Westchester County Real Estate Blog
Steps to Buying a Condo, Coop or Townhouse in the Westchester County Area
- Talk To A Mortgage Broker Or Bank And Get “Pre-approved” – You should know exactly what you can afford for a condo or coop or townhouse; what you should spend, and help you put your financial picture in perspective! PLUS WITH A PRE-APPROVAL IN HAND YOUR OFFER WILL CARRY MORE STRENGTH TO THE NEGOTIATION TABLE, particularly if being weighed against other offers. Most agents want a pre-approval letter, rather than a pre-qualification letter. The difference is that the bank will verify your income and assets and check your credit, which of course carries more weight than a pre-qual letter which is based on a simple telephone call where the numbers are not verified. It is not necessary for you to apply for a mortgage when obtaining a preapproval; you can always shop around after you find a house and make a decision then.
- Choose A Buyer’s Agent- Finding your condo, coop or townhome is a very serious and very emotional experience. However, realize that with the help of a professional who will guide you, educate you and work for your best interests, you have the best chance of finding your dream home. It is very important to treat the buying process as a business, and choose the best person for that job. A person who first explains to you your choices as a buyer and then proceeds to work with intense focus to find the best unit possible. Carolyn Schoemer has had additional special training as a “Certified Buyer Representative.” We have a team to help you and cover for each other.
- Choose An Attorney- Your attorney’s job is to protect you legally. Your attorney will review the contract and go over it with you and recommend changes to protect your best interests. He or she make sure that the home you choose is being delivered with all the necessary legal documentation and then work with the seller’s attorney, the bank or mortgage company, and the title company to bring forth a successful closing. They will review the offering plan and financial statements for the building you are interested in.
- Choose An Inspector- In this area, it is normal to do an inspection on condos and townhouses within 72 hours of the “accepted offer.” The inspector’s job is to tell you the condition of the apartment you’ve chosen and what repairs to expect in the future. Make sure the house inspector has the “ASHI” designation, which stands for “American Society of Home Inspectors.” The house inspector will ask you if you are interested in testing for radon, lead paint, termites etc. Most banks require only a termite inspection certificate and we recommend that the termite inspection be done by a regular termite company, not a general home inspector. If the place must be treated for termites, it is generally the seller’s responsibility to handle this prior to closing. It a high rise building and the apt. off the ground a termite inspections should not be necessary.
- Start Looking For Properties- This can be fun but in a seller’s market, it can also be stressful. You may not be able to find exactly what you want; often however, you will realize that some compromise may be needed. Take heart! With the help of a good Realtor, you will see the best apartments currently available and as you become better educated, you will see good value in the right place. It’s not easy, but it is well worth the effort!
- You’ve Found A Condo, Coop or Townhouse – It is time to start negotiations. As your buyer’s agents, we can prepare a market analysis of the apartment you have chosen to show its current value. Once you have given us an offer we will present it to the seller’s agent in writing with all the terms (price, down payment, amount at contract, closing date, inclusions, inspections, etc.), and a written preapproval.
- Negotiating On A Condo, Coop or Townhouse- When we start with a strong and complete offer, the negotiations hopefully will go quickly and smoothly. If this is not the case, we will continue to negotiate until we have an “accepted offer” or we realize that we cannot purchase this home for the price and terms that you want. It is not common to have more than one buyer bidding on the same property, and the seller may not give a counter offer. The listing agent may just ask for your “highest and best” offer and that may not even be the asking price. In that situation, it will be up to you how much you are willing to pay for that property. ALSO-JUST A WORD OF CAUTION… please realize that if the seller accepts your offer, the seller may get other offers on the property and is by law allowed to accept another offer. Therefore, it is urgent that we proceed with the inspections, contract and mortgage as quickly as possible! You are most vulnerable between the accepted offer and contract signing so be careful.
- Offering plan, all amendments & Financial statements (last 2 years) on the building – You are entitled to these from the owner as soon as you have an your accepted offer. Your lawyer will review them before you sign the contract.
- Now you have An “Accepted Offer” – As buyer’s agents, we have negotiated with the seller’s agent and you have an “accepted offer”. We will now write a memo of sale with all the terms set forth and notify your attorney. Usually the contract is not subject to inspections and therefore all inspections should be done within 72 hours of the “accepted offer”. This is very important since the property IS STILL AVAILABLE to be shown to other buyers. Should the inspections show problems that were not known or obvious, we may try to renegotiate (your attorney may also be a part of this). Once all issues are resolved, we now go to contract. It is customary in this area to give a 10 % down-payment check payable to the seller’s attorney escrow account. If you do NOT have 10% liquid to write a check please let us know so we can discuss other options.
- Signing The Contracts - The seller’s attorney prepares the contracts; your attorney will review them and with the agreement of the seller’s attorney make any necessary changes. You and your attorney will also go over the contract in depth to be sure that you understand all the terms. The contract is usually subject to obtaining to mortgage but may include any other unique terms to this deal. After the contracts are signed, they are delivered with a personal check (10% of the price to the seller’s attorney escrow account is normal deposit) to the seller’s attorney who will then ask the seller to sign. The seller’s attorney will then send a couple copies back to your attorney; you should keep one copy and send the contract to your bank immediately.
- Applying For A Loan- You may apply with the lender who pre-approved you or another lender. Once your application is complete and the signed contract received by the bank, the appraiser will contact us to see the apartment and prepare an appraisal of value. When this is complete and the bank underwriter has approved your loan, they will send you a commitment letter stated all the terms of the loan. Fax or scan a copy of the commitment letter to your attorney. Your attorney will order a title search and possibly a survey. In the case of a condominium they will apply for the waiver of the Right of First Refusal.
- Board Application - With a coop, you will need to send in your coop board application (this will come from us as your buyer’s agent) complete with the contract and your bank commitment and other requested documentation. Usually this involves 2 years tax returns and W2’s, reference letters both personal and business, reviewing the house rules etc. This is usually about a 30 day process. We will be more than happy to review your application for anything missing. Once approved, your attorney will need verification that you have been approved by the coop board. On a coop, the attorney will also have to do a UCC search which takes a few days.
- CONGRATULATIONS, YOU’RE READY TO CLOSE! THE QUESTION IS THE SELLER ALSO READY TO CLOSE?
- Important Phone Calls To Make Before Closing – Don’t forget to call the local utility company for gas and electric. You should of course also notify the telephone company and cable, if desired. We can give you the appropriate telephone numbers if you need them. You should do this when the closing date is confirmed.
- The Final Walk Through - You have your “clear to close” on your mortgage and the closing is set. Before the closing we will walk through your soon to be new apartment and make sure that everything is as it should be according to the terms of the contract. On the walk through, it is customary to check for leaks, test all appliances and plumbing and check that all items that are supposed to be included are left in the home. The home is usually supposed to be “broom clean” which does not mean scrubbed. All debris should be removed. The place should be completely empty except extra floor tiles etc.
- Attending The Closing - The big day is finally here! Bring your checkbook and photo ID and any certified funds requested by your attorney. Usually present at the closing will be the seller, the bank, the title company, both attorneys and both realtors. This is the place where you give the sellers the remainder of your down payment, your loan proceeds and any adjustments back and forth (for example, taxes already paid by seller etc.) The closing usually takes approx. 1-1/2 to 2-1/2 hours. CONGRATULATIONS! YOU NOW OWN A HOME!
- After The Closing - Call us with your new telephone number and let us know how things are going, or we will call you. Of course, if you have any questions or problems please do not hesitate to contact us. Please also keep us in mind if any of your friends or family need to buy or sell a home in this area, or other areas. We have a great network of agents across the country. We look forward to keeping in touch with you over the next several years. If you would be willing to give us a quote about your home buying experience which we can post on our web site for future buyers and sellers, it would be most appreciated. Like any business, many of our clients are referred by former clients.