Making an Offer
In real estate, the preliminary process is oftentimes the hardest. Finding a property that you’re truly interested in isn’t always easy, and even after finding the home of your dreams, the offer you make must then be accepted. All binding agreements must be made in writing, after a non-binding agreement is proffered and then accepted by the buyer and the seller, respectively.
Of course, when it comes time to progress past verbal offers, consulting with a real estate attorney is greatly advised.
Finding a Real Estate Lawyer
Standard practice dictates that your next step be finding an attorney. Frankly, there is paperwork and other legal formalities that must be handled by an attorney-at-law. Both the buyer and the seller are expected to be represented by real estate lawyers.
Trained professionals of this sort can help guide all parties through the process, ensuring a smooth and problem free transaction.
Getting a Home Inspection
In attempt to avoid costly repairs, a seller may not disclose certain defects in a property. If a property is listed “as is,” then you, the buyer, will be responsible for all such repairs after a deal is complete. This means that if a transaction proceeds through closing and the building in question has faulty wiring, a weak or rotted infrastructure, or other undiscovered defects, the seller will have no obligation to remedy any damages. This places the onus of home inspection on the buyer, who can and should schedule a home inspection to ensure the home they are about to buy is defect-free.
A licensed inspector is often well worth their fee. They can search the premises for termites, bed bugs or other flaws that may not be readily visible to a prospective buyer. Defects in a building have a strong correlative effect on the value of a property. If an inspector does find defects, a buyer can ask that a seller fix the problems before the transaction closes or use the information to drive down the asking price.
Finalizing the Contract
Finalizing the contract of sale involves thoroughly reviewing and then signing it. This generally occurs in the presence of your (the buyer’s) attorney after the contract is drafted by the seller’s attorney. You will be asked to sign four copies of the contract of sale. The fourfold contract is then sent out by your attorney.
This enables the contract to be executed, after which you’ll be able to continue to your mortgage application process.
Making the Down Payment
The down payment check, in most cases, is also filled out in the presence of an attorney.
The down payment is a variable fee, and can range anywhere from 2 – 20% of the purchasing price.
In some cases, lenders are willing to underwrite lower down payment amounts for buyers unable to make large lump sum payments. However, paying more than the quoted down payment amount may be a useful or even necessary tactic for those with past credit problems.
Of course, an attorney can help you decide what your best course of action is when it comes to making the initial down payment on your property.
Submitting a Mortgage Application or Board Package
For first time buyers, the deadline-oriented world of real estate is sometimes the greatest difficulty they’ll face. Acquiring and filing all necessary paperwork in a timely manner can be a trying process, one that law professionals can greatly simplify. A mortgage application is one such time-dependent document, as it must be filed after a down payment is executed but before a transaction can close.
Co-ops and condominiums often require the additional step of filling out and submitting an application, which goes under board review.
The closing is a meeting involving: (1) the buyer (2) the seller (3) all attorneys (4) the title closer (5) all brokers and in the case of co-op transactions, also (6) the managing agent. [Heretofore referred to as “all parties” or “all involved parties.”] This meeting often occurs in the seller’s attorney’s office or the buyer’s bank’s attorney’s office. For co-op transactions, the closing will take place in the managing agent’s office.
After the preliminary legwork has been completed, the title has been deemed clear, and the lender has declared a property “free to close,” (or the co-op / condominium board has reviewed and approved the buyer’s application) a closing must be scheduled. When all parties are free to meet, a closing will be held wherein all involved parties will meet and conduct one final walkthrough of the premises. If all are satisfied that the establishment hasn’t undergone any changes since the signing of the contract, the deed, or stock certificate, along with all pertinent official documents, will change hands.
After the closing the buyer will officially become the owner of the property.
Remember, consultations are a free and easy way to receive clarification on all of these topics, and many more as well. At Kaplan, Kaplan & DiTrapani, LLP, we place supreme importance on keeping our clients informed. We’d love to sit down and discuss your options, and help get you into the perfect new home.