A Step by Step Guide to Buying a Home

Boy, doesn’t HGTV make it all look so easy! Within a half-hour to an hour, you find a home, make an offer, get it accepted, skip the inspection, get a mortgage, close and get the keys. WHEW!

Sorry to tell you, that is NOT reality — at least not in the Five Towns. Since the process is different all over, I thought I would take this chance to explain how the process works on Long Island, from making an offer to closing.

Before you even start your home search, you should speak to a mortgage broker or bank and get a good, solid pre-approval/pre-qualification. This is the only true way to know how much a bank will loan you.

Once you know this, you can start your home search, using this as your basis. It also sets you apart as a serious buyer — offers cannot be presented without a pre-approval (or proof of funds if you are paying cash).

o When you find THE house the first step is to make an offer.

To get an idea of what similar homes in the area have sold for, you can do a search for SOLD homes on Long Island online. An offer is more than just the amount — it also includes the amount of the down payment and your time frame. Remember, this is a starting offer.

The sellers will counter-offer and you will go back and forth until a negotiated price and terms are reached that is acceptable to both sides. Negotiations can take anywhere from hours to days to months — so patience can be a virtue.

o Once your offer is accepted, you will want to get a HOME INSPECTION.

This is to be sure that all systems in the home are working, that the roof is in good shape, that the house is structurally sound, etc. It will also alert you to anything major that you would not notice yourself. The inspection typically takes 1.5 to 4 hours depending on the home size and the inspector.

When you are looking for an inspector to hire, be sure to ask them how they work — some talk to you while they are working and tell you what they are looking at, others don’t tell you anything until after the inspection. Some are old school and some have infrared technologies that can actually look behind walls for heat and moisture. Your agent can give you recommendations, as can your friends.

The inspector will typically give a full report within 48 hours after the inspection.

o You need to retain a real estate attorney.

Once your offer is accepted, the deal goes to the attorneys. Do yourself a favor and be sure to select an attorney that specializes in real estate. Don’t just use Uncle David’s cousin’s friend’s brother in-law because he is family. A real estate attorney will make things smooth all the way through the process. Again, your agent and friends can recommend someone to you.

o  Contract Signing

Your attorney will speak to the seller’s attorney, who will draw up a contract based on mutually agreed upon terms. When all the terms are agreed upon, you will sign the contract and give the agreed upon down payment that will be held in escrow until the closing. After you sign, the sellers will sign, and you are now IN CONTRACT and the house is no longer going to be shown.

o  Mortgage Process

Since you already have your pre-approval, the lender should have most of the information they need. They will ask you for updated info as the process moves along. Among the items they will need are two years of tax returns, bank statements, pay stubs, credit report, etc.

This is the longest part of the process, so be patient. It typically takes three to six weeks to get a mortgage commitment. You can help it along by providing whatever your lender needs in a timely manner.

Something very important to remember during the mortgage process: DO NOT DO ANYTHING TO CHANGE YOUR CREDIT! Do not open new accounts or buy a new car or furniture on your credit card. Just don’t do it! I have seen deals fall apart a few days before closing because the bank ran a new credit report and the debt to income ratio changed because of furniture purchases.

I have made a chart showing the step-by-step guide through the mortgage process. Click here to view and download it.

o Closing Table

This is the FINAL step before the home is yours!

Prior to the closing, be sure to coordinate with the sellers and contact the utility companies and have the services transferred to your name.

The closing table is just what it sounds like — all the parties involved sit around a conference table. The closing is typically attended by the buyer and their attorney, the seller and their attorney, the real estate agents, an attorney for the lender, and the title closer. If all parties have done what they needed to, the closing should go smoothly.

The seller signs a minimal amount of forms necessary for the sale, and the buyer signs a thick stack of papers, mainly consisting of the mortgage documents. The final details are decided, monies change hands and ...

At this point, if everyone agrees that the papers are in order, you are a HOMEOWNER!

If you are looking to buy or sell a home in the Five Towns, we can help! Start here: Five Towns Real Estate Guide

Donna Galinsky – 516-317-9253
Lenny Bobrow – 516-784-0262