Buyers

The Buyer’s Guide – Finding Your Dream House

• Deciding where to move is difficult. It is often dictated by several factors including proximity to employment and transportation, school selection, neighborhood amenities and home values. Searching for a home can take anywhere from a week to years depending on an individual family’s needs.
• Viewing properties over a several month period is often very helpful in fully understanding the home values in a community and what amenities in a home are most important to you.
• It is very important to have the following items in place before seriously looking for a home:

1.  A pre-approval letter from your bank or mortgage broker (this should only take a couple of days). In order to obtain a pre-approval letter you will need W-2 forms and tax returns from the past two years, three recent pay stubs and financial asset statements.
2. A real estate lawyer who can advise and help you with the transaction.

Making an Offer
Once you have found your dream house and have your mortgage pre-approval and lawyer in place, you are ready to make an offer.

Key terms in a home purchase offer include:

1. Offer Price – The amount you plan to offer (which is supported by your pre-approval letter.)
2. Mortgage Contingency – Is the offer contingent on obtaining mortgage financing? It is important to discuss the implications of this contingency with your lawyer.
3. Engineering Contingency – This contingency gives you the right to perform due diligence on the property, including a home inspection, radon test, termites, oil tank due diligence,
4. Closing Timeframe- How long will it take you to get financing and close on the property? Generally, 60 days is a reasonable closing timeframe.
5. Clarification that you have nothing to sell – Do you need to sell another property before you are able to purchase this next one?
6. Clarification of inclusions and exclusions – Are all light fixtures, air conditioners, etc. included in the price of the sale, or are certain items excluded because the seller plans to take them when they move?

After submitting an offer you will wait to see if your offer is accepted, or more likely countered by the seller. Hopefully, you will be able to come to mutually agreeable terms or an “accepted offer.”
Once you receive an accepted offer, you will want to move quickly to contract because nothing is binding until contracts are signed.

The Deal
Within 24-72 hours of an accepted offer, an engineering inspection should be completed (should you elect to do such an inspection). Expect to spend $500-$1,000 for the inspection, depending on the size of the property. It is a good idea for you to attend the inspection with your real estate agent. Property inspections take approximately 2 to 3 hours.

• The contract is prepared by the seller’s attorney and sent to your attorney. Contracts in New York State are standard, so preparing the contract should not take long.
• You will need to be in close contact with your real estate lawyer to go over the specific details of the engineering inspection, results of the various tests, inclusions and exclusions list and other issues in the contract.
• Once you and your lawyer have reviewed the contract, it can be signed and returned to the seller’s attorney with a check for 10% of the purchase amount (the “escrow check”).
• The signed contract becomes valid only when your escrow check has been cashed by the seller’s lawyer. This deposit will sit in an escrow account held by the seller’s lawyer until the time of closing. This escrow money will then be credited toward the full amount of the purchase price at the closing.
• Once contracts are signed, it usually takes 60 days to close on a property.

See Closing Timeline/Checklist for Buyers for necessary steps to close.