These are the steps to follow in a successful New York home purchase:
Determine affordability – A home is the largest single investment you have probably ever made. The first question has to be “Can you afford the home you’ve chosen?”. Hopefully you’ve reviewed this before making an offer but if you haven’t this would be the time to take a hard look at the numbers and to make sure they still make sense to you. At closing you will have to pay the price for the home and closing costs. Usually the bulk of the purchase price is paid with a mortgage loan. Your monthly mortgage payment will generally cover principal and interest on you mortgage loan, real estate taxes and property insurance (not always). Afterward, you will need to budget for that payment, maintenance, utility bills, and repairs. Remember there are tax advantages to home ownership that you need to consider as well. To avoid surprises, examine the seller’s bills to get an idea of the monthly expenses for the home. Also check the age and condition of appliances, plumbing, roof, structures and wiring since they might need repair after your purchase.
Make your offer – You’ve made your bid. You now must wait until you are notified that the seller has accepted it. Once they have you may be asked to sign a “Binder” and to put down a token amount of money ($100 is common). If you are don’t worry, binders aren’t binding in New York unless they contain all of the essential elements of the transaction. They are usually not prepared that way but are prepared just to outline the basic agreement and to reassure both buyer and seller (and maybe the broker) that there is really a deal. If you are in doubt, mark the binder “SUBJECT TO ATTORNEY APPROVAL” and see your attorney within some reasonable period thereafter.
Hire your attorney – At this point you are going to have many questions and you will be called upon to do a number of things in a very short period of time. Since most attorneys charge a flat fee for their services, hiring an attorney early in the transaction will allow you to have a resource available to help you separate what you must do from what others want you to do
Home Buying Tips – Choosing your attorney
How long has the attorney been in practice?
How many transactions have they handled?
Do real estate transaction make up a large part of their practice?
How long have they been practicing in this field?
If you would like an initial consultation will the attorney agree to meet with you? If so, will they charge for it? How much?
Will you be charged a flat fee or will you be charged on an hourly basis. Hourly billing for residential real estate transactions is unusual and, potentially, extremely costly
Given the nature of your transaction, does the attorney believe that he is familiar with the resolution of any anticipated problems?
Recommendations from real estate brokers and salespersons, mortgage brokers and bankers and others working full time in the field will generally yield the names of experienced attorneys
DETERMINE THE CONDITION OF THE PROPERTY – It is important to check the condition of the real estate before you sign the contract. If you choose, you may have the premises inspected in advance by a professional or a knowledgeable friend before you are legally bound to buy it. The cost of repairs (or the performance of the repairs themselves) may be addressed in your purchase contract if the seller agrees. Because, as a general rule you accept the condition of the property when you sign the contract (subject to a final inspection before the closing), it is best not rely on the Sellers’ representations about the condition of the house.
Home Buying Tips – Your engineer
You’ve found the house, you’ve selected an attorney and now yet another professional is needed to help you make the right decision, an engineer. The engineer is going to help you decide if you’re really going to buy the house you’ve found. A good engineer will review all the major systems in the house (plumbing, heating/cooling and electrical, etc.) and will thoroughly inspect the structure itself. He’ll see things you wouldn’t even know to look for!
Choose your engineer carefully – Ask your friends, co-workers and family for recommendations of an engineer they have used and been happy with.
Go with the engineer – You must walk through with them. See what the engineer may be concerned about. Don’t wait for a report and then try to figure out what he means
Take notes – You’ll never remember everything you’ll want to review afterwards.
Special inspections – You may have unique features at the home you’ve chosen (swimming pool, septic system, central air conditioning, etc.) that are better inspected by specialized inspectors from that field. Ask the engineer for recommendations
Ask Questions – While you are walking through the house with your engineer he’ll answer anything. That’s the time to ask
SIGN YOUR CONTRACT – OK, the moment of truth is at hand. You will meet with your attorney and review the contract, generally prepared by Sellers’ attorney. Any promises made by seller or broker must be put into the contract. Your attorney will make sure you are protected legally and you will help him identify terms that are unique to your purchase that he will make sure are made a part of the contract. You’ll sign and send the contract back with your down payment check (generally 10% of the purchase price, but frequently less). If you make changes there may be more negotiations before the seller signs.
MAKE APPLICATION FOR YOUR MORTGAGE LOAN – Hopefully you’ve been shopping around and you know where you want to apply. Although in many cases you will have applied prior to contact, if you haven’t you generally should submit the application no later than a week after the contract is fully signed.
COMPLY WITH LENDER REQUESTS FOR INFORMATION – It is important that you provide any information or documents requested by your mortgage lender as quickly as possible. This will reduce the time required to approve your loan.
OBTAIN AND REVIEW YOUR MORTGAGE COMMITMENT – Careful. Sometimes the commitment isn’t exactly the loan you applied for. Check the interest rate, points, origination fee, fixed rate or adjustable and the amount of the loan. Make sure it’s what you expected and if it isn’t notify the bank and your attorney immediately. Send a copy of the commitment to your lawyer.
PURCHASE HOME OWNERS’ INSURANCE: You will probably be required to bring a homeowners’ insurance policy to closing proving you have insurance as required by your lender (check the commitment for requirements). You will also need a receipt showing that you have paid the premium for one year. There may be other requirements too, so ask your insurance agent to call the lender well before the closing to be certain that the policy is correct.
UTILITIES AND TELEPHONE – As soon as a closing date is set, you should notify the telephone company about the change in your service, and to notify all utilities of the closing date. These include electricity, gas, water and sewer and cable TV, If your new house uses fuel oil, shop carefully for a provider before the closing. disposal.
FINAL INSPECTION – After a closing date has been set, call your Realtor to arrange for a final inspection of the property. The home should be in the same condition it was in on the date of the contract, with the exception of ordinary wear and tear, unless your contract specifically provides otherwise. Usually you’ll also be checking to make sure plumbing, heating, electr9ical systems and appliances are in working order and the roof is free from leaks.
REVIEW LENDER REQUIREMENTS AT CLOSING – Review your mortgage commitment letter and check with your mortgage lender before closing. Lenders sometimes ask that you bring last-minute documentation with you.
GET CLOSING FIGURES – Exact closing figures are usually not available until the business day before the closing. Once they become available, your attorney will calculate the amount you will need for closing and call you with that information. Please let your attorney know how to reach you the day before closing.
BRING PROPER FUNDS FOR PAYMENT AT CLOSING – Payment to the seller must be made by Certified or Cashier’s check . Consult your attorney for details. You must bring your checkbook also, there are usually a number of small expenses (tax and fuel adjustments, title charges, attorney fees, etc.) to be paid at closing.