It is time to figure out how much house you can afford and your monthly budget. It is time to contact a lender. A lender will ask you for the following:
- 30 - 60 days of bank statements with all pages included (inclusive of blank and non-informative pages)
- Tax Returns, typically two years
- 4 to 8 weeks of pay stubs for proof of income
- Statements showing assets such as stock portfolio, retirement investments (401k plan, IRA)
These documents, along with your credit score, down payment, and income, will help a bank determine how much house you can truly afford.
Public house hunting websites' information is not 100% accurate. REALTORS get up to date listings from the MLS databases for a more accurate availability of houses.
Once you have found your REALTOR, you will also be required to sign the New York State Disclosure Agreement. This document is NOT A CONTRACT. It is a state-required document that identifies the party that your REALTOR is working for; buyers' agent, sellers' agent, or dual disclosed agent.
So now, you're pre-approved, you have picked out your REALTOR, and you're off to the races!
Important Tip: always see a property in person to get a sense of the property and potential remodel capabilities.
Your REALTOR will submit a document called A BINDER. This document means that you accept the offer and a meeting of the minds between both parties. This document will have your name(s), address where you currently live, contact number & email, as well as the offer price, total down payment monies, estimated closing date, and terms of the purchase. You will sign it as well as your REALTOR. It will then get scanned and emailed along with your PRE-APPROVAL, NYS Disclosure Statement, Proof of Funds (POF...This is a must).
This is an essential part of the process. A Licensed Inspector or Engineer needs to test appliances & utility systems. An Inspector needs to examine electrical receptacles, electrical panels, light switches, light fixtures to ensure that they're all in working order. An Inspector needs to inspect the pool, read the siding or roof, and review the land's grade surrounding the property. An Inspector may even be required to check for Lead Paint, Asbestos, Mold, or Foundation Issues.
They come to your purchase property, take photos, take notes, test the functionality of things and compile a report for you, your agent, and the attorney to review. This report is forwarded to the other side for review. If repairs or alterations are needed, this is the time for the buying party to speak up. Assuming that everything can be agreed upon, this leads us to the next step.
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Once the inspection outcome is settled, you will be called into your attorney's office to sign a contract. You will hand over a down payment check (earnest money/good faith deposit), which will go into an escrow account (most likely of the seller's attorney), which will be used towards the property's purchase price. These documents then get sent over to the selling side. The seller receives called into their attorney's office, they sign the contracts, and voila, officially under contract!
So you're under contract, fantastic! There are still tasks left to do. As a REALTOR, our job is to monitor the final steps in the transaction.
An appraisal is ordered by your lender, coordinated by your REALTOR & the seller's REALTOR. The appraiser reviews the property for size, space, location, and quality. They then compare properties to ensure that what you're spending is sensible.
Once your property APPRAISES, and all is well, your lender will issue a COMMITMENT lender committing to loaning your money.
The Title is essential as your attorney will coordinate a title search to ensure that the property you're buying has been transferred legally from party to party since the beginning of time.
Homeowners Insurance: Before closing, you must PAY for a full INSURANCE year. You will provide this receipt to your lender as evidence.
Once all of the above is complete, and both parties are ready to move forward and close, the attorneys will coordinate a closing date. Before the closing date (usually 24 hours before or the day of), you will visit the property to ensure that all appliances are still present, the house is not damaged, and that the sellers have begun packing their belongings.