First-Time Buyers

Meet with the bank to get a “pre-qualified” or “pre-approval” letter indicating the mortgage amount you have been approved for. Be sure to discuss with a mortgage professional closing costs, tax escrow and any other important big ticket items you should be aware of as you figure out finances. Once you know how much cash you will be able to putdown (20% is a common benchmark in order to avoid PMI), be sure to take any necessary steps to free up that cash in anticipation of finding a house you love and wish to move quickly on. Generally your deposit (a portion of your cash down payment if not all of it) is handed over at contract signing and held by the seller’s attorney in an escrow account until the closing. You don’t have to put the full down payment into escrow but you will definitely need funds available and in a competitive market, the stronger the offer the better. So if stocks need to be sold or 401Ks will be accessed, it’s time to get that started so you are ready.

Find a qualified real estate agent who knows the areas you are interested in and is responsive to your requests for showings and follows up on any questions. Buyers do not pay commissions to agents—a sales commission is paid by the seller and shared by the listing and selling agent. Working with a buyer’s agent is a no-brainer: it costs you nothing. Buyer’s agents are there to make the process easier; they negotiate on your behalf, help facilitate the transaction(and the many milestones that need to be met in a timely fashion), and keep all parties in communication as the deal moves towards closing.

Make a list of wants and needs, starting with most important to less important. Include # of bedrooms, # of bathrooms, style of home, distance from public transportation, amount of land, garage, swimming pool, renovated kitchen, etc. All of this info should be discussed with your agent, every bit of info helps inform the search.

Define your desired locations - Croton, Peekskill, Garrison, Cold Spring, Putnam Valley, Beacon, Poughkeepsie, etc. - and how close you want to be to stores, trains, restaurants. If commuting is part of the equation, a train ride to test the commute is an absolute must. Allow yourself to spend time in any potential towns you are considering. Housing stock is only one part of a greater equation. Hang out in the local coffee shop, stop by the library, go out for dinner, take a walk. Better yet, spend a weekend at an Air BnB. Can you see yourself calling this place home?

Your real estate agent will prepare an Offer Sheet with all of the details of the offer: financing, desired closing date, contingencies, inclusions, etc. You must review and sign before offer can be submitted. Along with the offer, a pre-approval or proof of funds (if applicable) must be submitted.

Once you sign the offer document, it is sent by your agent to the listing agent for the property and he/she will present the offer to the seller. Within a day or so, a response will be sent and could be any of the following: 1.) accepted as presented 2.) a counter offer 3.) a rejection of the offer. Your offer is not binding and you can decide to withdraw your offer at any point up until you sign the contract. Also, your offer is not binding and seller can decide to accept another better offer at any point until contracts are signed.

The accepted offer is the most desirable first response but does not happen often! The counter offer will allow you to revisit what you are willing to pay and possibly present a counter offer in return. And the rejection could mean that your offer was too low or they have already accepted someone else’s offer. If you really want the property, it is good to keep the negotiations alive until you achieve an accepted offer.

It is important to remember that offers can be made by other parties on properties all the way through to the closing date, by law, but the deal usually becomes binding when both parties have signed the contract and the buyer has put down a deposit. A listing agent is required to present all offers so working quickly on due diligence is of utmost importance once you have an accepted offer but aren’t yet in contract.

The first thing the buyer does after getting an accepted offer is hire a home inspector to thoroughly inspect the home (inside and out), to uncover any issues, any appliances that are not working, any heating system problems, etc. A satisfactory home inspection is always a contingency and before any contracts are drawn up, the buyer will decide whether or not to move forward based on the findings of the inspection. It is best to get the inspection done within the first week of receiving an accepted offer. The seller will still be showing the home for back-up offers and if you wait too long you run the risk of someone “besting” your offer, an accepted offer is not binding.

When the details of the offer have been worked out and accepted by both the buyer and the seller, a Memorandum of Agreement is written up by the listing agent with everyone’s contact information and it is sent to the lawyers for both parties. Ideally you should work with a lawyer familiar to the area you are buying, can’t stress this enough, but if you have someone you trust to handle your real estate transaction, that is fine, too.

If the buyer decides to proceed with the purchase, the seller’s lawyer will send a draft of the contract to the buyer’s lawyer and discussions will occur back and forth between you and your lawyer, between the seller and their lawyer and between the two lawyers. Once all the details have been worked out and agreed to, you will sign the contract. It will be forwarded to the seller for signature. The contract is now fully executed, all parties have signed

While the contract is being worked on, you should contact the bank (if there is a mortgage) and provide them with the details of the purchase. Once they receive the signed contract, they can begin the process which includes having an appraiser come to the property.

The seller’s attorney will set a closing date once all of the paperwork has been completed, the title search is done and the mortgage has been approved.

Once there is a date set, call the utility companies and set up transfer of accounts as of the closing date. If there is fuel oil, it will be measured and paid for at closing. Moving forward it is the choice of the buyer to hire whatever fuel company they would like, call around for pricing.

The day of the closing, the buyers will meet their agent at the property and do a “walk through” to make sure that everything is in order and no damage has occurred since you last saw the property.

Your lawyer will take you through the paperwork, checks required, documents to bring with you, etc. a couple of days before the closing so you will have everything you need to close.

The keys will be given to you and after lots of handshakes and congratulations, you will be the new homeowner!