Buying or selling a home can be a stressful venture. These residential real estate tips will help you be as prepared as possible.
Q. I am looking to sell my home this year. Where do I start?
A. Do advance legwork before you market your home to avoid surprises that can impact your profit.
- Select a real estate broker. A knowledgeable listing agent will advise you on valuation, give you tips on how to best market your property, and jump in when needed to get the deal closed.
- Test and service major systems before listing your home. Ensure that the electrical, plumbing (including septic and well), and HVAC systems are all in working order. Most buyers will retain a professional home inspector who will point out any areas of concern. This is typically done after a purchase price has been agreed to, but before you enter into a contract of sale. Therefore, the results of the inspection could lead to a reduction in price or costly repairs. Also, buyers will appreciate proof of recent servicing, especially if the home has been vacant or rented. Problems that surface during the buyer’s home inspection can hurt both your profit and your negotiating power.
- Check with your local municipality’s building department to ensure that there are no violations. You want to eliminate any potential surprises that may occur before you accept an offer. Did you add on a deck or put in a half bathroom? If so, did you pull the requisite building permit and obtain a certificate of occupancy for it? Don’t wait until this late stage to find out you were supposed to get the building department’s approval for your home renovation project, or it may cost you.
- Determine your “exit strategy”. Where will you live after your home is sold, and what do you need to do now to get ready? Do you need the proceeds from the sale to make your next purchase? If so, make sure that your broker, attorney and even the buyer is aware of your plan. Your attorney can seek to protect you if one of the deals falls through, or you need more time to coordinate your move. Plan ahead!
- Select and contact a real estate attorney. Your attorney will represent you from negotiating the contract of sale through closing. Even though you have accepted an offer and may have already renegotiated the price following the home inspection, there are more details to work out. A skillful attorney will clearly explain the process, protect your interests, and work towards a fast closing.
Q. I am ready to purchase a new home. What do I need to know?
A. Plan your budget carefully – buying a home costs more than you think!
- Meet with your lender’s mortgage officer to determine what you can afford. They will pre-qualify you for a mortgage and help you understand the process in more detail, including closing costs.
- Work with a real estate broker to help you find your perfect home. In today’s digital marketplace, everyone has access to listed properties. That is why it is important to engage a broker to get you a showing, or to tell you about homes that haven’t yet hit the market. Your agent represents your interests in the purchase negotiation. If you ask the listing agent to show you the home, keep in mind that they are representing the seller.
- Home inspection. After your purchase offer has been accepted, but before you go into contract, hire a reputable home inspector to conduct a thorough inspection. This should uncover any serious issues with the home and provide you with a negotiating tool before you sign a contract.
- Select and contact a real estate attorney. Your attorney will work with the seller’s attorney to negotiate the details of the contract of sale and represent you through closing. They will also retain a reputable title company to conduct a thorough search of the property records to ensure that you are obtaining clean title.
- Payments at contract signing. When you sign the purchase contract, you will need to make a down payment of typically 5%-10% of the purchase price. This down payment is held by the seller’s attorney in escrow until the closing and then applied towards the purchase price.
- Closing costs. If this is your first home-buying experience, you may not be aware that you don’t have access to all of the money you are borrowing. There are some closing costs that are paid out of the loan itself, such as points, lender fees and tax escrows. The lender withholds these costs from the amount of the loan, which means you have to make up for those costs in cash. At closing you will also need to pay title insurance costs, mortgage tax, recording fees and your attorney’s fee. In addition to the purchase price, you also have to reimburse the seller for pre-paid property and school taxes and the value of the heating oil in the tank
No matter where you are in your home buying or selling process, please consider McCabe & Mack LLP for your legal needs. We will represent you from contract negotiation through closing. If you are a purchaser, you may be entitled to a discount if you are borrowing from one of our partner lenders: Hudson Valley Credit Union, KeyBank, or TEG Federal Credit Union.
Our attorneys can assist with all aspects of your real estate transactions, from the sale or purchase of single and multi-family homes to major commercial, institutional and industrial properties.