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Trulia New Y…, Other/Just Looking in New York

What is the first step in home-buying? Should one work with a bank first or a realtor first?

Asked by Trulia New York, New York Mon Mar 25, 2013

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Hello,
When you buy in Manhattan, it is best to speak with a real estate broker first.
Your real estate broker/ sales agent will pre-qualify you. Being pre-qualified by a real estate broker
Trumps being pee-approved by a bank since, the process of buying in Manhattan is much stricter.
What does that mean? It means that you can be pre- approved for a certain amount of money, but when you Go out to purchase a property in Manhattan, and in many cases, you will only be allowed to borrow a lesser amount from the bank than the amount stated in the pre-approval letter and that restriction will be stated in the house rules of the property you have selected for purchase. You will have the following statement: maximum financing is 80 percent of the sale price, or it can be 75 percent or 70 percent etc..
Once you are pre-qualified and shortly ( and I mean shortly thereafter) , you should get a pre-approval letter from a bank. Since with any offers you ore presenting to the seller here in Manhattan, we are always presenting the following, the pre-approval letter along with the REBNY (real estate board of New York) financial to the seller. People who go to the bank first, think that they can afford a more expensive apartment. The pre-approval letter should be definitely obtained from the bank just after one speaks Goan agent and it should be done right away. At other questions, you may have, please fee free to contact me @ fhamberger@corcoran.com
0 votes Thank Flag Link Sun Mar 31, 2013
And I'm really late- absolutely speak to a mortgage person 1st-where you do your banking is a good place to start, or get a recommendation, you may not end up using that person, but at least you will know what you can afford...based on your credit report, your income, down payment and how much debt you have (existing mortgage,car loan, student loan, credit card debt, etc.etc) nothing like finding a beautiful place you fall in love with-only to find out later you can't afford it or loose it to someone else that has everything in order. My opinion Terry K 718-614-3167 or email TKorahais@elliman.com
0 votes Thank Flag Link Sun Mar 31, 2013
Late to the party but I really want to put my two cents in.

With the vast majority of my clients; my loan officer of choice is there with me during the initial the consultation. We present both a buyer and lender presentation. The entire consultation is extremely interactive. The buyer was asked prior to bring specific documents and usually at the end of the session the buyer's affordability is crystal clear. The buyer doesn't need to make two trips and a business relationship begins.

The problem sometimes with going to a lender first, as I have experienced often, is that the buyers mortgage eligibility is done half ... . For example the loan representative neglects to take into consideration taxes. For a example a buyer who resides in the city and meets with a local loan officer will get pre approved for a home value with city taxes as oppose to where they really intend to purchase say in Long Island. As a result they have inaccurate information pertaining to their affordability. Unsuspecting agents will take that pre approval at face value and everyone's time/money could potentially be wasted if the application is later denied.

Another common problem is that the loan representative neglects to review the write offs from the buyer's tax return in the Schedule A section, which for those who understand, can greatly alter a buyer's actual affordability.

Many of the pre approvals are not worth the piece of paper they are written on and that's why some agents feel more comfortable working with a lender they personally know and trust. It's not to say that the aren't excellent mortgage brokers outside the agent's circle, of course there are. I like the way I do it; I don't experience decline nightmares.

So what is the first step for a buyer; it depends on the skill set/knowledge of the professional they approach.
0 votes Thank Flag Link Sun Mar 31, 2013
William, it is funny to me! I respectfully disagree with almost everything you're saying. Your statement indicates that only a Realtor knows best as to closing costs and financial qualifications over a lender? I'm not sure what lenders you've worked with, but there is no way that a Realtor should know best when it comes to these sort of things over a lender, and if they do it only speaks to how poor of quality that particular lender is. In my opinion every good Realtor should know some about mortgages, every good Loan Officer should know some about the Realtor's end as well. But I would never consider myself more fit to answer Realtor questions over an actual Realtor.

As far as how a buyer can decide which Realtor or lender to work with, I'm not sure what website exists that a buyer can search through ALL the licensed Realtors and view their "experience records". Other than the actual MLS Realtors use, were one can search and see the actual trasactions Realtors worked on, which isn't available to the public by the way, there is nothing available out there. If you mean the actual websites to SOME of the major brokerage firms, that simply is not accurate. That would leave out every other firm that wouldn't fit your description of a "major brokerage". Good Realtors can work for smaller firms too!

I would also like to address this, you claim that Realtors know which mortgage professionals to refer buyers to, simply because their the ones at your office sales meetings, presentations and industry events? These are just Loan Officers that so happen to have a relationship with your broker and were invited or allowed to do presentations or Loan Officers you meet or run into at industry events, this does not make them exclusive to quality lenders, but rather exclusive to the lenders YOU know, 2 separate different things. How does a Loan Officer know which agents to refer their buyers to? The same way you do, I would refer buyers to those agents I've worked with and feel confident will service my clients the way I do, but it certainly doesn't make those agents I know the only good agents out there, buyers are always free to go with other agents who they may have been referred by friends or family. You're also incorrect by saying there is no website were you can view a Loan Officer's experience. Unlike Realtors, lenders have a universal website through the NMLS which has EVERY LOAN OFFICER's experience and licensing information available to the public.

With all this being said, nothing changes the fact that a buyers #1 step is to be pre-approved, so that means a buyer must meet with a Loan Officer first. How they meet that Loan Officer, that's obviously going to depend on who they run into or are referred to by their friends and family.
0 votes Thank Flag Link Wed Mar 27, 2013
The age-old question appears yet again. What ever happened to all the "informed" customers that the internet supposedly produced with it's plethora of resources? It all comes back to it's genesis, the broker.

We are the starting point regardless of how many hours a "customer" spends looking at inventory online, drooling over what they can't afford. As such, I have no problem with any prospective customer contacting me first.

We as brokers, do need to service these customers. After all, some broker is going to close them sooner or later. I won't allow showings for someone who is not pre-qualified. I will however invite them into my office to discuss the process, what is to be expected and what their next step is, which usually is getting pre-Q'd. This is where we separate the real customers from the lookers but after that, we move forward.
0 votes Thank Flag Link Wed Mar 27, 2013
It's not funny. It is easier for a buyer to find a good real estate agent because their experience records are on the websites of all the major brokerage firms. The agent not only knows how to explain financial qualifications (after many many board package preparations) and closing costs (after many many closings, which mortgage brokers do not attend) but he knows which mortgage brokers to refer the buyer to, as a result of many presentations and updates by mortgage brokers and direct lenders at office sales meetings and industry association events. How does a mortgage broker know which real estate agent or broker is appropriate for the buyer, if any at all? And where does a buyer go to look up the experience records of mortgage brokers, if any are public?
0 votes Thank Flag Link Wed Mar 27, 2013
I find it hilarious how some agents say that buyers should seek a Realtor before a lender, only to send them to a lender themselves. That only re-enforces the fact that a buyer's first move should be to meet with a lender, who should be able to discuss things like budget and closing costs better than any other party involved, after all they are lenders!
0 votes Thank Flag Link Wed Mar 27, 2013
I feel working with an agent is more crucial in this market then speaking to a mortgage broker which takes very little time. The real estate climate is tight and working with an agent that acutally "listens" to your needs and requirements is key, especially when it comes to your budget. You also need an agent that will guide you and explain the differance between a condo,co-op, the differance in closing cost, what's a sponsor unit, land lease..etc...and of course it's a relationship which has to work smoothly and without surprises. Best of luck, I'm here if you need to speak to me. Regarding financing I'd suggest contact Patricia Lavigne of Luxury Mortgage located at 122 E 42nd St, NY, she's at plavigne@luxurymortgage.com or 212-324-3000. Please note I do not receive compensation for my referrals, I only refer people I've worked with and trust.

TONY LARA
Licensed Real Estate Salesperson
CHARLES RUTENBGERG REALTY
212-688-1000 EXT-435 (O)
0 votes Thank Flag Link Wed Mar 27, 2013
You should start with a real estate agent.
The real estate agent will tell you how to
pull together your financial information.
Then he will direct you to a mortgage
broker who can use your financial
information to get you a certificate of
qualification or a certificate of pre-approval
that will guide him in finding the best homes
for you to see and bid on if you like one.
William J. McBurney, Jr.
1st Prize REBNY Deal of the Year 2012
Douglas Elliman Real Estate
1995 Broadway-4th Floor
New York NY 10023
wmcburney@elliman.com
Office: 212 769 6526
Office Fax: 212 873 6381
http://www.elliman.com/wjm
0 votes Thank Flag Link Tue Mar 26, 2013
Best approach is to work with a mortgage specialist to get preapproved first. Sellers will not consider offers without a preapproval.
Real estate listings sell quickly. Having your preapproval puts you in a position to submit your offer in a timely manner.

Always helpful to have the following documents readily available when applying for a preapproval:
- Copy of your recent paystubs for the last 30 days
- Copy of your W2s for 2011, 2012
- Copy of your recent 2 year's federal tax returns- all schedules
- Copy of your bank/ brokerage or retirement statement for the recent 2 months
0 votes Thank Flag Link Mon Mar 25, 2013
Getting per-qualified is the initial step in the mortgage process, and it's
generally fairly simple. You supply a bank or lender with your overall
financial picture, including your debt, income and assets. After
this information, a lender can give you an idea of the mortgage
amount for which you qualify. Then you will have a better idea
of how much you can look to buy. If you need any help please feel free to call.

Fajardo Delacruz
Licensed Real Estate Agent
Century Homes Realty Group llc
Direct Line: 347-932-0609
0 votes Thank Flag Link Mon Mar 25, 2013
Buyers should always meet with a lender before anything. First, buyers should meet with Loan Officers and allow them to review credit report, income and asset documentation. This is necessary to determine how much of a mortgage the buyer qualifies for. After this, the buyer should receive a pre-approval letter and begging searching for properties.

One the buyer finds a property and has successfully negotiated the terms of the purchase (price, seller concession, etc.), and has moved forward with a sales contract, they should meet with the Loan Officer and submit any additional required documentation so that the loan process can now begin.

Borrowers will be required to sign disclosures, pay for an appraisal report and hand in any required documents. The lender will then process the loan and should be able to issue a commitment letter. Then it's just a matter of satisfying any conditions the lender put in place (title report, homeowner's insurance, etc).

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
0 votes Thank Flag Link Mon Mar 25, 2013
If you are planning on obtaining a loan to purchase the home then it is almost always a good idea to talk to a lender before you start driving around looking at homes for sale with a real estate agent.
0 votes Thank Flag Link Mon Mar 25, 2013
Figure out your finances first to know what you'll be able to finance a property within your desired price and size.
0 votes Thank Flag Link Mon Mar 25, 2013
Before beginning your search you should have a general idea of what kind of home you are looking for, taking into consideration your budget. You can speak to a real estate attorney who can go over the entire process with you, access your needs and point you in the right direction. Please feel free to contact me, I would be more than happy to help.

Olga Friedman
http://www.DavisandFriedmanLaw.com
0 votes Thank Flag Link Mon Mar 25, 2013
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