept your offer.

Making an Offer

People in the real estate business seem to be in agreement that buyers shouldn't tell anyone what their spending limit is. This is like showing your hand during a game of poker, which puts you, the buyer, at a decided disadvantage.


In addition, there was at one time a philosophy that buyers should offer 10% less than the asking price. What you offer depends on many things, including any extras you'd like the seller to include with the house--appliances, for example. If the seller wants more than you feel the property is worth, ask for enough extras so that you feel sufficiently compensated for the extra money you're being expected to pay. However, some people think that the more contingencies there are attached to an offer, the more reasons you give a seller to say no. Offering the maximum you can spend doesn't allow you any wiggle room if the seller begins to negotiate. Be creative. If the sellers are moving to a senior living facility, perhaps you'd be interested in taking the lawn mower and gardening tools. If they're moving abroad, perhaps you'd be interested in taking their car. There may be more in the offing than just the house and land. Make sure that whatever extras you are asking for are listed in detail in the purchase offer.

Good Faith/Earnest Money

Once you've found a house you like and have agreed with the seller to buy it, you will be asked to put down a small amount of money. This is called good faith or earnest money and is usually a check made payable to the seller and held in trust by someone (usually the real estate agent) other than the buyer or seller. You should put down as little as possible. If the seller defaults on the agreement, you'll get your money back. If you default, the seller has the right to keep the money and usually does. The earnest money is credited to the purchase price at closing.

No Handshakes

There's a philosophy in the real estate business, there are no handshakes. Someone may promise to do something, "Yes, I'll send you a copy of the appraisal." "Yes, I'll fix the screens." "Yes, I'll give you the appliances." Get it in writing. If it's not in writing, it's as good as not being said. "I don't remember telling you I'd do that!" Again, get it in writing.

Purchase Contract

If you decide to buy the property, here are some of the things you should include in the contract.

1) date of agreement

2) names of all buyers and sellers

3) purchase price, what's included, what's not

4) proposed date of closing

5) any contingencies

Caveat Emptor

The Latin phrase caveat emptor is usually translated "Let the buyer beware." New York is considered a caveat emptor state because the courts in New York have routinely ruled that the buyer should not be compensated after purchase for ordinary or obvious defects in the property. However, if a seller knows of defects and deliberately attempts to hide them or fails to disclose them with the intent to deceive, the buyer MAY have a case in court. This is one reason why it's wise to hire a structural inspector--to look for defects. However, even an inspector may not be able to find everything. If you buy a home in the winter, the inspector may not be able to run the air conditioning system to determine if it functions properly, for example.

In a Perfect World--Bad Sellers

I would love to be able to say that every person in the Finger Lakes is as honest is the day is long, but that wouldn't be true. I would also like to be able to say that all real estate sellers are honest, but that wouldn't be true either. Buying a property and then finding out that the seller has failed to disclose to you major flaws that weren't visible during the inspection can and does happen. If a seller truly knows of the defect and hides it from the buyer, that's considered fraud in New York State. The buyer's options are then to sue the seller for fraud (proof rests on the plaintiff) or to require the seller to take the property back. The buyer loses a lot of money either way. To try to avoid this, you might consider the following:

1) Run a check of the seller's name at the county court house. If there have been any law suits involving the seller, they might show up there. I was personally involved in an incident where the seller had been involved in multiple law suits, and, had I done a check at the court house, I wouldn't have wound up sitting at a table with five lawyers, signing papers to return the property to the seller. Caveat emptor.

2) Ask for a warranty. A seller should be willing to agree to a warranty against certain gross defects for a limited period of time.

3) Ask for the seller to establish an escrow account for a determined amount of time so that any unexpected problems can be paid for out of this account.


Your agreement to purchase the home should be dependent on the results of a structural inspection. This is something you pay for and costs hundreds of dollars. The inspection is designed to look as thoroughly as possible at the condition of the house and to report to you if there are any visible or suspected problems. The inspector doesn't take the walls apart, but they do go into the basement and the attic and walk on the roof. They should be experienced enough to look at the plumbing and electricity to make sure that they are adequate and operating properly. They provide you with a written report and, although an inspection isn't required by law, is usually worth the money you spend. (See: American Society of Home Inspectors or the National Association of Home Inspectors)


In New York State, when people talk about escrowing, they usually are referring to a system where the borrower pays more each month than just the principal and interest with this extra money being used by an escrow agent to pay the borrower's homeowner's insurance and various taxes. Escrowing is sometimes required by the lender but is more often selected by the borrower as a way of budgeting for monthly expenses. Let your lender know if you want to escrow your insurance and taxes.

Types of Insurance

Homeowner's Insurance (called Hazard Insurance by lenders) insures the home and your possessions against certain types of damage and you against claims of liability by others who happen to be on your property. Homowner's insurance is required by the State of New York and often by the lender. Choose your insurance company wisely. In a disaster, small companies often go out of business because they don't have the assets to make pay-outs to large numbers of their clients. Companies with huge assets seem to be able to "weather the storm" better. Insurance companies are rated. You should select a company with a high rating. (See also: Insurance Information Institute)

Mortgage Insurance insures the mortgage and pays it off should the mortgagee dies. People with dependent children living in the home should seriously consider this type of insurance. Should the parents die unexpectedly, the mortgage would be paid off, allowing the guardian and children to live in the house without the expense of a mortgage.

Title insurance is required by the lender and paid for by you to insure the lender against discrepancies with your title.

Personal Mortgage Insurance (PMI) is charged to you by some lenders and by FHA under the guise that it insures them against your default. On a $100,000 loan, the PMI can cost you $6,000 or more. It is not refundable if you don't default. PMI is usually charged monthly for many years. FHA also has a large ($2,000 or more) up-front charge listed on the settlement statement (HUD-1) in addition to the monthly fees.

The Walk Through

Just before the closing, sometimes on the same day, the buyer walks through the house to make sure that it's in the same condition it was in when the buyer made the purchase offer. If some deficiency is found, the buyer should negotiate with the seller before the closing. Sometimes a buyer will find a deficiency that is so serious that they don't want to buy the house. But these cases are rare.

Types of Title

Sole Ownership--one person holds title

Tenancy by the Entirety--multiple parties own the property equally and, when one dies, the others automatically inherit the deceased's interest in the property. Often used by married couples.

Joint Tenancy--each party owns an equal interest in the property that they can sell to someone else without approval of the other parties. If one party dies, their interest in the property is passed on to the other parties.

Tenancy in Common--each party owns an interest, but not necessarily an equal interest, in the property. When one party dies, their interest in the property can be passed on to their heirs.


There are tax repercussions with some of these ways of taking title that are beyond the scope of this article, so consult with an accountant, lawyer, or financial planner before making your decision.

Names on the Title

The way your name appears on title is also very important. Make sure you use your legal name and not a nickname, and make sure it's spelled correctly.


The HUD-1, also known as the settlement statement, is a list of all the fees involved in your transaction. If you are planning to escrow your taxes and homeowners insurance, that will also be listed on the HUD-1 as well as the payoff to the seller and often the commission to the real estate agent. You will be required to sign this document at closing. It's called a HUD-1 because the format of the document is regulated by the U.S. Dept. of Housing and Urban Development (better known as HUD) to ensure uniformity.

Deed vs. Deed of Trust

In a trust state, title is conveyed to a third party--the trustee (chosen by the lender)--who holds the title in trust until the mortgage is paid off. If the borrower defaults on the loan, the trustee is empowered by the lender to sell the property. Not all states are trust states. New York is not. In New York the borrower takes title at closing. If the borrower defaults on the mortgage, the lender must file for foreclosure directly with borrower (and the courts).

Attending the Closing

If you don't want to or can't attend the closing, you can provide someone with a Power of Attorney to act on your behalf. However, usually the buyer and seller will get together and sign all necessary documents. The seller is paid, as are any real estate agents, and the buyer gets the keys. A word of warning: It is common for the lender to wire the money to the title company who wires the money to either the seller's attorney or to the seller once the documents have been signed. No seller or seller's attorney will hand over the keys to the house without having received the money. If the closing takes place in the afternoon (especially after 2:00 p.m. when banks stop conducting wire transactions), the money can be delayed. I know of a couple who moved to the Finger Lakes from a southern state with their children and all their furniture in a huge moving van. The closing took place late on a Friday afternoon. The seller refused to hand over the keys and wouldn't allow the buyers to stay in the house over the weekend. At 10:00 a.m. on Monday morning the money still hadn't arrived.


No purchase is considered completed until the signed and notarized mortgage has been recorded at the county clerk's office. You will get a copy of the mortgage at the signing, but once the original mortgage has been recorded, it will be sent back to either the title company or the lender. They will microfilm it and shred the paper copy. The county clerk's copy, which is on microfilm as well, is considered public information for anyone to look at. 

Some of the Many Things You'll be Required to Pay for Besides the House

At the Closing

1) lender's fees

2) title fees and title insurance

3) homeowner's insurance (hazard insurance)

4) state, local, and school taxes

5) document recording fees


After the Closing

1) telephone

2) natural or propane gas

3) electric

4) water

5) sewer

6) trash pick-up

Deductibility of Fees--The Internal Revenue Service

Certain closing fees and your mortgage interest may be deductible on your taxes, but the circumstances under which they can be deducted are complex. To learn more, take a look at publications 530 and 936 on the IRS' Web site.


Updated 13 October 2013








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