- What do I want my home to be close to?
- How much space do I need and why?
- Which is more critical: location or size?
- Would I be interested in a fixer-upper?
- How important is home value appreciation?
- Is neighborhood stability a priority?
- Would I be interested in a co-op or condo?
- Would I be interested in new home construction?
- What features and amenities do I want? Which do I really need?
You may think that shopping for homes starts with jumping in the car and driving all over town. And, it’s true that getting in the car to go look at NY Houses is probably the most exciting part of the home-buying process. However, driving around is fun for only so long – if weeks go by without finding what you’re looking for, the fun can fade pretty fast. That’s why I believe that looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long terms.
I can help you prioritize your wants, and align them with your budget, as well as save you hours of time because I am familiar with the local New York home inventory.
Make an offer
Once you’ve found a house that you love make a fair offer in writing with your Real Estate Agent. The offer should include all terms, proof of financials and your pre-approval letter from the bank.
The most common mistake buyers make (especially in a buyer’s market) is thinking that they can take their time making an offer. Guess what – chances are if you thought the house was nice, and it was fairly priced, someone else probably did too. While you are thinking about it, someone else can come in and make an offer. Then you need to start the search process all-over again.
The second most common mistake buyer’s make is low-balling an offer. Think of it from the Seller’s perspective – they have probably owned that home for many years. Throughout the years they have lovingly maintained it, and built beautiful memories there. If someone gives a low-ball offer it is very insulting to the Seller. Many times, even if a buyer revises their offer to something more reasonable – the seller (who has been offended) won’t even entertain their offer, and would rather sell the house to someone else.
The ironic part of it is buyers that make low-ball offers are trying to save money, which is completely understandable – who doesn’t want to save money? However, 9 times out of 10 that same buyer usually winds up buying a more expensive house that has fewer features because they offended all the good deals in town.
Be very careful when making an offer. Keep emotion out of it, and use a Comparative Market Analysis (CMA) as your guide when determining offer price. I prepare CMA’s for all the buyers that I work with.
Get a home inspection
After your offer has been accepted hire a professional Inspector. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs. Make sure you ask the following questions from your inspector:
What does your inspection cover? The inspector should ensure that their inspection and inspection report will meet all applicable requirements in NY and will comply well-recognized standards of practice and code of ethics. You should be able to request and see a copy of these items ahead of time and ask any questions you may have. If there are any areas you want to make sure are inspected, be sure to identify them upfront.
How long have you been practicing in the home inspection profession and how many inspections have you completed? The inspector should be able to provide his or her history in the profession and perhaps even provide a few names as referrals.
Are you specifically experienced in residential inspection? Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection. If the inspection is for a commercial property, the same is true.
How long will the inspection take? The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection. Additional inspectors may be brought in for very large properties and buildings. Take note a small house or condo can take as little as 1 hour.
How much will it cost? Costs vary dramatically, depending on the area, size and age of the house, scope of inspection and other factors. A typical range might be $300-$500, but consider the value of the home inspection in terms of the investment being made.
What type of inspection report do you provide and how long will it take to receive the report? Ask to see samples and determine whether or not you can understand the inspector's reporting style and if the time parameters fulfill your needs. Most inspectors provide their full report within 24 hours of the inspection.
Will I be able to attend the inspection? This is a valuable educational opportunity, and an inspector's refusal to allow this should raise a red flag. Never pass up this opportunity to see your prospective home through the eyes of an expert.
Do you participate in continuing education programs to keep your expertise up to date? One can never know it all, and the inspector's commitment to continuing education is a good measure of his or her professionalism and service to the consumer. This is especially important in cases where the home is much older or includes unique elements requiring additional or updated training.
If there are any major issues found in the inspection your Realtor can negotiate reductions on the agreed upon price on your behalf. Take note, chipped paint, or out-of-style carpets do not constitute a price reduction, as these were things your untrained eye could see at the time of your initial offer. However, a faulty boiler, plumbing, or a leaking roof, for example can be negotiated. This is another area where an experienced Realtor will be extremely valuable to a buyer.
Go into Contract
After all negotiations are complete, and the Seller has accepted your offer, the Seller’s attorney will prepare a contract to be sent to your Real Estate Attorney. Your attorney will review the contract, and if all is satisfactory will call you in to his/her office to review and sign the contract. At this time you will be required to put down 10% of the purchase price into an escrow account. (Sometimes less than 10% can be acceptable – you must speak to your Realtor about this prior to making an offer). The lawyer will then send the contract via Fedex, or Courier to the Seller’s attorney. Upon receipt, the Seller’s attorney will call the seller in to his/her office to sign. The attorney will then execute the contract, and you will be “In Contract.”
Important Note: In New York, up until the time the contract is fully-executed the seller can change their mind, and offer the home to someone else with better terms, etc. This is why time is of the essence – taking too long to sign the contract after receipt can kill a deal.
Shop for a loan
Once you are In Contract Shop for a Mortgage. Remember - save money by doing your homework! Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. You should start interviewing lenders while your Realtor is negotiating your Offer Price, or even sooner.
Shop for homeowners insurance
All lenders will require that you have homeowners insurance in place prior to closing. Shopping around in advance of your purchase will ensure you get the best rate.
Loan Commitment
Once your mortgage has been approved, and a Commitment Letter has been received the Attorneys can schedule your Closing Date.
Final Walk-through
The day before, or day of your closing you will go take one last look at the property with your Realtor to make sure that the home is in the same condition as it was at the time of contract. Basically, you are making sure that a tree hasn’t fallen on the house, and that the basement hasn’t flooded.
Your Realtor will have you sign-off that all was well at your Final Walk-through.
Closing
You're finally ready to go to "closing." This will be an exciting day. Be prepared to sign your name over and over again, under the advisement of your real estate attorney.
If you have any questions about the home buying process, please don't hesitate to call (917-921-5397), or e-mail me at ccallegari@kw.com.
