It’s back to school time, so I thought we would get in on the fun and do an ABCs of real estate series! Stay tuned over the next few months, as we complete the alphabet.
A is for Appraisal
This is the value that the bank assigns to your home. In this market, I have seen some deals where the purchaser waives the appraisal, meaning if the house does not appraise for the purchase price, the purchaser still has to purchase the house. I do not recommend this but if this is what it takes for you to get the house that you really want, we can craft language to protect you to the best of our ability.
B is for Binder
Also known as a sales agreement. This is the initial offer that the buyer puts in and contains all the proposed terms of the deal, including the balance at closing. Remember, the amount that you are putting “down” in total is not necessarily the amount that is the down payment on contract. Some real estate agents do not make the distinction. So if you really only have $20,000 to put on contract, but plan on only getting an 80% mortgage, make sure that the binder specifically states this. If you have any concerns, give me a call before the offer is submitted.
C is for Credit Repair
Having a great credit score is great when applying for a loan. We all know this. But it’s not all about the score, there can be other issues in your report which might make you less than desirable in the loan underwriter’s eyes. Know your credit report before you start looking. We work with a credit repair company that can do a “soft pull” and give you an honest opinion as to helping you raise the score and make your report look better. And if there are any errors that the credit companies fail or refuse to remedy, there might even be statutory compensation.
D is for Deed
The deed is the document which transfers ownership of the home. The seller signs it at closing and it gets recorded with the County Clerk to notify the world of the new owner. As a seller’s attorney, we like to see a copy of the deed prior to preparing the contract so that we know who is on title. For example, a couple might come to us to sell the house, and forget that they actually put their property into the name of a trust. We need to have the Trustee sign the contract in that case. If you do not have the deed, we can get it from the County Clerk for a very modest (under $10) fee.
E is for Expenses
Seller expenses generally include transfer tax (NY State and NY City), payoff of the mortgage, mortgage satisfaction recording fee, real estate commission, title closer pick up fee and attorney fee.
Buyer expenses generally include loan charges, mortgage taxes, tax adjustments, title charges, recording fees, title closer fee, attorney fee, mansion tax ( only applies to sales over a million dollars) and the Peconic Bay tax, if the house is in that region.
F is for Flipping
This is when an investor purchases a home, renovates it and sells it for a profit. Be careful when you are looking to purchase a “flip” house. Not all investors do a great job with their renovations, so make sure you have a good home inspector.
G is for Good Faith Estimate
This is now known as your loan disclosure. After you apply for a loan, the lender has to give you a loan estimate which breaks down the amount of your closing costs. This does not have to be exact, but is as accurate as possible. This way, you are aware of approximately how much this loan is going to cost you.
H is for Homebuyers (First Time)
Homebuyers buying their first home can apply for a Federal Housing Administration (FHA) loan. The United States Department of Housing and Urban Development (HUD) is insuring the loan, which allows for less money to put down, lower closing costs, etc. A Mortgage Insurance Premium (MIP) will be added to the mortgage payment amount for insurance, since borrowers could come with a higher-risk of default.
Until next month!
Super excited to announce that I have been featured on the cover of the Top 100 Real Estate Professionals Magazine and the Top 100 Attorneys in the Country. Such an honor! See the digital articles here.
In a constant endeavor to make Sugarman Law the best, I’ve started my attorney coaching again. We want to make sure you know that we remain dedicated to improving and streamlining the client experience. If you have worked with Sugarman Law and want to leave us a review, we would be grateful.
In personal news, my son James is off to college! We dropped him off on the 17th. Many of you might remember that he is going to SUNY Maritime. But, you might not know that he will graduate in his major (marine operations) as a Third Mate! Part of that training includes being part of the Regiment, wearing uniforms and working on a training ship. It’s all so exciting, and overwhelming, and I can’t wait to see him after the first 10 days of regimental training. Proud mom here!