Purchase process

«...ALL THE APARTMENTS YOU SHOWED US WERE OF HIGH QUALITY...»

The Purchase Process. When it comes to buying real estate you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but all the terms and conditions of the purchase. Our agents are equipped with a wide range of standard forms that are kept up to date with the changing laws and that will be fully available to you. In addition, your agent will cover the questions that need to be answered during the process. After the offer is drawn up and signed, it will usually be presented to the seller by our agent, by the seller's agent, or often by the two together. In a few areas, sales contracts are typically drawn up by the parties' lawyers.

• The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit receipt). It's important, therefore, that it contains all the items that will serve as a "blueprint for the final sale."

If your offer says "this offer is contingent upon (or subject to) a certain event," you're saying that you will only go through with the purchase if that event occurs. The following are two common contingencies contained in a purchase order:
• The buyer obtaining specific financing from a lending institution. If the loan can't be found, the buyer won't be bound by the contract.
• A satisfactory report by a home inspector "within 10 days (for example) after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies you. If not, the contract would become void. Again, make sure that all the details are nailed down in the written contract.

You're in a strong bargaining position -- meaning, you look particularly welcome to a seller -- if:
• You're an all-cash buyer; or
• You're already pre-approved for a mortgage; and
• You don't have a present house that has to be sold before you can afford to buy.
In those circumstances, you may be able to negotiate some discount from the listed price. On the other hand, in a "hot" seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.

Earnest money. This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." Your agent or attorney usually holds the deposit, which will latter become part of your down payment.

You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that's that, and the sellers could not later change their minds and hold you to it. If the seller likes everything except the sale price, or the proposed closing date, you may receive a written counteroffer, with the changes the seller prefers. You are then free to accept or reject it or to even make your own counteroffer. Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.

The Home Inspection. There's a lot more to know about the home you are about to purchase than location. Licensed Professional Engineers who specialize in pre-purchase home inspections will tell you that there is nothing more important than structural tests. If the home you are about to purchase does not have the structural integrity to give you peace of mind, you may be buying into a money pit and sleepless nights. A home inspection is not the same thing as a property appraisal. A home inspection is an examination of the property to determine structural soundness and the condition of the appliances. It is important that your home inspection is done by a qualified professional who has experience in engineering, architecture and construction. To find a qualified home inspector ask your lender, realtor or use a personal referral. The internet is also a great resource for researching reputable home inspectors. You may want to refer to the American Society of Home Inspectors. This is a non profit organization that should allow for non biased information.

The Closing Procedure. The period between loan approval and closing is critical. A number of important tasks must be completed by the seller and buyer. As a buyer, your main responsibility is to ensure that the property is in good condition and meets your requirements. You will also need certain types of insurance to protect your interests. Your sales contract specifies a date on which a meeting is held for the "closing" or "settlement" of the sale. The closing is the official transfer of ownership from seller to buyer. Except for cases of fraud, all obligations of the seller end, and the buyer takes over responsibility for the property. Therefore, it is important for both seller and buyer to complete all business prior to closing. Failure to get everything required in the contract completed will result in delaying the closing and, in some cases, may even jeopardize the transaction. It is especially crucial for the buyer to complete all inspections before closing because opportunities to address problems are limited, for the most part, to the pre-closing period.
Don't forget the little things, like bringing with you your driver's license or passport, your checkbook for any last minute adjustments, and all certified checks discussed with your attorney.
The closing procedure also depends on the property type. Following are a few explanations.

Cooperatives and Condos: The closing procedure will be usually managed in the office of the building's management company. At this meeting will participate the buyer, his attorney, the seller, the seller's attorney, the lender's attorney, a representative from the managements transfer dept., and the Agent(s) involved in the transaction. The buyer will first sign documents necessary to complete the loan transaction inclusive of a Security Agreement, Promissory Note, Stock Power, and an Assignment of Lease. Then, the buyer will sign all the documents that convey and secure the apartment, like Stock Certificate, Proprietary Lease and Consent, and Checks representing the balance of the purchase price.

Condominiums & Townhouses: The closing procedure will be usually held at the office of the seller or lender's attorney. This meeting will include the buyer, the buyer's attorney, the seller, the seller's attorney, the lender's attorney, the company closer and the real estate agent involved in the transaction. During the closure process the buyer will first sign all the necessary documents to complete the loan transaction, inclusive a mortgage and promissory note. The seller will then sign all the documents to convey the condo apartment to the buyer's name, including a Deed, Title Report, and Unit Power of Attorney. Checks representing the balance of the purchase price and adjustments are exchanged for the keys to the apartment or house.