The Home Buying Process
Buying a home can be exciting and joyous. However, the home buying process can get a bit confusing at times. We often act as the buyer’s attorney during real estate transactions. In an effort to answer some of their questions, we provide our real estate clients with the following overview of a real estate purchase . We hope that you find it useful as well:
BUYING A HOME (an overview):*
1. The Buyer usually contacts a Real Estate Broker to help locate a property he/she would like to purchase.
Real Estate Broker– Any duly licensed or authorized person, firm, or corporation who for a fee or commission lists for sale, sells, or exchanges real property.
2. The Broker helps the buyer find a home.**
3. The Broker usually conducts a Comparative Market Analysis to help determine the value of the home.
Comparative market analysis– An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
4. The Buyer usually makes an offer by submitting a real estate binder.
Real Estate Binder– An agreement intended to evidence a modest payment toward the purchase of real estate as evidence of good faith on the part of the purchaser and acceptance by the seller. (A real estate document generally used in residential transactions).
5. Seller accepts or rejects the offer.
6. Assuming the offer is accepted, the buyer then hires an engineer/home inspector.***
7. Once both parties have agreed to move forward, the seller’s real estate attorney drafts and sends a proposed contract to buyer’s real estate attorney.
8. Contract terms are negotiated by the real estate attorneys.
9. Buyer meets with his lawyer for the “contract signing.”
10. Buyer’s real estate attorney collects the down payment check, which is made out to the seller’s real estate lawyer “as attorney,” to be held in escrow, by the seller’s attorney, until the closing.
11. The signed contract and Down payment are forwarded to the Seller’s attorney.
12. Buyer receives a copy of the fully executed contract, signed by all parties. This is then used to obtain a loan (Commitment Letter) if necessary.
Commitment Letter– A promise by a lender to make a loan with specific terms for a specified period.
13. Buyer’s attorney orders a title examination & survey.
14. Once all issues are resolved and the lender gives a clearance to close, a real estate closing is set.
Real estate closing– The transfer of the real estate title from seller to buyer according to the sales contract. All parties, as well as a title closer and bank attorney, arrive to conclude the transaction. The buyer receives the title and keys to the real estate and the seller receives the balance of the purchase price.
**The Broker will likely request/require you to obtain a mortgage pre-approval before they begin showing you homes.
***The inspection can be done after step 12 if the parties agree. This is usually accomplished by placing an “inspection contingency” clause in the contract.
As always, The Long Island Real Estate Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a Real Estate Lawyer.
By appointment only: East Islip, NY 11730
*The above is merely an overview of a real estate transaction. Additional and/or different steps may be required during a particular transaction. This is not legal advice. ++All rights reserved.