Letterio & Haug's
Home Buyers Guide
a step-by-step guide to the buying process
1. Purchase Offer
The real estate agents will negotiate the terms of the transaction, such as the purchase price, Downpayment on Contract, mortgage amount, and what the Contract is contingent upon (example- contingent on Selling your current home, contingent on negative Radon test etc.), if anything. Once the Seller/Listing Agent accept your offer, your realtor will forward your Purchase Offer along with your pre-approval to us so that we can open a file. The Listing Agent will send their version to the Seller’s attorney so they can prepare Contracts to be sent to our office.
2. Contract Review
The Seller’s Attorney drafts the Contract of Sale to be sent to our office. Once we receive the Contract we will contact you to schedule an appointment to review with our attorney; phone or in person appointments are available. After your review, our attorney will construct a rider making any necessary changes. This document is then submitted to Seller’s attorney for approval. Upon approval, we will then digitally send the Contracts to you to sign and ask you to forward the agreed upon Downpayment. This can be done via wire to our escrow account or via check (FedEx or drop off at our office). We then forward Contracts and Downpayment to Seller’s attorney for Seller’s countersignature. Note, Seller will not sign Contracts until they are in possession of both Purchaser signed Contracts and Downpayment. Once the Seller has signed and their attorney has returned Contracts to our office you are under Contract and bound to one another. We will forward fully executed Contracts to your lender so they can continue the mortgage process.
3. Title Insurance & Municipal Report
The Purchaser’s attorney will order a title search from a title insurance company to insure the Seller has clear title. Issues that may arise are unpaid mortgages, open liens against the property such as unpaid taxes or judgements against the Seller, or other issues that must be resolved prior to the closing. The title report also includes a search of governmental departments for violations against the property. This is ordered by the title company directly from the municipality. This report, issued by the municipality often take multiple weeks due to limited staff and budget. Unfortunately, there is no way to expedite and the reports will be issued on the municipality’s timeline. Common examples of municipal violations include improvements without the benefit of a building permit (additions, finished basements, adding central air, pools & sheds) Should the municipality note a violation the Seller will be obligated to remediate this issue prior to Closing. Please note, this process can take time and the Seller will be under no obligation to compensate you for any necessary rate lock extensions.
A survey is a map of the property that will show you where your boundaries are, where all improvements on the property such as buildings, fences, sheds, driveways, walkways, swimming pools, and/or other improvements are located, and whether the deed description describes the property accurately. Without a survey performed by a licensed land surveyor, you may not know whether the property has neighboring improvements that encroach onto your property, or whether the buildings and improvements on your property encroach and/or are located on other properties. Should you elect to close without a survey, you will not be insured for these or other possible issues a survey may reveal. As such, although most lenders will permit you to close without a survey, the Firm is obligated to recommend that you obtain a new survey of the property you are purchasing. Should you choose not to obtain a survey, you will be purchasing the Property subject to possible boundary issues.
5. Lending Process
Often the loan process begins by obtaining a pre-approval. This document will inform you, your real estate agent and any potential Seller if you are well qualified to purchase in a particular price range. Once your offer has been accepted you will work directly with your lender to submit various personal financials and other necessary documents to obtain a mortgage commitment. Our office will coordinate with your lender regarding providing the fully executed Contract and title/municipal reports as they become available. The lender will also order an appraisal to verify the property’s value matches the Purchase Price.
Once the appraisal, title report, municipal report & all personal items are submitted, the bank will submit the loan for final review. Upon a positive final review, a “clear to close” will be issued and the scheduling process can begin.
6. Preparing for Closing
NOTE: There will also be an on or about closing date in the Contract itself. This is NOT a formal closing date and will float based on the factors above. A closing cannot be scheduled before a clear to close is issued. Be cautioned to not book movers, set a closing date for your sale or otherwise put yourself in a position to give up possession of your current property until a closing is formally scheduled.
Once the above conditions are met, we will schedule a closing at a time convenient for all parties involved.
The following individuals must coordinate a closing date/time:
- the Buyer,
- the Seller,
- the Buyer’s attorney,
- the Seller’s attorney,
- the Buyer’s Bank’s attorney,
- the Seller’s Bank’s attorney (in Coop transactions only),
- the Title Closer (in non Coop transactions only),
- the real estate brokers and
- the Managing Agent (in Coop transactions only).
Please note in many circumstances our firm can also act as the Bank’s Attorney which eliminates the need to schedule with an additional office. Many national/regional lenders have bank attorneys that are located in NYC/Long Island and may be difficult to schedule with. Using a local lender has proven to expedite the entire process. Upon request our office can provide a list of lenders we routinely work with and see excellent results from. The Closing customarily takes place either at the Seller’s attorney’s office or at the Buyer’s Bank’s Attorney’s office. In Coop transactions, the Closing takes place at the office of the Managing Agent.
New York is unique in how closing are scheduled and conducted. Many national/regional lenders attempt to provide what they believe to be final numbers to Purchasers once the file is cleared to close. Your final numbers ie the amount you will need to bring to Closing and how will ONLY be provided by your attorney. This will likely not occur until the day before Closing.
7. Closing Day!
It is vital the Purchaser coordinate a walkthrough with their real estate agent, to take place prior to Closing. During this meeting, the Purchaser and their agent will “walk through”
the property to determine the property is in the same condition it was when the property was first inspected. This is the final opportunity for the Purchaser to raise any issues. Anything discovered after the Closing the Purchaser has assumed as the now owner of the property.
At the Closing, the Purchaser will execute loan documents including the note & mortgage as well as documents that will transfer property ownership from Seller to Purchaser. Keys to the property are available to Purchaser once the Seller’s attorney confirms receipt of funds, this may occur in person at the closing table, by wire, or by overnight check. If by the latter, you may not have possession of the property until the following day (or days if closing on a Friday).
You will leave the Closing with a copy of the deed (title) to the property and all bank documents you executed at the closing table. You will receive the original deed to the property directly from the County Clerk once they record and process the transaction. The title company will then issue a final owner’s policy and provide it to our office. Once we receive this, we will provide you with a digital copy. It is very important to keep the original title policy for when you sell the property.
Congratulations on the purchase of your new home!
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