I have received numerous calls lately from individuals and couples, who have never owned a home before and have lived in rental apartments while they were growing up.
They needed some guidance as to how to proceed and I provided them some tips, which I will note.
First, once you have found the home you want to buy you must begin making a bona fide offer with a pre-approval letter or if a cash transaction, proof of funds bank statement, showing the money is accounted for.
Lately, many offers are cash, so to compete, you need to place a very strong offer, sometimes within 5 percent of asking or at asking. I have experienced buyer’s remorse when the offers being placed are 10 percent or more off the asking price and were not strong enough to get the deal completed and the buyers would have come up, but didn’t fast enough to make it happen.
Yes, there will always be some properties that are priced outside of the realm of “market value.”
I would ask your agent for comparable sales in the area, so you will have a good feel as to market value (as I mentioned last week, don’t go by online sites like Zillow, Trulia and Redfin, which will most of the time not be accurate).
The Multiple Listing Service will have the most accurate and current figures that you can go by.
So, I always advise my people, if you really want this home, put your best foot forward and lately, you may have to battle for it, so best offers, sometimes, can finish the deal faster, if there are no other offers on the table.
Remember, today, there are a greater number of real purchasers compared with the available inventory, so competition is extremely fierce!
Once you have an agreed and accepted, you want to order a home inspection ASAP from a certified inspector or engineer, before signing the contract. They will provide you a price on the phone.
Then you should meet the person at the home (not needed for a coop or condo, since everything within the walls to the outside is the responsibility of the coop, and for the most part it is also true of condo or HOA-home owner Association, but check their offering plans to know for sure, what their and your obligations will be).
Let the inspector do their job and ask questions as you go along, as long as the inspector works that way.
Sometimes they like to complete the inspection first and then answer all your questions afterwards.
They will check the roof, brickwork and outside structures, then inside, the plumbing, electrical and heating, which are generally the most costly items to repair or replace, but it all depends on their condition.
Also be aware that you are not purchasing a new car (which depreciates as soon as you take it out of the showroom) but the home will hopefully be an appreciable commodity over the long run as it has been in the past.
However, certain things most assuredly will have to be replaced over the years.
You want to make sure that everything is functioning that you do not get stuck with a “money pit”, unless you are going for a fixer-upper, then just be aware of the cost of the repairs and replacements.
Once you are satisfied with your inspection, then usually your attorney would receive the contract by email (or snail mail) and review it and then you would go in to sign it and bring with you a down payment of generally 10 percent at contract and 10 percent at closing with an 80 percent mortgage. (I have seen some areas and deals that can require as little as 3 percent down, but that is not the norm up on the north shore and its surrounding areas).
It generally will be subject to a written mortgage commitment (unless non-contingent on a mortgage or because it is a cash transaction and no mortgage).
Also, your attorneys review and will have a closing date of on or about or in some cases on or before (beware of that closing date, so get advice from your attorney).
Your attorney will mail back your contract with the down payment check and then the seller will sign.
Once completed your attorney will get back an executed contract and you might want a copy for your records.
That executed contract immediately should be sent to your mortgage person so he or she can get the ball rolling and apply for your mortgage.
Philip A. Raices is the owner of Turn Key Real Estate in Great Neck.
He can be reached by email: Phil@TurnKeyRealEstate.Com or by Cell, (516) 647-4289 to answer any of your questions. To search for property, see what your home is worth or homes that have sold in your area, go to: WWW.Li-RealEstate.Com
