What to Consider When Buying a House in New York?
Buying a home is fun, but it can also be complicated and a bit scary. It's important to know your rights and legal issues ahead of time. Learn about real estate agents, open houses, paperwork and more before the process begins.
- Can you afford to buy? Before buying a home in New York, it's a good idea to review your finances to make sure you can afford the purchase and you're ready to move forward.
- Study the neighborhood. Find out about the diverse areas of New York, and specifically the area in which you're considering buying. Observe the market in that area by reading local papers and checking out recent home sales. Visit some open houses and compare the homes, sale prices, and features. It's fun and informative.
Using Real Estate Agents
Real estate agents can be very helpful when you're buying a home. You don't want to find out in the middle of the process that the stress and confusion is causing your to make mistakes or lose out on important negotiations. An agent can help facilitate the paperwork, home inspections, and mortgage broker selection. Real estate agents focus your home search and save you time by only showing you properties that meets your criteria. You can't rely on the listing agent for help because listing agents represent sellers. Real estate agents earn a commission commonly paid by the seller.
When you're looking for agent, try to find one who knows the areas where you're considering buying. Confirm that the agent is licensed in the state. Ask for the agent's history of home sales in the area over the last year. The New York State Association of Realtors® has more detailed information for homebuyers regarding agents.
Choosing a Lawyer
In New York, you must retain a lawyer to handle a portion of your home purchase. A lawyer will assist in ensuring that the mortgage documents are in order, such as a mortgage commitment letter, good faith estimates of closing costs, escrows and proper calculation of lender's fees. Title insurers, friends, family, and bar associations can recommend local real estate lawyers.
New York Property Condition Disclosure Statement
Sellers must disclose known issues about their properties in a detailed form. You can usually find these forms at open houses, and you should be provided with a copy before making an offer on the property. Property owners are required to disclose lead hazards in all states. Visit the Environmental Protection Agency's website for more detailed information.
Real Estate Purchase Agreement
The purchase agreement contract is a standard form, but your lawyer might want to include additional language to protect your interests and customize it to meet your needs. The agreement must include the purchase price, total down payment, and closing date. A purchase agreement also specifies who pays for which settlement or closing costs, the type of loan you're applying for, the interest rate, the term of the loan, and the date by which the loan must be in place. Oral contracts for purchases are not enforceable.
House Inspections and Appraisals
Lenders require property appraisals. The appraisal cost is included in closing as part of the mortgage fees. The appraisal verifies the value of the home by comparing it to similar properties.
Home inspections are an assessment of the property that give buyers information about anything that's wrong with the house, especially if it could affect the value. The buyer usually pays for this inspection. You can find an inspector by visiting the websites of the American Society of Home Inspectors or the New York State Association of Home Inspectors. Possible inspections include searches for pest inspections, water analysis, radon gas tests, lead hazards, on-site sewage inspections, well water tests, and underground oil tank inspections.
A title search is necessary to verify that the home you're buying is free from liens that could keep you from taking legal possession of the property. Title search and insurance are legal issues your lawyer will take care of. Probate, construction, tax and other liens are on record with the county or municipality. Discovering issues with the property's legal ownership in advance saves time, money and grief. After the title search, if there are no issues, title insurance is issued on the property. Title insurance offers protection from financial loss due to title defects or claims against the property. Any title issues that may come up must be cleared before you can take title.
Buying Foreclosure and Short Sale Properties
When you're buying foreclosure or short sale properties in New York, the seller is the servicer or investor. The seller manages the sale and provides the release of title, sometimes called a short payoff. Lenders typically set the procedure for their foreclosures or short sales. It's just as important to have a real estate agent for this type of transaction as for other real estate purchases, because all the same issues apply. Short sales or foreclosures are not necessarily faster or cheaper. The purchase price must satisfy the lender or investor holding the property.