Buying your home is one of the most important financial transactions you will probably ever make in your life. We hope that we can help you and ease some of the stress that is often associated with this process. We outlined below how we plan to assist you and what you can expect by working with a William Raveis Legends Realty Group agent.
New York State has very specific agency disclosure laws that govern the way real estate agents work with their clients and customers. Upon first contact, all real estate agents, by law, muct walk you through the "443 Form" put forth by the state that explains agency. You will be asked to acknowledge this document and provided with a copy of it.
Once you selected an agent to represent you (hopefully me), you will be asked to sign a contract known as the "Exclusive Right to Represent Agreement". This contract will lay down the more specific actions that the real estate agent will take to accomplish the task, as well as fundamentals of the partnership.
The Home Buying Process - In The State Of New York
Your Comfort Zone & The Search
- You should have a general idea what you are looking for in your new home, such as type and style you like, it's size, how many bedrooms, baths, garages, etc. Our agents will do their very best to locate homes that meet all of your criteria and show them to you. In addition, they will introduce you also to anything and everything else that meets some or most of your needs.
- Your William Raveis Legends Realty Group agent will use various resources to find properties for you including, but not limited to, the Multiple Listing Service (MLS), the Internet, print advertising, word of mouth and Realtor networks. All of them are presented to you and your agent will make arrangements to show you the ones selected by you for closer and personal perusal.
- We also know where to look, find and verify, any and all pertinent details about any properties that you are considering for purchase. This includes, but is not limited to, finding open permits, violations, and confirming size and features of a property as filed with the building department, as well as confirming current taxes and possible tax credits. This is a very important step since the results of such searches will have a great impact on any future negotiations.
- It is also imperative that you consult with your agent before inquiring about or viewing any properties that you may find on your own, so that you do not adversely affect any future negotiations and purchases. When you attend open houses on your own you should always let the showing agent know that you are represented by us. This will save you from being solicited by the showing agent. It will save you time and prevents confusion.
- Are you pre-approved for a mortgage? What is your budget? It is critical that you address these questions before you even start your search. By knowing your purchasing power you avoid dissapointments and/or mistakes by preventing you from searching in the wrong price segments, and it saves you a lot of time.
- All offers must be accompanied by documentation showing that you are a qualified purchaser. The most common form used is a pre-approval letter from your lender, which verfies that an actual application has been completed with the lender and a credit check has been done.
- Although this pre-approval letter is still subject to a final review and verification of income and/or assets, it assures you that your offer will be seriously considered by the seller.
- Ask your real estate agent for recommendations regarding lenders, if necessary.
- The offer is usually submitted in writing on an "Offer to Purchase" form. Once your offer has been presented by your agent, most sellers will come back with a counter offer, paving the way for possible further negotiations.
- Once an agreement is reached on the sale price, terms, personal property to be included/excluded in the sale, conditions, contingencies, inspections and financing, your agent will let you now that you know have an "Acceptable Offer.
The Acceptable Offer
- An acceptable offer is a verbal agreement that both, you, and/or the seller can walk away from at any time. At this point, you should have an attorney in mind whos services you will use for this transaction.
- Ask your real estate agent for recommendations regarding attorneys, if necessary.
- If an engeneering inspection is part of the terms of your offer, it should be set up as soon as you have an acceptable offer. It may include termite, vermin, radon, pool and septic system (if applicable) inspections as well.
- If the home you are purchasing was built before 1978, you will be required by United States code (U.S.C. 485D) to sign off on a "Lead Paint Disclosure" form and your agent will give you a pamphlet that explains lead paint.
- If the house is fueled by oil, the heating system, the feed lines and the oil tank may also be checked for damages and/or leaks by a professional. This is especially important if there is an underground oil tank present since remediation of oil contamination/spills can be very costly.
- If any issues arise, they will be addressed with the listing agent at this time. During renewed negotiations the seller may agree to repair, replace, remediate, reduce the purchase price, or perhaps give you a credit at the closing.
- Your agent may recommend to involve your real estate attorney to discuss your options to resolve severe and/or legal issues that came up during the negotiations. Please keep in mind that your agent is not allowed by law to dispense legal advise and will always refer you to your attorney for such.
- Please note that there is nothing binding you to the purchase of this property at this time and you can walk away from it if you feel the seller is unreasonable or there are to many problems. By the same token, the seller can continue to show the house and entertain any other offers.
- The contract of sale will be prepared by the seller's attorney and sent to your attorney for review and your signature. The signed contract is then returned to the seller's attorney, together with your check for the down-payment, which will be held in escrow until closing.
- Once the seller has signed the contract, your attorney will receive two copies of the fully executed contract, one of which you will need to submit with your mortgage application. Your attorney will discuss with you all aspects of the contract part of the transaction in further detail.
- Your agent can recommend attorneys, if you need one.
Appraisal & Loan Commitment
- Your lending institution will order an appraisal of the property, which is necessary to ensure the purchase price is within the acceptable range of the home's value. Sometimes, if the property does not appraise, a second appraisal may be done. If the property still does not appraise, some renegotiating may occur.
- Once you have a mortgage commitment, the closing date is set. All parties that need to be present at the closing will coordinate a time and place for the closing to occur.
The Final Walk-Through
- A walk-through is typically done at the same day of and just before the closing.
- This your chance to make sure that everything has been cleaned out, looks to be in order, and that anything else, such as repairs, etc., that were the responsibility of the seller were taken care of.
- You and your agent will take note of everything that is not functioning and/or properly completed as previously agreed upon and bring it up to your attorney so it can be addressed and corrected at the closing table.
- You should contact and confirm your movers. Call the utility companies to transfer all appliacble service accounts at the date of closing. Confirm with your insurance agent that your home owner's insurance is in effect. Make sure any funds needed for the closing are in place and fully available.
- Your attorney's office will advise you ahead of time regarding any certified or bank checks that you will need to bring with you.
- You will also need to bring a supply of personal checks to cover the various fees and two forms of identification, one of which must be a photo I.D.
- The parties who will be usually at the closing are the sellers, the sellers attorney, the buyers, the buyers attorney, the lender's attorney, the title company's representative, and the real estate agents involved in both sides of the transaction.
- The closing itself can take a few hours and amongst other things you will be asked to sign a significant collection of documents under the guidance of your attorney.
- In the end the seller will hand over the keys to your new home and your new life will begin.
Not Getting Pre-Approved & Not Protecting Your Credit Score
- What you think you can afford and what the bank is willing to lend you may not match up, especially if you had some credit issues or unstable income in the past, so make sure to get pre-approved for a loan before you even start shopping for homes. If you don't know what you can afford you will be wasting your and your agent's time looking at homes out of your price range which will only cause you hardache and disappointment.
- A seller will almost always expect your pre-approval with any offer you may place. It shows the sellers that you are a serious and viable buyer. Offers without a pre-approval letter (if you plan to finance all or part of the purchase price with a loan/mortgage) or proof of funds letter (in case of an all cash offer) will not be taken seriously especially if there are other offers on the table.
- Having your pre-approval in your pocket avoids any delays in making your offer once you find a home that you really want. Being prepared helps in many ways!
- Please be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like buying and financing a car and/or any other major financed purchase for that matter. If the deal falls apart because of something you caused, you may have to forfeit any deposit you put up when you entered into contract.
Failing To Consider Additional Expenses
- Property insurance, taxes, homeowners association dues, common charges, maintenance, higher heating, cooling, gas, electric and water bills are some of the costs that first-time home buyers tend to overlook or minimize when shopping for a place. Be realistic about such add-on costs and factor them in to make sure you are not making yourself house-poor.
Being To Picky
- Yes, just go ahead and put anything and everything you can think of on your new home wish list, but don't become inflexible and end up continuing to rent for significantly longer than you really want to. Keep in mind no house is ever perfect and has all of the bells and whistles you are looking for, and you'll even outgrow the ones you built yourself.
- As a first-time homebuyer you will often have to compromise on something because your funds may be limited or that dream home just does not exist. You may have to live on a busy street, accept outdated décor, make some repairs and updates to the home, forgo that attached double car garage or extra bedroom and bathroom.
- Please keep in mind, there is no such thing as the perfect home. Even brand new ones are not perfect. But there are many homes that are close to perfect, meaning they do address the major requirements you have and they may even offer opportunities to address the minor ones. Don't pass up on a house that comes close to what you are looking for just because you may think the next one is going to be it. You'll end up waiting forever!
- Even if you can't afford right now to replace the hideous wallpaper and cracked floor tile in the bathroom, it might be well worth it to live with the ugliness for a while in exchange for getting into a house you can afford and has many of the features you need and want. If the home otherwise meets your needs in terms of the big things that are actually difficult to change, such as location and size, don't let physical imperfections turn you away. Ugly or worn paint and wallpaper can be changed or removed in no time.
- Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done some of the work for you. In addition, you get to do it the way you like it done and the value of the home will go up as you continue to improve it.
Being Swept Away
- Minor upgrades and cosmetic fixes are inexpensive tricks that are a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay a couple of thousand for minimal upgrades or pay several thousand dollars on staging. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always seek a house they can add value to, as this ensures a bump in equity to help you up the property ladder.
Compromising On The Important Things
- Don't get a two-bedroom home when you know you're planning to have kids and will need three bedrooms. By the same token, don't buy a condo just because it's cheaper than a house... if one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain on you.
Neglegting To Inspect & To Attend Inspection
- It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast... before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.
- Make sure to attend the home inpspection, follow the inspector around, ask him to explain right then and there what he is looking for and what his findings are. He or she will tell you what are minor and/or major issues and why. Of course, you will also receive a written report from your inspector but these reports tend to be very technical and filled with verbiage protecting the home inspector from liabilty and can make even minor issues with the home sound very dramatic.
Not Hiring A Buyers Agent & Using The Sellers Agent
- Once you're seriously shopping for a home you should secure the help of a buyers agent. It does not cost you anything, belive it or not. Buyer's agents get reimbursed by the seller's broker for bringing a viable buyer to the table but always only act in the buyers best interest. And please, when walking into an open house without your agent always tell the seller's agent that you are already working with a buyers agent. It simply prevents pitfalls and misunderstandings.
- All agents are held to the ethical rule that they must treat both the seller and the buyer parties' fairly, but you can see how that might not work in your best interest if you start dealing with the seller's agent directly and/or before getting yourself a buyers agent.
- A buyers agent always and only has your best interest at heart and by law his/her fiduciary responsibility is to you only, the buyer. Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently represent and fight for your interests and rights. When shopping for a home make sure to find yourself a good buyers agent!
- In real estate, buyers are faced with a series of big decisions involving at times unknown territory like mortgages, downpayments, negotiations, real estate law, inspections, contracts, and also life choices. Fear of making “The Wrong Decision” regarding any one or all of these issues is a common reaction. Buyers agents work very hard to navigate these issues with their buyers and minimize or eliminate regrets and fears... if buyers allow their real estate agent to help.
Not Thinking About The Future
- Nobody has a magic crystal ball that can perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road. Please keep also in mind that while you can improve a home itself you will be selling it down the road with all of it's positives and negatives if it comes to location and some other unchangeable attributes. Some questions you should ask about your prospective property include:
- Are there development plans in the works for your neighborhood in the future?
- Is your street likely to become a major street or a popular rush-hour shortcut?
- What are the zoning laws in your area?
- If there is a lot of undeveloped land? What is likely to get built there?
- Have home values in the neighborhood been declining or rising?
While we have explained the home buying process and highlighted the most glaring home buyers mistakes commonly made in the paragraphs to the left we like to offer you an additional resource. Please click on the image below for more home buying questions and answers.
Homeownership brings with it a whole slew of questions. Click on image below to open our library of answers to the most important questions about homeownership.