Deciding to buy a home or simply starting the process is a very exciting time. It usually is prompted by landmark moments in your life – relocation, family growth, downsizing or simply a change of location and neighborhood. Emotions are high and its easy to get overwhelmed by what appears to be a simple process. Having worked with homeowners of all types, I can assure you, these mixed emotions of excitement and high anxiety are common place. Below I break down the basic steps to home ownership in New York City.
1 . FIND AN AGENT – A Trusted Specialist
A licensed real estate agent is of no cost to you as a buyer but they are an invaluable resource! Capitalize on their market and area knowledge, among other expertise.
2 . GET PRE – QUALIFIED – Know Before You Go
Unless you are paying all cash – Your first step is to get pre-approved for a mortgage loan. Your income and credit history will determine the loan amount and rate you qualify for. Your Caliber sales specialist will help connect you with a great lender.
3. HIT THE STREETS – Learn by seeing
Take the time to walk the streets with your agent. Attend open houses, schedule private showings. Understand what your needs and wants are – size, location, quality and budget.
4. NEGOTIATE – Team Work
Submitting an offer on a property is exciting and nerve racking all at the same time. Work with your Caliber sales specialist to help argue the offer you wish to submit. Solid facts help convince a seller to accept a lower offer. The offer is a non-binding agreement to pay an agreed upon price on a property. The seller can accept, counter or reject your offer.
5. CONTRACTS – A Great Attorney For The Win
In NYC you will need a great real estate attorney. Your Caliber sales specialist will help connect you with a reliable option. They will analyze the contract of sale, review a buildings financials, and minutes. Ensure proper title and more. Their work is vital in protecting your legal interests!
6. SIGNED DEPOSIT – Enough Talk – Time for Action
Time to sign and put a deposit down – Binding you and the seller!
7 . LOAN APPLICATION – Don’t Delay
The loan application can take between 4-8 weeks to approve. Organize an appraiser and/or home inspector as needed with your bank. Your Caliber sales specialist will help keep everyone moving.
8. PREPARE YOUR BOARD PACKAGE – If purchasing A Co-Op
Co-Ops have a board of directors who will review your purchase application and will have final say over the execution of the sale. Every Co-Op has their own expected qualifications. Your Caliber sales specialist will help navigate this process. Expect to disclose significant information regarding your financials and personal life. A board interview will be required as well.
9. APPROVED – Finish Line is in Sight
Take a breath you passed the board!
10. MORTGAGE APPROVED – The Money is Ready
The lender sent out the approval!
11. SCHEDULE A CLOSING – Plan Ahead
Getting multiple people in one room to sign in person can be difficult to schedule. Plan ahead and have a power-of-attorney ready just in case.
12. FINAL WALK – THROUGH – One Last Chance
With your Caliber Sales agent, take one full walk through.
13. CLOSING – You Made It!
Nothing is final until every party signs!
Some Common Terms To Know:
Appraisal – Assessment of the property’s market value. Typically done for the purpose of obtaining a mortgage.
Contract Deposit – A percentage of the agreed-upon purchase price paid by the buyer at the time of signing the contract.
Debt-To-Income Ratio – A percentage of your monthly gross income relative to the amount of debt you owe.
Post-Closing – The amount of cash the buyer must have on hand after deducting the down-payment and closing costs.
Flip Tax – AKA A transfer fee – A “tax” levied by a co-op and paid by the seller or buyer upon closing. Designed to generate funds for the co-ops cash reserve.
Tax Abatement – A reduction in taxes on specific unit for a specific amount of time; issued by the government.
Escrow Deposit –Deposit of funds to be transferred upon completion of the deal
Sponsor – The entity responsible for developing a new building or converting an existing rental building to a co-op
REBNY Financial – A standard financial form requested by a seller of the buyer – used to qualify a potential buyer.
Needless to say there are additional nuances and tips along the way that will come up but this is a great start! With careful planning, research and a determined mindset we can help make your dream of home ownership a reality.
Give us a call and lets get you on the best path for success.