You will soon become a homeowner. Your big decision to purchase your own home has finally arrived. The process will become much easier and a less stressful experience for you when you have an experienced Tesla Realty Group LLC agent by your side. Our agent will guide you step by step with your home search and purchase.
Purchasing Your Home
There are several steps to buying your home. Since this is your greatest financial decision, and also an exciting and emotional moment in your life, it is very important that you are educated about the home buying process. There are three major stages: pre-purchase planning, home shopping and closing on your home.
Make sure you are financially ready
You have to evaluate your finances carefully to make sure you are financially ready to purchase your home. If you need to take out a mortgage, talk to a mortgage broker and get a pre-approval to know what you can afford before the search for your new home begins. Our agent will gladly refer to you quality mortgage brokers, if needed. Our agent will discuss with you your desired features, location, and budget for your new home. Contact an attorney and your accountant to understand thoroughly the financial and legal impact of your purchase.
Preparing paperwork for your Mortgage Lender
Gather your paystubs, school and car loans, credit card records, statements from brokerages, banks and retirement accounts and income tax returns to secure your mortgage. Your mortgage lender or our agent can provide a complete list of what will be needed.
Our agent will help you to find your perfect home
Our agent is committed to finding you a place to call home. Careful research, expert advice and a personal experience are what a Tesla Realty Group LLC agent can provide in assisting you with a successful transaction. Our agent’s dedication, combined with extensive market knowledge, will result in your complete satisfaction. Your Tesla Realty Group LLC agent will assist you in completing a purchase offer when an official offer to buy your home is being made. That offer will include the proposed price, a list of what is to be included in the sale such as fixtures and appliances, contingencies or terms the sale is dependent on including a satisfactory home inspection, secured financing, sale of buyer's current home, seller concessions including assistance with closing costs, proposed closing date, and an offer expiration date, which is typically 24-48 hours.
Upon submitting your offer, the seller will review it and can accept, reject or make a counter offer. The purchase offer is not binding until both you and the seller sign the agreement.
Closing Costs and Fees
Loan origination fee: An origination fee is similar to any commission-based payment. If a lender takes a 1% fee for originating a loan, they will make $1,000 on a $100,000 loan, or $2,000 on a $200,000 loan.
Points: A point is a fee usually equal to 1 percent of the loan amount. It is paid at closing.
Appraisal fee: Your lender will choose an appraiser to evaluate your home and the cost (typically $300 - $500) may vary based on the amount of your loan, and the type and use of the property.
Credit report: It covers the expense of your credit history report.
Interest payment: You may pay interest on your mortgage loan to cover the time between the closing date and the date your first mortgage payment period begins. It is important to note that interest on a mortgage is usually paid in arrears at the end of the time period it covers. For example: If a closing is on May 15, and your first monthly payment starts to accrue interest on June 1, an interest payment covering the period between May 15 and May 31 may be required at closing. Consider this timing when scheduling your closing. It is a fee you can reduce by closing near the mortgage due date.
Escrow account fees: The escrow officer makes sure the closing goes smoothly and everyone gets paid what they are owed (including, of course, the escrow officer 1% to 2% of the cost of home). After the closing, the escrow agent records the deed and title transfer that make the home officially yours. Many mortgage lenders hold money in escrow to pay property taxes and insurance. Each month, you pay a portion of the estimated annual costs along with your principal and interest.
Title search: A search of the public records to ensure that no one but the seller has a valid claim to the property.
Title insurance: It relates to insurance that protects the lender and buyer from losses that may result from disputes over the property's title. Typically, the buyer purchases the Lender Title Insurance.
Other Third Party Fees
Document preparation fee: It is charged for the preparation of the closing documents
Underwriting Fee: It covers the costs of the underwriting process, which is the analysis of the risk involved in making a mortgage loan.
The Loan Estimate
Tesla Realty Group LLC agent will always be with you during your home purchase. As you can see the closing process and costs can be very complex. Your lender will provide you with a Loan Estimate, a three-page form that you will receive after applying for a mortgage. The Loan Estimate will tell you important details about the loan you have requested. The lender must provide you a Loan Estimate within three business days of receiving your application. The Loan Estimate is a new form that goes into effect on October 3, 2015.
The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. In addition, the form indicates if the loan has special features that you will want to be aware of, like penalties for paying off your loan early (a prepayment penalty) or increases to the mortgage loan balance even if payments are made on time (negative amortization). If your loan has a negative amortization feature, it appears in the description of the loan product. The form uses clear language and is designed to help you better understand the terms of the mortgage loan you have applied for. All lenders are required to use the same standard Loan Estimate form. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you. When you receive a Loan Estimate, the lender has not yet approved or denied your loan application. The Loan Estimate shows you what loan terms the lender expects to offer if you decide to move forward. If you decide to move forward, the lender will ask you for additional financial information.
Buying in NYC
Making the Offer
Submit a verbal offer to your agent who in turn will submit this offer in writing to the seller or seller's agent. The offer is comprised of the offered price, the desired closing date, amount of down payment, percentage of financing, and any terms of contingency. Once the offer is submitted you will also need to provide proof of financing. It would be suggested that you complete a net worth statement and gather together bank statements, recent tax returns, and any additional documentation that supports your claims. The more prepared you are at this point in the transaction the more serious the seller will take you. The seller has the right to listen to multiple offers so by being prepared you may give yourself an advantage over others who are not. In an instance where there are multiple offers this may make a difference. After considering the offers the seller may choose to accept the offer, to counter the offer, or to reject the offer. If the offer is rejected the buyer may submit another offer with different terms. If the offer is countered the buyer will have opportunity to raise the offer or change the terms as well. If the seller accepts the offer then we move to the next stage in the buying process.
Upon offer acceptance the real estate agents will submit a memorandum of sale to the sellers attorney from which they will draw up the contract. The seller's attorney will submit a copy of the contract to the buyer's attorney, who will review the terms of the deal. If the buyer is purchasing a coop or condo the buyer's agent or attorney shall request a copy of the board package, the building financials, and an offering plan. The buyer's attorney will also request a copy of the board minutes if the buyer is purchasing a coop. The real estate attorney is the buyer's last line of defense and will play a vital role from here forward. A real estate attorney can make or break a deal at this stage of the process. This period of the negotiation is known as the period of “Due Diligence”. Generally, the buyer has 10 days in which to review the contract, agree to the terms, and sign the contract, however, this period of time may vary and will depend upon factors ranging from the number of potential buyers to the sellers desire to move quickly. Upon signing the contract a deposit is due and will be placed in escrow. The deposit amount is negotiable but is generally 5-10% of the sale price, with 10% being the norm. There are two types of Due Diligence that the seller engages in during the 10 day period. One portion is the legal aspect dealing with the contract and the terms contained, the other is the physical inspection of the property. The buyer has the right to inspect the property prior to signing the contract. It is advisable for a buyer to seek out a licensed professional. The results of the inspection should be forwarded to the attorney and the real estate agent. If there are any problems out of the ordinary there may be cause for some additional negotiation on the price. Once the buyer is satisfied with the terms, the contract is signed. Upon signing the contract the buyer should contact his lender in order to start the process of applying for a mortgage. This process coincides with the processing of the board package (if necessary) and will help to determine the eventual closing date. This process usually takes between 6-8 weeks to complete.
The vast majority of housing purchases in New York City are condo and coop apartments. If a buyer chooses to purchase one of these forms of ownership they will have to complete a board package as part of the purchase process. Whether the buyer chooses a coop or condo, the buyer must submit a board package with a copy of an executed (signed by both parties) contract. A typical cooperative board package requires at the minimum, the following: Personal and Business Reference Letters, W-2's, pay stubs, or Employment Verification Letters; Bank and Brokerage Statements, Net Worth Statement, two-years tax returns and the mortgage application and loan commitment. It is important that the buyer work with his/her agent in order to properly complete the board package. The package should be neat, presentable, and contain a letter of introduction. Once the board package is complete your agent will submit it to the managing agent for review. The managing agent will review the package, and if all is in order, will submit it to the board. If the buyer is purchasing a coop there will be an interview conducted by the board. After the interview, the board will notify the buyer of their decision, generally within 72 hours, but boards will reserve the right to take longer if desired. If the buyer is purchasing a condominium there will only be a review of the board package but, there will be no interview. The board of a condominium does not have the right to turn down a buyer that is acceptable to the seller. However, they do retain the right of first refusal on any purchase. Upon board approval, the buyer must notify his attorney who will coordinate the closing date with the seller's attorney. A closing typically takes place 7-14 days after board approval.
When the closing date is set the buyer will arrange for a final inspection. This final inspection, or walk through, is generally held as close as possible to the closing itself. When it is possible it is best to have the walkthrough immediately before the closing. This will assure the buyer that the property will be delivered in the same condition as when they left it. At the closing, the buyer will sign papers agreeing to a mortgage (if applicable) and provide a check for the difference between what is owed and what the mortgage covers. If the buyer is purchasing a coop they will receive a stock certificate and proprietary lease. Typically, a closing will last about 2 hours. After the papers are signed the buyer will get the keys to the new home.
It takes about 1-2 weeks from offer acceptance to an executed contract, 6-8 weeks to secure a mortgage and an additional 1-2 weeks to schedule a closing date. This is a total of 8-12 weeks on average from offer acceptance to close for a townhouse or condo. It generally takes an additional 2-4 weeks for a coop to meet and approve a buyer so the typical time frame for a coop buyer is 3-4 months. Please always ask questions if you do not understand any part of the purchasing process in details. Our Agent is here to assist you 24/7.