The Buyer’s resource manual
Inside this booklet you will find explanations, resources and strategies
To help you with a successful purchase of your new home.
The Executive Group Realty has locations in:
NYC: 31 West 34th Street – Ronkonkoma: 260 Hawkins Ave
Index
- Do’s and Don’ts of buying a home.
- Buyer Brokerage
- Documentation
- Choosing a lender
- The buying process from beginning to end.
- Choosing an attorney
- Your Credit and your debts
- Vocabulary
- When are you ready to close?
- What to do at a walk through
- Utilities
Vocabulary/Real Estate Lingo
- FIRST ACCEPTED OFFER – An offer was made and accepted by the seller.
- TEMPORARILY OFF THE MARKET – The house was removed from the market pending contract.
- PENDING – In Contract
- POF – Proof of funds
- BINDER – Spells out the terms of the offer with terms and conditions that is made to the Seller
- OUT OF POSSESSION – A neighbor has encroached unto your property or vice versa.
- ENCROACHMENT – A neighbor violating their neighbor’s rights by building or extending some feature and crossing onto their neighbor’s property lines.
- CO – Certificate of Occupancy
- SURVEY– The document that details the measurements and layout of your lot.
- TITLE SEARCH – A title search is an examination of public records to determine and confirm a property’s legal ownership, and find out what claims or liens are on the property. A clean title is required for any real estate transaction to be completed.
- CLEAR TO CLOSE– When the Selling/Buyer attorney clears the file to close.
- TENANTS IN COMMON – An arrangement where two or more people can own the property.
- JOINT TENANTS – Take title simultaneously and one or more people can be a joint tenant. Upon the death of One of the owners the ownership transfers to the other owner automatically.
- OPEN VIOLATION – The local municipality has issued a fine for a building violation. This must be cleared in order to be able to close.
- CLOUD ON THE TITLE – When there is a violation, an open permit or any encumbrance that might invalidate The title to the house or property. UNRECORDED SATISFACTION – A satisfaction that was paid but never recorded in the County Clerks office. LIS PENDEN – A creditor (usually a bank) has placed a lien on the house.
- CLOSING COSTS – The costs to close your loan, it includes, your attorney fees, your title costs, Tax adjustments,Mortgage fees and fuel adjustments (fuel left in the tank).
The Ten Commandments of Buying A Home
Utilities
Many buyers, especially first time home buyers, may forget to change utilities to their names.
So, this is your friendly reminder that a couple of days before closing on your home you have some things that you need to do!
- Make sure that you have homeowner’s Insurance (see your EGR Agent)
- Make sure that you switch names with the Water Authority.
- Make sure that you switch your name with the electric and gas company
- Make sure that you switch your name with the sewer company
- Make sure you made arrangements with your movers (See your EGR Agent).
- Internet service.
Getting ready to buy a home
The home buying process has changed in various degrees over the years. But one thing that has remained constant, is the need to prepare ahead of one of the most important and most expensive purchases of your life.
Here at the Executive Group Realty (EGR), your agent has been specifically trained to guide you along the home buying process and make your purchase smooth and worry free.
Your first step should be to consult and engage your EGR agent and let them explain to you the road map to your new home.
Our agent will put you in touch with our “in house” professionals like Lenders, Attorneys, Home inspectors, Insurance services and Moving Services.
You should take heed and listen to your agent’s recommendations as they know the industry and we’ve assembled a team of professionals that are really, really good at what they do.
Our agents do not make any money from their recommendations.
Knowing your creditworthiness from the beginning is key.
Your Executive Group Realty agent will put you in touch with three Lenders and you will choose the one that you feel comfortable with.
Getting ready to buy a home How’s your credit?
Knowing your Creditworthiness from the beginning is key.
Your Executive Group Realty agent will put you in touch with three Lenders and you will choose the one that you feel comfortable with.
Credit:
Know your credit score, this is an important barometer of your financial health; naturally the highest the score, the better.
There are lenders out there that will assist you in repairing your credit if It needs to be improved.
Generally a good FICO credit score ranges from 700 and up. If your credit score is below that, don’t worry, there are programs that you can fit under which will allow you to become a homeowner.
Debt:
Lenders will also look at your liabilities… your debts. Knowing what your debt to income (DTI) is also important as you may owe too much money to pay your debt and might not fit into a preferred program. Not to worry, your lender can also assist you in navigating
Income:
Determining what your income is and what you will want to spend is also an important factor. How much you can afford and what you want to spend are 2 different things.
Keeping your monthly payments at around 36% and your debt at 36% will not choke you and make you house rich.
Starting the house hunt
House hunting can be a wonderful experience if your expectations are realistic and your budget is in line with the current market.
Many times home buyers have referred to the home buying process as a “roller coaster” with unexpected turns and twists at every corner.
In a seller’s market, inventory is scarce and depending on the price point, many buyers are making their offers over asking price in order to ensure a successful bid.
This is where your Executive Group Realty agent will become an invaluable resource.
To utilize your Executive Group Realty agent to their fullest capacity, you will Need to “engage” them by entering into a “Buyer Brokerage Agreement”
A Buyer Brokerage Agreement (BBA) will allow your agent to give you information about the house that a seller’s agent might not want to share with you.
It will also establish a “fiduciary duty” and the agent will become obligated to you and you to them. It will also establish a “fiduciary duty” and the agent will become obligated to you and you to them.
There usually isn’t an additional fee involved as the fees are usually covered in the offering price.
Read your BBA carefully because there are obligations on your part on whether you find your home by yourself or through your agent, the Brokerage fee will still be owed.
Having your own personal agent will open many doors for you and it will make it easier for you to gain access to homes that are on or off the market, including For Sale by Owner homes.
Hiring your agent
The Real Estate business model keeps evolving and changing, whereas buyers were seldom represented, now there are “buyer Brokers” that represent the interests of the buyers.
At the Executive Group Realty we take pride in having represented hundreds of buyers and having negotiated hundreds of thousands of dollars in savings for our clients.
Through a “Buyer Brokerage Agreement” you will hire one of our agents to represent your interests in the market. What does this mean?
It means that your agent will now work on your behalf, to find you the best deals, and to negotiate on your behalf to get you the house of your dreams with the terms that you want.
The commission is usually already built into the price of the house that you are purchasing.
Talk to your Executive Group Realty agent and make sure that you are on the same page. The Real Estate business model keeps evolving and changing, whereas buyers were seldom represented, now there are “buyer Brokers” that represent the interests of the buyers.
At Executive Group Realty we take pride in having represented hundreds of buyers and having negotiated hundreds of thousands of dollars in savings for our clients.
Through a “Buyer Brokerage Agreement” you will hire one of our agents to represent your interests in the market. What does this mean?
It means that your agent will now work on your behalf, to find you the best deals, and to negotiate on your behalf to get you the house of your dreams with the terms that you want.
The commission is usually already built into the price of the house that you are purchasing.
Talk to your Executive Group Realty agent and make sure that you are on the same page.
Getting ready to buy a home
Step 1: The Lender – Interview three Lenders.
Before engaging in house shopping and wasting unnecessary time, you should talk to a lender.
You should have the following documents ready before your first conversation takes place.
- 2 years of your latest tax returns
- The last 2 months worth of stubs
- A real schedule of all of your debts and obligations and any loan that you’ve co-signed.
- A list of any asset that you may have or any property that generates Income.
Lenders generally want to see that you are a good credit risk.
Your preferred lender will know what you will need…a pre approval letter to give to your Executive Group Realty Agent before starting your house hunt.
Step 2: Choosing a Lender
Choose a lender that is responsive, patient and knowledgeable.
Do not feel intimidated to ask pertinent questions like:
- How many points do you charge.
- Can a get an estimate of all fees up front.
- Can you explain the programs fully.
- What hours do you work and what is your accessibility for questions.
Lender reps are sales people too, they have gimmicks and programs designed to make you choose them.
Documents that you will need
There are documents that Agents in NY are required to have both buyers and sellers sign in order to be compliant with the Department of State Licensing division.
Your Executive Group Realty agent will explain each one in detail.
These documents are:
Finding the “right” house
As you shop and look at a number of homes, you will slowly begin to understand the market and it’s dynamics.
You will become an “expert”.
You should not lose sight of your goals, there are Needs and Wants that everyone looks for in their home.
A “NEED” is something that you must have…like if you have a large family with children you will “NEED” more than one bathroom to avoid drama.
Or if you are a car enthusiast, you will need at least a 1 car or a 2 car garage to work on your car.
A “WANT” is like an in ground swimming pool, Landscaped property or things that could or could not be part of every home you see.
In order for you to be able to compare homes, you should take detailed notes and attach a nickname to the houses that you see and like so that they will be easily remembered.
Ask your Executive Group Realty Agent to provide you with a copy of the listing so that you can make comments as you preview the house.
At the end of each showing, your agent and you will review the home that you just saw together and decide on whether or not this is “the house” for you.
If you determine that you found the house that you were looking for, take a short (very short in a seller’s market) time to make up your mind, and then discuss the offer with your Executive Group Realty Agent.
In order for you to make an educated decision, ask your agent to compile a Market Analysis to see where the house is positioned in the Market. Most of the time your Agent will be able to help you and answer questions that you may have about the neighborhood, the house and values…listen to your agent!
Making the offer
Together with your Executive Group Realty Agent, your offer will be assembled.
With the information and pre-approval provided by your lender, your agent will put together a Binder for you to sign.
A Binder is NOT a CONTRACT! A binder is more like a memorandum of understanding that spells out the terms of your offer. This Binder is what will be sent to the Seller’s agent so that the seller can make a decision on whether to choose your offer or choose someone else’s offer.
Be prepared to give a counter proposal or counter offer. Many times if there is a lot of competition with other buyers, you will be told to submit your “highest and best” or your “best and final”.
That will be your offer given to the seller.
The home inspection
If your offer is accepted by the seller, you will need to schedule your inspection immediately.
In a Seller’s market, you need to get the inspector there on the very next day.
That is because if you wait longer than 12 hours you will risk losing the house to a higher bid.
We have seen home buyers lose homes after the home inspection was completed because the purchaser waited too long to sign the contract, or because their attorney took to long to review the contract or was uncommunicative with the purchasers attorney.
During the course of a home inspection which you will need to be present, your inspector will go over the major and minor systems in the house.
The Electrical, Structural, HVAC systems are naturally the most important.
Your inspector will also check your outlet polarities, any potentially biological problem areas such as mold or mildew, the presence Of any wood boring insects (we live in NY where there is a natural existence of termites/carpenter ants).
Being present at your inspection will also give you the opportunity to have the inspector check on areas that you may have a Concern with.
Don’t be afraid to ask the inspector to check specific areas of concern, they will be more than happy to oblige you.
What happens timeline
A good deal for you, now is time for the rest of the team to get involved.
- Inspects the house 3 hrs
- Provides inspection report
- Reviews report with you
Your EGR Agent
- Renegotiates price
- Sends the deal sheet
- to seller’s attorney.
Your Attorney
- Receives Contract drafted by Seller’s Attorney
- Reviews contract and makes changes with seller’s attorney
- Reviews contract with you and you sign it
- Your attorney sends it to the Seller’s attorney with your down payment check.
Seller’s Attorney
- Receives contract from your attorney
- Reviews it with Seller
- Seller Signs Contract
- Fully Executed Contract goes back to your attorney.
- Lender receives a copy of your fully executed contract, completes application.
- File goes to Opener.
Your Attorney
- Orders Title & Survey
Lender
- Your Mortgage is being processed
- Appraisal ordered
Lender
- File is in underwriting
- Appraisal received & reviewed
- Rate is locked
- Closing Disclosure issued
Your Attorney
- Receives commitment
- Sends commitment to seller’s attorney
- Reviews title
- Survey read into title
- Sets the closing date
Your EGR Agent
- Sets up the Final Walk Through
Closing day!!!
Choosing the “right” attorney
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Having an attorney represent your interest in not only smart but very important.
What is more important however is that the attorney that is representing you be a Real Estate attorney… a real Real Estate attorney and not someone that does it once in a while.
Your attorney will advise you on the legality of the contract and will protect your interest with regards to what your exposure is within the contract.
When you are the purchaser of the house, your attorney will receive the contract to “mark up” in this process, the attorney will make annotations to the contract and negotiate those changes with the seller’s attorney.
Once the changes have been agreed to by both attorneys, then you will be able to sign the contract, give your attorney the down payment check (which will be deposited in the attorney escrow account) and the contract will be sent back to the seller’s attorney so that the sellers can sign it.
The Mortgage process
- Application – Lender completes application with client and runs credit, then also retrieves the following documents from the client:
- 2 Forms ID
- 2 months Bank Statements (and any other retirement/asset accounts)
- 2 years W-2’s
- 2 years Tax Returns
- 30 days Paystubs
- Disclosures – Terms of the Mortgage Agreement
- Opening – Verifications of Employment and Tax returns, Title Request sent out to Attorney, Appraisal ordered.
- Processing – Documents needed to be sent to underwriter collected, Fraud Search, background search, may ask for clarification of other documents.
- Underwriting – Underwriter reviews and gives a decision (Approval or Denial) Commitment is issued conditions for closing sent out to borrower; Usually around this time the Loan Officer will look to lock the loan if not done so already.
- Title Review and Appraisal Review – This can be done earlier, but due to the length of time the appraisal and Title take to come back, they usually come back at around this step.
- Resubmission to the Underwriter for a Clear To Close.
- Underwriter reviews the Title, Appraisal, and the Conditions sent in from the borrower, as well as the terms of the mortgage and grants permission to close.
TAKE NOTE: your mortgage can be ‘Resubmitted’ more than once if there are additional conditions
Clear To Close – Closing Disclosure is issued, you can now close 3 DAYS following the date of issuance for the CD
Scheduling – The attorney for the bank, or Settlement Agent will reach out to coordinate a time where all parties can close
The Walk Through
The walk through is usually done the day of or the day before the closing.
This is your opportunity to make sure that the home that you are purchasing is in the same condition as when you fell in love with.
This is not the time to find new things wrong with the house, because you should supposedly already have known and addressed that with your credit report.
For example if the refrigerator is not working and when you saw it the first time it was, well… then this is an issue that your Executive Group Realty agent will be able to address.
Have a clipboard and a checklist with you and go through the systems in the House.
Is there an alarm, a Sprinkler System, the HVAC system… all of these systems need to have instructions so that you can properly operate them without too much trouble.
This will also give you the opportunity to speak to the seller about his home and absorb any tips that he may have for you.
The Closing
This is the day that you have been dreaming of.
Most likely today you will be taking possession of your new home and start your new life in a different neighborhood.
Your attorney will give you specific instructions on what to bring, but just to be Prepared, your Executive Group Realty agent will give you a brief rundown.
- Certified Checks as requested by your attorney.
- 2 Forms of I.D. make your driver’s license one of your I.D.s
- Your paid in full Insurance binder.
Make sure that you get there at least 15 minutes before the start as you have a lot of Paperwork to sign.
Follow your attorney’s directions at the table, who will most likely have you sit one on each side.
Attending the closing will be: The title closer, Bank attorney, your Attorney and the Seller’s Attorney. In some cases your agent will be attending although it’s not necessary.
The closing should take approximately 45 minutes and when you’re done, you will receive the keys to your kingdom!
Congratulations! You’re a homeowner, good luck with your home and don’t forget to leave a 5 start review for your Executive Group Realty Agent and refer them business!