Each week, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.
Developers and investors are continuing to look for opportunities outside New York City. Three factors are driving this trend:
- Homeowners looking for more space
- Developers creating opportunities in the upper counties
- Institutional capital doubling down on SFR (single-family residence) portfolios
A new development in upstate New York near the Catskills called Modern Cabin that includes 20 prefab cabins, each 1,800 sq. ft., 3 bedrooms, 2.5 bathrooms. This complicated transaction involved the purchase of 20 lots for $5 million.
Fee Policy $20,000
Title Fees: $10,000+
NYS Transfer Tax: $20,000
County Recording Fees: $5,000+
Title Grade: Very complex with 20 different lots
Subdividing a large lot into smaller lots, each with its own identifier can be complicated, as our friends at JGR Capital Group discovered when they sought to fill the demand for high-design, group-friendly lodging near the Catskills.
This project was complex with 20 separate lots which required 20 title searches.
Typically, the developer pays all title costs initially, and each purchaser pays their own title costs as each lot is developed and sold. On new construction, the purchaser may also have to pay transfer taxes (normally paid by the seller). This can be negotiated with the developer.
When acquiring property for a new development, you want to start the title process as soon as you’re interested in a specific parcel. Not only can this avoid delays later on, but the title company’s due diligence may also uncover factors that affect the purchase.
If you have any questions about surveys or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.