A Guide for First Time Homebuyers in Long Island
Buying your first home is an exciting adventure. There are open houses, showings, and late night conversations with loved ones over the many options. Then you find the perfect property, and it is a thrill to make an offer. Whether you fall in love with the first home you see or the thirtieth, the home buying process can also be quite stressful.
Often, the stress for first time homebuyers arises from a lack of familiarity with the real estate process. Negotiating can be difficult, and dealing with sellers, in general, is uncertain territory. First time buyers are usually unaware of their legal rights when purchasing residential property, and unknowingly forego opportunities for inspection or due diligence that are afforded under New York law. However, this doesn’t have to be your experience.
From experience as a Long Island residential real estate attorney, these are the tips, information and recommendations that every first time homebuyer should know.
Have a Lawyer Review Your Contract
Once you find your dream home and the seller accepts your offer, the key to a smooth purchase process is a fair contract. Requirements under New York law necessitate that any contract for the transfer of real property be made in writing. This purchase and sale agreement will set the tone for your inspections, financing, and eventual closing. Therefore, you want it to be right.
The seller will probably request that you use the listing real estate agent’s sale agreement. This saves the seller and listing agent money on legal fees, as the contract will be a form approved by the agent’s employer. Typically, these form agreements aren’t onerous for a buyer, but most real estate agents have separate forms, depending on whether they represent the buyer or seller. The terms in your agreement will be less favorable to a purchaser. As a less informed party to the contract, you really need a lawyer to take a look.
No Two Real Estate Transactions Are the Same
Another reason to carefully review the purchase and sale agreement is that a form document rarely covers every aspect of a transaction. Keep in mind, every piece of real property is unique. From the improvements made upon the land, in terms of a building or other structure, to prior uses for the property, the land you buy in Long Island will have a distinct history. As well, the seller’s preferences and your needs as a buyer aren’t drafted into a form agreement.
A real property lawyer can help you check a contract for the appropriate clauses and information about the property you intend to purchase.
Know Where You Stand with Lenders Before You Sign a Contract
Investment in your first home is a big decision. It not only requires time management and dedication to find the right home in Long Island, but a substantial financial commitment. A purchase and sale agreement should account for the buyer’s financial situation and need for financing from a lender, but it is best to determine your potential for borrowing before you sign any contract. If you need additional time to find a mortgage, make sure the seller is aware and the agreement provides for the right to terminate the contract if financing isn’t secured.
In fact, first time homebuyers put themselves in the best position by determining their lending capacity before they start searching for a home. The interest rate offered by a bank could broaden or restrict your budget. Keep in mind that lenders will want to know your credit score, borrowing history, income, and relationship status. Certain banks or lending institutions will have other questions or requirements.
Take the Opportunity for an Inspection
In the case of real property, it is impossible to judge a house by the outside. It is even impossible to know the condition of a Long Island home by the paint on the walls or finishes in the kitchen. What is under the floors, behind the walls, and beneath the roof all make a huge difference in the property value. Therefore, do not give up your opportunity to learn every detail about the house.
In New York a seller is required to disclose latent damages to a home. If a seller fails to provide the buyer information on conditions, defects, and problems with the property, then the seller might be liable to the buyer later on. This provides the buyer some reassurances that known defects on the property are revealed.
However, the seller only has an obligation to tell the buyer about known defects. There is no additional requirement that a seller seek out unknown problems with the property. Unknown issues are left up to an old New York legal doctrine known as caveat emptor, which means buyer beware. A way to ensure you know all the problems with a property is requiring an inspection as part of your due diligence.
Give Yourself the Right to Walk Away
Due diligence is the period of time between signing a contract and going to closing, when a purchaser is able to inspect a property, look for a mortgage, obtain title insurance, request a survey, or learn other information about the home. But the right to most of these actions during due diligence must be stated in the contract.
Another important part of due diligence is the right to cancel the contract if negative information is discovered about the house. This clause is essential for a buyer that has any concern over the condition of the property or the ability to afford the home. Alternatively, many homebuyers require a reduction of the purchase price if inspection reveals qualities about the home that would drastically affect the property value.
Talk with a Real Property Lawyer
When it comes to buying a home in Long Island, there are many beautiful homes for sale, but the market moves quickly. A first time homebuyer can feel left behind or overwhelmed by the pace of the process. Engaging a real property lawyer can make a huge difference. A residential real property lawyer, such as Sami Perez, has extensive experience representing homebuyers throughout the purchase process. Our legal team will ensure your rights are fully protected and the time between finding a home and closing proceeds smoothly.
To learn more about our residential real estate services, visit the Law Offices of Samilde Perez website or call (631)-594-3077.
The information in this blog post (“Post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this Post should be construed as legal advice from The Law Office of Samilde Perez or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter.