What do I need to optimize my buying experience? What can I do to get the best deal in town?
Here’s what you need to help move your closing along more quickly:
Annual Income: Usually you can borrow up to two times your gross annual income. Monthly mortgage and maintenance payments should not exceed one week’s gross salary. If you liquid assets equal more than this, you may be able to borrow more.
Financial Statements: Make sure an accountant prepares your financial statements. This should list your net worth including assets, liabilities, salary, bonus, and anything else necessary. Your real estate agent can then submit an offer with your financial statement. The most qualified and well-prepared buyers are the ones whose offers are accepted. When a property has multiple bids, having a complete financial statement is imperative.
Asset Valuation: Unfortunately, a down payment doesn’t qualify a buyer for a co-op or condo in Manhattan. Usually a coop or condo board wants guarantees for mandatory maintenance fees. They are looking for assurances against unexpected loss of income. Many buildings are looking for liquid assets totaling one year’s worth of maintenance and mortgage payments after closing. Some might even require liquidity up to three years of combined costs.
Why are credit checks important and how does it fit into the buying process?
A credit check is usually performed by a mortgage broker and is based upon your credit history. If you have any disputed claims, make sure to have them removed immediately from your credit report. Never throw away any information that shows that the issue was resolved.
What does it mean to be pre-qualified?
Pre-qualified is better known as being pre-approved. Being a pre-approved buyer will reassure a seller that any offers made are bona fide and that a buyer can purchase the home. The most successful offers are submitted with a buyer’s pre-qualification letter (if the buyer is not paying cash).
Should I have a real estate attorney selected before I make an offer?
You MUST have a real estate attorney that specializes in the MANHATTAN market, not Westchester or anywhere else. The attorney must know and understand the intricacies of Manhattan laws and regulations. An attorney who is an expert in New York City can respond more quickly to any problems that take place and expedite the closing, if necessary.
What is a closing?
A closing takes place when a buyer gives the seller money in exchange for ownership and title to a particular property. The seller signs several documents, including a deed. Usually the location of the closing is at the office of the bank’s attorney. The parties present will include: seller, bank attorney, brokers, seller’s attorney, buyer’s attorney, and title closer.
What do I need to know for the application process?
For a mortgage, condo, and co-op board application, buyers need to gather their financial documentation including the last two month’s bank statements, brokerage statements, and any other assets, as well as current income verification. Boards and banks require a minimum of 2 years of federal income tax returns while self-employed buyers need to provide at least 3 years of federal tax returns and a letter from an accountant verifying income.
When do I need to start looking for a new home?
Many people start looking for a home 4-6 months before they move. If you are looking to finance, it usually takes roughly 3 months from the purchase date to close.
Where do I want to reside?
Manhattan has many exciting neighborhoods. Discover which one suits you the best before beginning your search so it’s easier to narrow down which residence makes the most sense for you. For example, do you want to be close to nightlife, public transportation, work, friends? You might need to be open to different places due to affordability. Keeping an open mind will help you in your search!
How do I win the bid for a new residence?
ALWAYS sell the seller on the fact that you are a qualified buyer with the pre-approval mortgage letter and supporting financial documentation. The rest will fall into place. In a competitive market, you have to be ready to show you are the best buyer and how you can qualify to purchase the property.
When is the best time to look for a property?
The best time to view a property is during the week. Be flexible about hours and try to get out at work for lunch or early to view a place at the end of the day. Avoiding weekend shoppers and open houses makes it easier for you to appreciate the property without all of the congestion.
What do I need to do in order to make a deal take place?
Once you find a property, you need to make a written offer with your real estate agent that has your pre-approval letter and financial statement inside. Once the written offer is accepted, your real estate agent will prepare a transaction summary with both agent names, attorneys and mortgage broker. Finally, the seller’s attorney sends over a contract to the buyer’s attorney to review. The seller’s attorney then prepares a contract of sale. After the buyer’s attorney looks at the contract and negotiates the terms while understanding the financial statements, the buyer has a sit-down meeting with the attorney to understand the terms and if they agree to them, sign the document and give a 10% deposit (sometimes 20%). This amount is usually held in the selling attorney’s escrow account. The seller then executes the contract and sends back.