Q: The closing on our new home was done electronically rather than in person. We assumed that our real estate agent told us everything we should know about our purchase, but we found out about expensive aspects of the home — such as a second homeowners’ association and a separate HOA tax — after the closing. Should we have demanded an in-person closing? Are there risks that first-time buyers should be aware of before they agree to a remote closing?
A: Real estate closings are momentous occasions. It’s the last step in the process: documents are signed, money is transferred and keys are handed over.
Most closings are conducted in person, so the attorneys, brokers, notaries and buyers can all communicate closely and iron out any last wrinkles in a deal. But remote closings, which allow buyers and sellers to finalize a sale without being in the same room, are legal in many states and became increasingly popular during the pandemic, including in New York.
It’s certainly more convenient to not have to assemble all those people in one place at one time. But consider whether the convenience is worth it.
“It’s easier to have people in a room talking to each other,” said Lisa K. Lippman, a broker at Brown Harris Stevens in New York.
First-time buyers, especially, should press for an in-person closing so they can fully comprehend the process, all of the documents involved, and any last-minute issues that crop up.
Remote closings can also take longer, as documents and checks move among parties at different locations. When everyone is together, the process often moves more smoothly; if one participant raises an issue, it can be addressed at the table.
Special circumstances, like illness or distance, may make a remote closing unavoidable. No matter what, make sure that you get the closing statement ahead of time, Ms. Lippman said. This document should list all financial aspects of the transaction.
But your question raises another issue: doing due diligence about your purchase long before the closing date.
“Whether you have an in-person or a remote closing, it’s a matter of the information you’ve gathered beforehand,” said Andreas E. Cristou, an associate attorney with Woods Lonergan PLLC.
Fees, assessments, taxes, and maintenance or common charges should be disclosed before you sign a contract to buy the home. If, say, your sellers’ tax bill is low because of tax breaks they might receive, or if you will have to pay a “mansion tax,” you should know that, too. Your broker and lawyer can be good resources, and if you’re buying in a building or homeowners’ association, you can ask the board or building management for information about the costs to live there.
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