| Disclaimer: The primary state that this article covers | | | | RealtorÂ(R) or one who valued their license |
| is New Jersey. Though licensed in New Jersey and | | | | would receive any kind of "kick-back" from such a |
| New York, the author will primarily address the buying | | | | party. We are prohibited from doing this. We |
| process as it relates to New Jersey, with the | | | | recommend them because we have established |
| occasional reference to New York. There are many | | | | relationships with them. We understand how they |
| differences from state-to-state. This article is not | | | | work and we know them to be reliable and ethical. |
| intended to take the place of legal representation or | | | | We develop a style and method of working with |
| a qualified RealtorÂ(R). | | | | these people that helps to keep the process moving |
| When you go shopping for a house and begin to | | | | forward. Transactions can fall apart due to simple lack |
| work with a RealtorÂ(R), one of the first | | | | of or mis-communication. |
| questions a good RealtorÂ(R) will ask you is, | | | | Once attorney review is completed, the buyer will |
| "are you pre-approved." At this point I am frequently | | | | frequently have agreed to the payment of a second |
| met with righteous indignation, "my credit is perfect." | | | | deposit. This would have been in the contract. This is |
| What you have to understand is that | | | | not always the case. This usually must be submitted |
| RealtorsÂ(R) dig a lot of empty wells. When a | | | | within a certain number of days of the end of |
| potential buyer comes to us and tells us they want | | | | attorney review. |
| to buy a house, having a pre-approval letter simply | | | | Even experienced real estate investors will rely upon |
| shows the RealtorÂ(R) that the buyer is | | | | the services of a professional home inspector. A |
| serious about their intentions. In addition, before we | | | | home inspector can save you thousands of dollars by |
| can make an offer we have to have that in hand so | | | | pointing out problems or potential problems with a |
| that when we make an offer, we can present the | | | | home. This may involve something as serious as a |
| pre-approval with it. | | | | bad electrical panel or wiring, to as mundane as the |
| The type of relationship you have with your Realtor | | | | grade of the ground around the house. Something to |
| is called an agency relationship. This means that your | | | | remember though, just because the home inspector |
| Realtor has certain fiduciary responsibilities depending | | | | puts it on the report, it doesn't mean you are going |
| upon in what capacity they represent you. The | | | | to get a huge credit from the sellers or that they are |
| Realtor can represent just the buyer (buyer's agent), | | | | going to repair every minor issue. Home inspectors |
| just the seller (seller's agent), or both the buyer and | | | | are paid to find things wrong. Be realistic and realize |
| the seller (disclosed dual agent, not legal in all states | | | | you are buying a used house. Obviously this is |
| but legal in New York and New Jersey.) In New | | | | different for new construction. In New Jersey there |
| Jersey and New York, agents are required to provide | | | | is a 10 year warranty on new houses. |
| prospective customers with a Consumer Information | | | | Once attorney review is over, the buyer's attorney |
| Statement (NJ) or an Agency Disclosure (NY). These | | | | will order a title search and a survey. A title search |
| documents are required to be given to you and the | | | | looks back at the chain of ownership of the home to |
| RealtorÂ(R) must acquire your signature so | | | | make sure that there are not any outstanding liens or |
| that (s)he can prove to the state Real Estate Board | | | | claims on the home (also known as "clouds on the |
| that you were given this pamphlet that describes | | | | title"). The title insurance policy you buy protects |
| these relationships. | | | | your and the bank's ownership of the home in the |
| A good RealtorÂ(R) will be able to enter your | | | | event that something is not found when the title |
| criteria into their local Multiple Listing System (MLS) | | | | search is done. It is as its title implies, insurance. |
| and that system should be able to generate listings | | | | If you are relying upon a mortgage to purchase your |
| on a daily basis based upon your criteria and then | | | | new home, you will have a mortgage commitment |
| email them to you. This method is far preferable to | | | | date in your contract. This is the date when you |
| you going and looking at is a great tool, but its listings | | | | must have your bank's or mortgage rep's |
| can also be a little stale. Things sell and they may | | | | commitment letter. This must be provided to the |
| take a bit of time before they come off of, or are | | | | seller's, their Realtor and their attorney. Before this |
| updated on Make sure you have a computer savvy | | | | can be issued you will need to complete a lengthy |
| RealtorÂ(R). If they are not, find another | | | | application and provide proof of income and assets. |
| RealtorÂ(R). | | | | They will also do a more thorough credit search. |
| After you have found the perfect house your | | | | A bank will also do an appraisal of the house. This |
| RealtorÂ(R) will help you write an offer. In | | | | determines the current market value of the house as |
| New Jersey we do this with form contracts. In New | | | | compared to comparable local sales. The bank wants |
| York we do this with a letter of intent. | | | | to make sure that you (they) are not over paying |
| Once terms have been agreed upon, In New Jersey | | | | for the house. |
| the contract goes into attorney review whereby | | | | The elapsed time from offer to closing can range |
| each side's attorney reviews the contract with their | | | | anywhere from 10 days to 5 or 6 months depending |
| client's interest in mind. In NJ, a contract is not valid | | | | upon the individual situation. Things that can move |
| until both attorneys have made their changes and | | | | very quickly if the buyer doesn't have another house |
| agreed upon everything (in consultation with their | | | | to sell first (a home sale contingency) or if the home |
| respective clients, obviously). In New York, once | | | | they are buying is vacant. |
| terms have been agreed upon, you do a home | | | | Before closing you will do a walk-through of the |
| inspection prior to actually having the attorneys draw | | | | house to ensure that the house is in the same |
| up the contracts. In NJ the home inspection is not | | | | condition as when you originally saw it and that it is |
| done until you get out of attorney review. | | | | being delivered in "broom swept" condition as per the |
| When your Realtor recommends a lawyer or a | | | | contract. You will also want to make sure that they |
| mortgage representative to you, chances are he is | | | | have removed all of their personal belongings from |
| doing it with your best interest at heart. No ethical | | | | the premises, unless otherwise pre-arranged. |