Overview of Buying a Home From Your Attorney's Perspective

1) Shop for a loan.
To be a smart buyer you need to have a good idea of how much home you can afford. A first step would be to speak with a bank's mortgage department or a mortgage broker and obtain a pre-approval letter. A pre-approval letter is not a "commitment" from the bank to make you a loan but is a letter that states based upon the information you provided them earlier you could qualify for a loan of a certain amount. Of course, any loan would be subject to further conditions such as confirmation of the information you provided, an appraisal of the house, etc.... Your lender will be able to give you a good idea of the price range for a home as well as discuss with you the available mortgage options and programs. My advice is to check with a few lenders since their interest rates and fees do vary. You should also inquire about some of the available grant programs which you may be eligible for.

2) Offer + Acceptance = Contract
With a price range in mind, you can then look for a home either by yourself or with the assistance of a realtor. Realtors can prove invaluable since they have access to the MLS and have the ability to hone your search to homes in a particular price range, type, location, etc... Remember that unless you have a buyer broker agreement the realtor normally represents the interest of the seller. The realtor can assist you in making an "offer to purchase" using an approved form of contract. If you do not have a realtor and you find a home you want to make an offer on you can call me to assist you with the offer. After you make an offer to purchase the seller will review it and may accept it or you may need to "do the dance" and negotiate further with the seller until an offer is accepted. Once an offer to purchase is accepted by the seller you have a legally binding contract. Note pursuant to the Statute of Frauds all contracts for real estate have to be in writing and signed by all parties (buyer and all sellers) and any revisions or modifications likewise have to be in writing and initialed by all. If a realtor is assisting you then you need to forward a copy of the contract to me to review, preferably the same day the seller accepted it. The standard Broome County contract has an attorney review provision which is "time sensitive" so you should not delay or you could possibly be waiving review. I will review the contract with you and will stress the important provisions.

3) Work on your contingencies.
Your contract will undoubtedly contain various contingencies such as financing, inspections, etc... You should forward a complete copy of the contract to your lender and thereafter provided the documentation required by the lender to approve your loan. At this time you will also be hiring a home inspector if you are having inspections done. I suggest, to all my clients, to have a professional home inspection performed. The only exception may be when the buyer actually has a building background - but even then I still advise a professional inspection be performed. The money spent on a home inspection is invaluable especially if items are found and just for plain peace of mind. Note that the standard contract has specific time frames to perform the inspection(s) and to provide the results thereof. As a buyer, you must be vigilant to do everything in a timely manner. If there are issues with the inspections your realtor or I can assist in further negotiations with the seller. This is also the time you should talk to me about the need for a survey of the property.  Depending on the legal description you may need to hire a surveyor to provide a survey.  Surveys do take some time so this determination needs to be done early in the transaction because surveyors' schedules are often booked weeks in advance.  Please see my Common Questions page for a further discussion about surveys.

4) Look into Fire Insurance and Title Insurance.
You should also talk to an insurance agent about fire insurance. Note that you will need a binder and paid receipt for one year of coverage prior to closing and you should review, with your lender, their specific requirements.  Most insurance agents need a start date for the insurance so after a closing date is "actually scheduled" you should attend to paying the yearly premium and provide the binder and paid receipt to me so I can forward to the lender.  The lender needs the premium figure to use in your escrow calculation which needs to be completed by the lender prior to closing.  Providing the insurance in a timely manner will assist in keeping your closing as scheduled.  Without the binder and paid receipt your closing may need to be rescheduled. You can often save money by using the same company for both your auto and fire insurance.  Your lender will usually require a title insurance policy insuring the bank's mortgage against title defects - this is known as a mortgagee policy. With today's litigious society it would be tantamount to malpractice for me not to suggest you also purchase a similar policy against title defects - this is known as a fee policy. Title insurance, unlike fire insurance, is a "one time" payment made at closing. If you purchase the required bank policy and also fee policy you receive a simultaneous discount. Note that your title insurance is normally provided by me and the premium cost is regulated by the New York State Insurance Department. As an agent for Ticor Title Insurance Company, my office will receive a portion of the premium as renumeration. Title insurance is a very complicated decision and can not be completely reviewed in this summary. I have a nice pamphlet from Ticor Title Insurance Company which outlines the benefits of a fee policy. Please contact me and I can forward you a copy.  Also see my Common Questions page for a further discussion about title insurance. Note that your fire/hazard insurance and title insurance should not be confused with Private Mortgage Insurance (PMI) which is sometimes charged by a lender if you do not have a minimum amount of equity.

5) Title review and scheduling closing.
Upon receiving your bank commitment letter you should immediately forward a copy to me since this sets into motion a series of events culminating in your closing. First, the seller's attorney will forward the title work (Abstract) to me and I will review same and prepare the title insurance binder, if required. You should now advise me if you want the additional policy insuring your interest in the house. I will forward the Abstract of Title, tax receipts and certificates and title insurance to the lender. After the lender reviews same and only after all other lender conditions have been met, I will receive a call to schedule your  closing. A closing date will be scheduled taking into account the schedules of the buyer/buyer's attorney, seller/seller's attorney and the lender. Note that the closing date on your contract is normally an "on or about date" and is not carved in stone. Scheduling a closing date/time often requires cooperation by all parties as the seller needs to arrange movers to move out and the buyer to move in. Once a date/time is agreed upon the seller's attorney will prepare a statement of sale and will forward same to me and I will add to it your legal and title insurance cost and forward it to the lender who will add the lender's costs. The lender will then compile all costs on a form called a HUD-1 which will provide an amount you will need to bring to closing. You should be in contact with me so I can provide you with the amount and type of check needed at closing.