Home Buying in 11238>Question Details

Linda, Home Buyer in 11201

Hello! My daughter is trying to purchase an apt in brooklyn heights NY. I am struggling with the process

Asked by Linda, 11201 Tue Jun 23, 2009

for real estate purchases in Brooklyn NY. She recently placed an offer on an coop which was accepted but the property stays active on the market until the contract is signed. Approximately a week after her offer was accepted another party placed a second offer and they lost the property. In the mean time you already have attorney expenses as they review the coop and the financial condition. This just doesn't seem right. Any advice you can provide would be appreciated.

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Dear Linda,

Don't give up. Sometimes things just don't work out. If you and your daughter like her attorney, then go ahead, trust him or her again to help get your daughter into the right home this time. If not, then by all means, suggest your daughter shop around for an attorney who specializes in real estate transactions.

It makes good sense to protect yourself with the single biggest purchase of your life by hiring an attorney
who specializes in real estate transactions.

It is common here in New York to have an attorney represent the Buyer in a purchase transaction. I know elsewhere in the country this is not necessarily the case. Frankly, I can’t understand how anyone could proceed with signing important legal documents without an attorney present to review and advise.

Here's a nightmare example of what can happen to a Buyer who doesn't have an attorney protecting her best interests. This is a story of an actual client I met:

A Buyer signed a contract to purchase an apartment without an attorney representing her. The Buyer is not the least bit qualified for the mortgage loan. There is no way possible this Buyer can obtain financing to purchase this apartment.

Normally, you might think, “Well, alright, Buyer makes application to the bank, is denied for the loan, presents the denial letter to the Seller and gets the downpayment back.” Seems simple enough—and very common, indeed—but, not in this case.

The contract of sale has no mortgage contingency. And the Buyer put 10% of the purchase price down on signing.

If the Buyer had an attorney, at the very least the attorney would have made provision for a mortgage contingency in the contract. If the Seller refused to provide such a contingency, the attorney would have advised the Buyer of this deficit and the potential loss of downpayment. If the Buyer insisted on proceeding with the purchase minus the contingency, then an attorney could have advised the Buyer to be absolutely certain that mortgage financing was possible before signing the contract.

No attorney. No mortgage contingency. No mortgage loan approval. No way to get back the 10% downpayment.

Have your attorney on your “team” before you get out there shopping for a home. Your team of professionals should be at your disposal to advise you before you open up the paper to look at the “Homes For Sale” ads or contact a Realtor to show you homes.

A good real estate attorney seeks to do two things in a purchase transaction:

1. Protect her client. This includes a review and revision of the contract of sale to remove any harmful language/requirements. Also a review of the title report to verify there are no obstructions to you, the Purchaser, receiving a good "clean" title at closing. Lastly, a thorough review and explanation of the closing documents.

2. Help the Purchaser accomplish the goal of homeownership. A good real estate attorney understands that buying a home is a happy time: someone's dream is about to come true! Thus, the adversarial nature of the contract transaction gets toned down to a matter of reasonable conversations betwen the Purchaser's and Seller's attorneys. This isn't a lawsuit or divorce case, so the good real estate attorney has to tone down the rhetoric and find reasonable compromises---while still protecting his client---so that the goal of the contract is achieved: a home purchase.

Hope that helps!
Trevor Curran
NMLS #40140
1 vote Thank Flag Link Wed Jun 20, 2012
Dear Linda:

Brooklyn is like an island among itself when it comes to real estate and it is difficult for buyers especially if the property your purchasing is a good deal. What you experienced does not happen to often but does happen from time to time. What happens much more often is that the buyer having second thoughts and backing out of the deal. When a seller is thrust into a situation as you had described, it is hard for them to ignore the higher offer. I usually would recommend to the seller to at least give the first buyer an opportunity to raise their offer to match the competing offer. The bottom line is that neither party is obligated until you have a fully executed contract of sale.

A contract is fully executed when the buyer signs the contract and forwards it along with the down payment check to the seller's attorney... once the seller's attorney receives this the seller would then sign the contract, the down payment check will be deposited into the seller's attorney's escrow account... and then a fully executed contract would be returned to the buyer's attorney. At this point you would be in contract.

The key for you as a buyer is to move along this process as quickly as possible to limit the risk of the seller backing out or something going wrong. Here are some tips on how to do this:

1) Give your highest and best offer from the get go which will give you the highest probability of getting your offer accepted in the first place,

2) Once you get your offer accepted, make sure you get the seller's attorney information right away and make sure your attorney contacts the seller's attorney post haste and requests a contract of sale and the financials,

3) When your attorney receives the contract of sale form the seller's attorney, meet with your attorney right away to review the contract and sign it and give your initial down payment check,

4) After that if possible, hand deliver the contract signed by you with the down payment check to the seller's attorney the same day!

I have seen the entire process I described above done in one day if the buyer was motivated enough and did not want to lose the deal. I would also point out that a good attorney representing a seller could have a contract out to your attorney within an hour and usually will do so via fax or email.

You should also indicate to your attorney the importance of and your strong desire to get the deal. If your attorney does not prioritize this or does not have a sense of urgency, I would recommend you find another attorney who knows the importance of moving fast with a good real estate deal.

If you need help locating another property or if I can be of further assistance, please let me know.

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
1 vote Thank Flag Link Tue Jun 23, 2009
Hello Linda:

I hope all is going well for you since we last spoke! I appreciated that you called me to thank me for the advice I had given to you in my answer.

With regard to Mr. Kings answer below, he writes:
"I will agree with Mitchell but with some corrections!"

When I first read this statement I asked myself, what corrections, did I make a mistake? So I reread my answer, then read Mr. Kings answer and I noticed two things...1) I do not see where I made a mistake and 2) I do not see where Mr. King made any corrections to what I had stated. My answer was concise and to the point and fully addressed the true nature of the question.

Mr. King also stated "Was your agent the listing agent? If not, probably the listing agent found a BUYER!"
As an agent I find this statement offensive, it insinuates that real estate agents are unethical and that simply is not the case. I know when I represent a homeowner, I always present all offers in their entirety and give all buyers a fair shot regardless of if they are my own or another brokers. I do this because a) it is in the best interest of the seller and b) it is also required by New York State law for me to do so. What probably happened here is that another buyer simply gave a higher offer. What agent submitted that offer is a moot point because all offers have to be presented to the seller anyway. Besides, if you wanted to make sure you were dealing with the listing agents on every property you go to look at, you would have to be working with thousands of real estate agents! :)

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Tue Aug 4, 2009
Hi Linda:

it's sad and I emphatize with you! There's a lot going on here and there are uncleared things that were not mentioned by you! I will agree with Mitchell but with some corrections!

The buying process consist of 5 major steps:

1. Offer
2. Counter Offer
3. Acceptance
4. Contract Must be in Writing
5. Must give Consideration - Anything of Value (Down payment) .

These 5 steps must be met to have a fully executed contract! A buyer may change his / her mind prior to the contract reaching the seller's attorney office and sign by the SELLER! While being delivered by a courier, you may stop the order and still not be liable for anything! Likewise, the seller is not obligated to you, unless a legal and binding contract exist. Once the document arrives, seller signs the contract and your check is deposited, you have entered into a LEGAL and BINDING contract! At this point, if a SELLER backs out, he / she has bridged the contract and you may seek damages.

I see the process moved smoothly until you got the news, you LOST the DEAL! Well this happens a lot in Brooklyn! This is sad, but have experience it. Was your agent the listing agent? If not, probably the listing agent found a BUYER! Did your agent make a strong presentation (presenting pre-QUALIFICATION document, showing you were a better candidate capable of easily and quickly closing the deal?) Did your attorney move quickly?

It would have been unfair to the seller, were the property removed from the market after your offer was made. We keep showing the property until we have a LEGAL and BINDING CONTRACT.

In the future, move quickly, keep calling the listing Broker to show you are motivated, and have your attorney on his toes!

Good Luch

Pierre S. King, Associate Broker
Weichert - H .P. Greenfield
718 692-4444 Office
718 253-6853 Fax
917 407-6697 Cell
http://www.kandhHomes.com
http://www.hpgreenfield.com
WHEN PROPERTIES ARE FOUND CALL ME: http://www.weichert.com
email:MrRealEstateKing@yahoo.com
JOIN ME FOR FREE TIPS: http://www.twitter.com/1realestateking
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Web Reference: http://www.kandhHomes.com
0 votes Thank Flag Link Tue Aug 4, 2009
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