Buying a house help

amother

Yarrow

Sun, Feb 19 2023, 9:00 pm

Idk about current market, we bought a little over a year ago in NJ. It took us about 8 months from when we started looking until we actually closed on our house.

First piece of advice: set expectations low to manage disappointment. There will most likely be some disappointments along the way.

Second piece of advice: realize that everything happens for the best. If a deal falls through, if someone puts in a better offer, anything. If you didn’t get it, it wasn’t meant to be yours and you are better off. We had some really heartbreaking moments and BH because we ended up with our dream home at the end of the day

This is how our process looked and the steps:

1. Reach out to mortgage broker and get pre-approval letter and idea of what rates are, and what you could afford.

2. Start looking at houses. We looked online (Zillow, etc.) constantly looking for new listings, and also worked with a realtor. It took us a few realtor’s until we found one we were really happy with though.

3. Showings/Open houses. If we saw a listing online with an open house, we didn’t even mention it to the realtor, we just went to the open house ourselves. Otherwise the realtor sets up a showing to do a walkthrough of the house with you. Take lots of pictures and take notes of things you like/dislike. After looking at a few houses they all start to blend together and you forget which details belong to which house.

4. Put in an offer. If there’s a house you like, make an official offer as soon as possible. Sometimes the realtor will let you know if there’s a deadline for when they’ll accept offers. Our thought process was not to think what other people would offer, but what the house was worth to us. If we were willing to pay x amount for this house, then that is what we offered. Sometimes that number was exactly the asking price, sometimes it was 300k over. Really depends on each house and every offer could look differently for you.

5. How will you stand out. Offers on a house could get really competitive. We tried to give ourselves an edge with either a competitive money offer, or waiving mortgage/appraisal contingency. Obviously you can only do that if you are in a position to. See end of post for explanation on these contingencies.

6. Accepted offer. Great! But don’t get too excited yet, there’s still so much to be done before it’s a done deal. NY and NJ are very different with contracts, for NJ a basic contract with the offer details gets sent to the seller as your official offer. In NY the realtor just gives the offer, and if accepted then lawyers get to work drawing up official contracts. If you don’t already have a real estate lawyer you know or trust, find one now!

7. Hire an inspector. He will go down there and do a full inspection of the house and send you a detailed report. This will let you know if there are any major or even minor issues with the house. Especially for major issues, definitely negotiate with the sellers to have them either fix or give credit off selling price. Your realtor can advise you with this if any issues do come up in inspection. We paid about $600 for an inspection on an NY house, including a radon test. It took a few days for the report and over a week for radon results.

8. Sign contracts, send deposit. In NY we only mailed the deposit check once the contracts were signed. (For a house that ended up falling through, which is why we bought in NJ). After that, your realtor and lawyer will help guide you through this process at this point, but it was mostly just waiting. It seems like nothing is going on but everyone is busy behind the scenes putting the deal together.

9. Choose a closing date, and apply for a mortgage. With our home we ended up buying, we agreed to sellers request for 30 days to close. So we had 30 days to get approved for the mortgage, and yes it took that long. When it comes to the mortgage, get ready for a lot of headache and stress. The process itself was easy enough and not in itself stressful, just the sheer amount of paperwork needed is exhausting. Our mortgage broker got all of our documents together and sent to the underwriting team, which then asked for a lot more documentation. Once we finally got our approval, we immediately sent copies to our lawyer and realtor. The mortgage company also had an insurance department that handled finding us home insurance. We got amazing rates and actually used this agent for our car and jewelry insurance too! It made it easier because all of that info was automatically put into our file and we didn’t need to handle it separately.

10. Closing day! We met with our lawyer at our house, and spent about an hour or two just signing documents. The mortgage company sent over a lot of documents to e-sign prior to our meeting, and then the lawyer had stacks of papers we needed to physically sign. Before the meeting, we went to the bank to wire out our down payment. Also, the title company was picked and hired by our lawyer. She handled everything on that side of things so all we really needed to take care of was the mortgage.

11. This was specific to us, but we did a leaseback. Some houses we looked at requested one, but this one was for a very extended length of time. We actually got a new lawyer just based on the fact that they had experience with longer leaseback agreements. A leaseback is where after we buy the house, we rent it back to the sellers. It is usually connected to the sale and in the contracts. Ours is a little more complicated since it was over 3 months (which would prevent someone from getting approved for a standard mortgage and require an investment/landlord type of mortgage). Just wanted to add this in case anyone is looking to do this, I have a lot of experience with this and can offer anything information or advice I can give.

For anyone is interested in recommendations for mortgage broker, realtors or lawyers (either NY or NJ), I’m happy to share

Sorry for this long post, hope it helped and hope I didn’t miss anything!

-mortgage contingency is a clause in the contract that will allow you to back out of the deal and receive your deposit back, if the bank does not approve your mortgage. Waiving this right means if it does not get approved, you will continue with your own funds as opposed to the banks loan, or you could back out but would forfeit the deposit (which is usually pretty significant amount). Usually in order to waive this, you would need to show proof of funds to cover the entire home price. We had to send a screenshot of our account to the realtor.

-appraisal contingency is very similar, but refers to the amount the bank is willing give a loan for based on what they feel the house is worth. The bank will send someone to appraise the house and decide the worth, and if that amount meets what loan amount you are applying for then great. But sometimes the house won’t appraise, for example you need 500k loan but the bank only approves 350k because that’s their appraisal amount. Most people don’t have an extra 150k lying around to make up the difference the bank won’t give, so they would be able to back out and get their deposit back. If you waive this contingency, you would essentially agree to pay the difference no matter what, or back out of the contract and lose the deposit.

amother

Mauve

Sun, Feb 19 2023, 9:16 pm

amother Yarrow wrote:

Can I just say thanks? I believe thanks are in order for an incredible post like this. Possibly award winning in terms of its thoroughness and helpfulness within the imamother stratosphere. (And I'm not even in the market for a house).

amother

Ebony

Sun, Feb 19 2023, 9:18 pm

amother Yarrow wrote:

Wow!! Thanks for taking the time to write this out, such useful & helpful information!

amother

Yarrow

Sun, Feb 19 2023, 9:46 pm

amother OP wrote:

What offer to put in? Zillow has the asking price. Do you offer less? How much less?

You’ll have to do some research in the area you’re looking at, or speak to a realtor to get an idea of what your market currently looks like. A year ago, especially because rates were lower, the market was crazy. In our NY neighborhood, all houses were at least 100k over the original asking price. Some much higher than that. In NJ, it depended on the neighborhood and truthfully how Jewish it was played a part. In some areas we had accepted offers that were for the asking price, and some had to be 200k over and still didn’t even get accepted on those. The house we bought we got for 50k above asking. There was actually one house where I put in below asking price, and I was their highest offer. But they decided to withdraw it from the market in the end, so 🤷🏻‍♀️

You’ll definitely have to get an idea of what the market is like right now to see how to price offers and the realtor can give advice with that too. But like I said earlier, the best way to do it is to set your budget for how much you are willing to pay for that specific house and give that amount. If it’s asking, then offer asking. If you would pay 200k over asking and still think it’s worth it, then offer 200k over asking.

You can get an idea of how much houses are listing for and actually selling for on Zillow. Search your specific area and set it to sold houses. When you click on a recently sold house, you can see the amount sold for, and what it was originally listed for under the price history section.

amother

Babypink

Mon, Feb 20 2023, 3:08 pm

We're also looking at houses in Marine Park. We're probably not doing it the right way, but we have our preapproval letter, and dh is currently on his 4th realtor. He's the one who wants to move. I'm fine staying where I am and am aware that we really can't afford to move before the summer, possibly before September. (We have a one year cd that we can't touch until September, and the DOE owes us lots of money for tuition reimbursement, but we don't even have our hearing scheduled yet.)
The first realtor dropped us after determining that we can't afford Flatbush and won't consider East Flatbush. The second realtor dropped us after realizing that I won't consider anything without an eat-in kitchen and near a playground with swings. The third realtor is trying to convince dh to rent an apartment only slightly bigger than what we have now. The fourth realtor is the one who told dh to look at Marine Park instead of Flatbush. He went about it a smart way, by showing dh amazing houses that we can't afford, and slowly moving closer to Marine Park until dh realized that there's a huge price difference between Flatbush and Marine Park.
I have a word document titled houses where I save the pros and cons of each house before dh sees it, so that hopefully he'll stop wasting his time looking at places smaller than my current apartment. (Yes, he did that.) I check streeteasy in addition to zillow. I like that streeteasy has distance to parks and subways since I have an autistic kid who lives in the park, and I use the train to get to and from work.
You and your dh may want to come up with things that you won't compromise on. For me it's playground/park nearby, eat-in kitchen, (I have one now, and it's always filled with cheerios. I can't imagine my entire house being filled with cheerios due to lack of a kitchen table.) and place for kids to play indoors. (I currently don't have that in my apartment, but I have neighbors who love taking my autistic kid to their house for an hour on Shabbos afternoon. If I'm giving that up, I need a good playroom in my house.)