The Process of Buying a Home in the Lower Hudson Valley

If you happen to be relocating from another part of the country, you will find that buying residential real estate in southern New York State is quite different from anywhere else you've been. It will seem like you're on another planet. In other states the real estate agent writes the sales contract using a fill-in-the-blanks style document, and the process speeds along and is done inside of a month. (Actually, now with the new mortgage environment, it takes a bit longer) Here, we use an "attorney process" where every single individual in the process works discreetly and independently of the others, causing untold delays because there are so many opportunities for someone to drop the ball. The REALTOR really gets a workout trying to herd all of the cats in the process through closing 45 to 60 days out. Surprisingly, we do sell properties inside all of this madness as it is a machine that has been running this way probably for a hundred years.

Nonetheless, it is a process where there are steps to follow through to the finish at the closing table.

Mortgage Pre-approval or Proof of Funds

The single-most important thing that you as a buyer need to accomplish early in the process, preferably BEFORE looking at any houses, is to talk to a lender and get yourself pre-approved for a mortgage. This will establish what your price range will be so that time is not wasted in searching for homes at the wrong price. It will also put you into the position where when you find a house you want, you can quickly make an offer a seller will entertain because you have already established your financial readiness. Sellers will not accept an offer from anyone who cannot substantiate that they have the means to pay. Your word alone is not good enough at this point.

It is strongly suggested that you select a mortgage lender who has an office or a real presence in the county you are buying your home. Why? People in the county know how everything works and will tend to communicate with others in the transaction from a level of understanding that will serve to prevent delays or stalls. The City Burroughs are nice places to be from, but their lenders don't cut it in Rockland or Orange County, or vice versa. Like we said, it is a different planet, and the Martians need to speak the lingo of the area.

We are being serious here. Lenders use appraisers, and an out of area lender may select an appraiser who does not understand the area and may not do the appraisal justice. We had a goofball from Rochester, 250 miles away do an appraisal using comps that were out of date and too different to be usable and almost killed a deal. Always use a local lender for peace of mind.

Now, if you are paying cash, the mortgage pre-approval is not needed, but some form of verifiable proof of funds is required to convince the seller you are good to go.

The Search

You'll start on the Internet, looking for the basic criteria you are interested in. At some point you will unfortunately(!) need to contact a Realtor to actually go out and look at the homes themselves. Internet listings of homes and even the over-the-top presentations we make are still not enough: You need to see the house and that is where Realtors come. We hope you call us, of course, but that is your choice entirely.

Depending on what you are looking for, this can take anywhere from one day to several weeks. When we go out, it is usually best to schedule three to five properties, but no more. Unless you are sticking to a single village, things are spread out and rural enough around here to cause driving time between showings to extend the day. Two hours is probably enough time for one gulp of homes before they begin to blend together and you forget the details. If we are good enough to identify the needs and criteria for the search, we should be able to identify the right homes to see for each showing-day.

The Offer

When you find a home you decide to buy, we write up "an offer." This is a very simple single sheet document detailing the basic offer criteria. Price, earnest money at to be supplied at contract, the mortgage amount, and the total cash into the deal. Subject-to's are included such as which equipment is part of the offer agreement, and the engineer's inspection and so on.

There is probably a step or two of counter-offer back-and-forth before there is an agreement. It is worth noting that a counter-offer is a rejection of the previous offer, so in effect there is no offer at any time until both parties agree.

Select an Attorney

At this point you will need to select an attorney to represent you since here in the Lower Hudson Valley we are still using the "attorney process." It is strongly suggested that you select an attorney who has an office in the county you are buying your home. Why? People in the county know how everything works and will tend to communicate with others in the transaction from a level of understanding that will serve to prevent delays or stalls. Like we said with the mortgage guys, the City Burroughs are nice places to be from, but the attorneys there definitely do not cut it in Orange or Rockland County, or vice versa. Like we said, it is a different planet, and the Martians need to speak the lingo of the area. Seriously. Your brother Jake, attorney in Brooklyn, and good as he is, won't have a clue how things work on another planet. This could kill your deal - we have watched it happen more than once.

Another important attorney quality characteristic is whether they have a staff or are they a one person show? You want an office with assistants because if you get the one-man-show variety, and they get a big case in the middle of your deal, guess who gets priority?

Inspection of the home

Once we get the offer accepted, the REALTORS will report the details to the respective attorneys, and the seller's attorney will "draw up contracts" (plural because there are two copies one for the seller, and one for the buyer) and send it off to the buyer's attorney. The seller's attorney will wait on this until after the inspection has taken place.

We will give you the names of three inspectors we have worked with in the past, and you will select one and communicate with them to schedule a date, preferably within seven days or so of the accepted offer. This inspection is part of the buyers discovery process, so this inspection is paid for by the buyer at the time of the inspection. Typically this inspection is for the buyers information only, but if something is found of a safety nature, the seller may feel motivated to fix the condition. However, the inspection should not be thought of as a chance to re-negotiate the price for the property.

The outcome of the inspection is reported to the seller's attorney and buyer's attorney, and the sellers attorney completes the "draw-up" and sends the contracts over to the buyer's attorney. Isn't this just delightful?

The Contract

Once the contracts are signed by both parties, the buyers deliver to their attorney the earnest money for placement in the attorney's escrow account. This money is held and then made available for the transaction at the closing table.

Get the Mortgage going

At this point, the buyer works on getting the mortgage for the purchase. This actually should have begun right after the inspection stage so that by now you have already talked to two or three lenders and have selected the one you plan to go with. Do everything they say, and get every document they ask for using a sense-of-urgency attitude so that things don't drag on. The banks are dragging things on themselves these days as it seems like many backsides are being covered along the way. Often they will ask for the same document again because changes are occurring at these banks, with people moving around and sometimes things get lost. NEVER send an original, and always keep copies of what you sent so you can respond to these silly stuff requests in a timely manner.

ASK if the bank will require a survey for the purchase, and if so, get one ordered, or make sure your attorney gets one ordered right away. They can take several weeks to prepare and if asked for late in the process, it will drag things out to four months, which is not cool. We can provide names of hoop-jumping surveyors if necessary. Isn't this just delightful?

Title search and Municipals - Discovery

This is something that your attorney would prefer to control because it is added income, but we have found that frequently they overlook the timely ordering of this work, which is done by contracted individuals they employ. It is best that you employ the title search company yourself: The one we recommend, Golden Area Abstract, will do the time-critical work early in the process so that if there are any glitches to the title or permits for additions that the seller forgot to get or finish there is plenty of time for them to get it done before closing. Attorneys cannot offer this level of service because they are acting as middlemen and not direct controllers as Golden Area Abstract does. Discovering something at the end of the process that somebody forgot to ask for can add another two-to-four weeks to the closing date. Not cool.

The Walk-Through Inspection

Just before closing the seller will be moving out of the house, and when that is complete, you will need to plan a walk-through inspection to verify that everything was left in good shape. The best time for this is a day or so before the actual closing so that if anything needs to be done, we don't discover it AT the closing table. That would not be cool.

THE CLOSING

The closing table: often there are so many different people at the closing table that the REALTORS get to represent their clients from out in the hallway. Normally everything has been completed properly and there is no real need for the REALTOR, but occasionally stuff happens. The mere fact that there are so many at the table speaks to the silliness of our discreet process - it is quite an effort alone just to get all of those individuals scheduled from the various parts of the county they come from to the table itself. But don't despair, it does get done eventually.

Lots of people, and piles of paper to sign and an hour or two later, and your new home is finally yours. Isn't this just delightful?

Wish it were a little more fun than this, but when you are using an antique process that the legal beagles here in the Lower Hudson Valley don't want to change, that is what we get.