For HomeBuyers in the New York Metropolitan Region: The Five Boroughs, Nassau, Suffolk, Westchester, Dutchess, Putnam, Rockland and Orange Counties, there's a tried and true method for purchasing a home. Because we use Attorneys here in the Downstate New York area, HomeBuyers benefit from very specific protections built in to this method.
While a HomeBuyer might make the Offer to buy a home in writing, until a Contract of Sale is signed in the presence of your attorney, the transaction isn't binding. Follow the tried and true method and don't let anyone influence you to vary from it; it's for your protection.
In a New York home purchase, the timeline goes like this:
1. HomeBuyer and Seller negotiate the Offer. Offer is best presented in writing. After much hand-wringing and back and forth negotiation, both parties agree on a price and terms of the sale.
2. Offer accepted
3. Contract of sale is prepared by Seller's Attorney and forwarded to Purchaser's attorney for review
4. Purchaser hires a Licensed Home Inspector (As per NYS regulations, ALL Home Inspectors must be Licensed). The Home Inspection is conducted PRIOR to signing contracts. If inspection reveals a problem with Foundation, Roof, Plumbing, Heating or Electrical, Purchaser's Attorney discusses with Seller's attorney to obtain satisfactory remedy PRIOR to contract signing. The remedy can be either a Seller repair or Seller credit to Purchaser at closing.
Since Home Inspection is done before contract is signed, the Purchaser has the opportunity to negotiate or walk away with no obligation to the Seller.
5. Contract Signing. Once all issues and concerns and terms of the Contract of Sale have been satisfactorily worked out by Purchaser's and Seller's attorneys---including any Home Inspection issues---the Purchaser meets with Attorney to sign the Contract and present an "Earnest Money Deposit." This is often misconstrued as the Down Payment.
In fact, this is money presented by the Purchaser for the Seller's attorney to hold in an escrow account until closing. This is often referred to as the "Good Faith Deposit" because it's the Purchaser's way of telling a Seller "I'm serious about buying your home and obtaining the mortgage financing to complete this purchase! Here's my money as a show of Good Faith."
6. Mortgage Application. Purchaser applies for and receives approval for the mortgage loan
7. Title Report. Purchaser's attorney orders a title inspection of public records to verify the Deed can be transferred from Seller to Purchaser with no liens, violations, or other encumbrances. Purchaser's Lender's attorney reviews the title inspection, or title report, to verify there are no objections on the Lender's behalf that would affect the closing of the mortgage loan.
8. Closing! Purchaser completes Down Payment, Mortgage Lender ponies up the rest of the cash, and Seller hands over the Deed and the Keys to the House!
9. Purchaser buys steaks for first Barbecue in their own backyard of their own home.
10. 30 years of Fixed Rate bliss because you own a Piece of the Rock!
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
*If you thought my answer was helpful, please give me a "Thumbs Up" or "Best Answer." Thanks!