Buyer's Frequently Asked Questions
- Once my offer to purchase a house is accepted, what happens next?
- How much of a deposit should a buyer put down at contract signing?
- Does the deposit check have to be a bank or certified check?
- When should I do an engineers inspection?
- When should I do a termite inspection?
- When will the closing be?
- How much time will I have to obtain my mortgage, and what if I am denied?
- What are my anticipated expenses?
- What about taxes the seller has paid for in advance?
- Where will the closing take place?
- What is the legal fee?
- Can I contact the law office of Michael Croston regarding any questions I have?
A. Once an offer has been accepted by the seller, usually in the form of a written binder prepared by a real estate broker, the seller's attorney would prepare a contract. The contract is forwarded to my office where I would review them to make sure you are legally protected and that it includes all appropriate terms. Once reviewed, I would then meet with you at my office to review all terms with you. After completely reviewing the contract, and making any necessary changes, you would then execute the contract and write out the deposit check. My office would then send the contracts to the seller's attorney for the seller to sign. Once the seller executes and returns the fully signed contract back to my office, your transaction would be deemed to be under contract.
It is customary that between 5% to 10% of the total purchase price is put down on contract signing, depending on the price and the circumstances. In the event that a buyer is obtaining an FHA mortgage, a 3% deposit can be acceptable.
A personal check is all that is generally required for the deposit. However, at closing, any funds brought buy a purchaser must be in the form of a bank or certified check.
If an engineer's inspection is desired by you, the time to perform the inspection would be before you come into my office to sign the contracts. Please note: Upon receiving the engineers report, forward a copy to my office.
Some professional engineers perform a termite inspection with their services, however if this is not done, there is usually a two week time frame in which the inspection must be completed.
The contract will have an on or about date, usually about 60 days from the date the contract was fully executed, though this is negotiable. During this time period you will obtain your mortgage and have a title search performed against the property. Once your mortgage is approved and the title search finalized, a closing is coordinated on a day that is good for all parties. Please note, an on or about closing date gives either party the flexibility of closing within about 30 days of the on or about date stated in the contract.
The customary time period in which to obtain a mortgage is between 30 and 45 days. If needed, a buyer may request an extension of time to obtain the mortgage, but this must be approved by the seller. In the event that your mortgage is denied, most contracts call for the deposit to be returned and the transaction to be cancelled.
At the closing, you should expect to pay the following costs:
- Mortgage costs (which includes points, bank fees, short term interest, escrows, and bank legal fee)
- Title costs (which includes title insurance, recording fees and fees for municipal searches)
- New York State Mortgage Tax-which is approximately .008 percent of your mortgage amount.
- Title closer fee
- Survey (if needed)
- Legal fee
Ask your mortgage representative for a good faith estimate which is a disclosure that a mortgage company must provide which will disclose an approximation of both bank and title costs in advance.
The usual tax adjustment at a closing is to the seller for any taxes that they have paid for in advance from the date of the closing until the end of the tax period. There also can be an adjustment for any oil that is in the tank, if proof is provided at closing.
Assuming you are obtaining financing to purchase the property, the closing would take place at the buyers lending institution (or their attorney). If the property is being purchased without financing, then the closing would customarily be at the seller's attorneys office.
The legal fee that is charged by my office for a residential house closing, which includes preparation of the contract, review of the title, coordinating and appearance at the closing is $1400.00 (payable at time of closing).
At the law offices of Michael J. Croston, anyone is entitled to have a FREE CONSULTATION. Please call 631-474-0900 to schedule yours today.