The next step is to submit the REBNY Financial Worksheet, NY State Disclosure and your Mortgage Pre-Approval. Once you find a property you like, your Bizzarro Agency buyer’s agent will make an offer on your behalf.
A pre-approval letter is a must- have in NYC. It provides documentation of how much you have been approved to borrow. This documented evidence shows both real estate agents and sellers that you are serious in your pursuit of a property.
New York State Disclosure Form
New York State law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates.
REBNY Financial Statement
A REBNY financial statement is used by listing agents and sellers to evaluate and compare the financial strength of potential buyers/. The statement itself is effectively a personal ‘balance sheet’ or statement of net worth.
Offers & Negotiations
Typically, the elements of an offer are pretty basic and include, but are not limited to, price, percentage down, expected closing date and whether you are asking for financing and contingencies.
In this ultra-competitive market, buyers need to do all they can to make the strongest offer when the right property becomes available. Buyers may want to consider some of the following tactics to help set their offer apart:
The Quicker, the Better
Show the seller that you are a serious buyer. Put in an offer as fast as possible. It will illustrate to the listing agent that the rest of the transaction will go quickly.
Increase the Down Payment
Sellers may feel a buyer with a higher down payment of 25% – 50% is more qualified than a buyer with a 10% – 20% down payment. Putting more money down will make you a more “attractive” buyer.
Offer Over Asking Price
In this market, sellers often price their homes below market to incite bidding wars. Just remember to draw a line in the sand so that you don’t overextend yourself financially.
Waive the Contingencies
Waiving the mortgage contingency gives the seller confidence that you are fully committed to purchase. Speak to your lender to determine if this course of action is a viable option.
Skip the Mortgage
New data shows that submitting an all-cash offer nearly doubled a buyer’s chances of trumping others in a bidding war. Sellers choose offers that minimize downside risk, like mortgages.
Include a Personal Bio
Cash may be king, but words are pretty powerful, too. One of the most effective ways to win a bidding war is to write the seller a letter. Your words could be enough for the seller to lean your way.
The Accepted Offer
When a seller accepts an offer on an apartment, the verbal acceptance is not legally binding. The accepted offer is contingent on a satisfactory due diligence review by your real estate attorney and successful arbitration by your Bizzarro Agency buyer’s agent. The following process should take five to ten days time. Remember, until the contract is signed by both you and the seller (ie: the contract is fully executed), there are no legal obligations between the parties.
- Conducting Due Diligence – The contract cannot be signed until your real estate attorney has conducted due diligence, thoroughly reviewing the building financials, management, offering plan and the final contract.
- Reviewing Building Financials – Your real estate attorney reviews the financial statements of the co-op or condo to determine its financial condition.
- Management Review – “Minutes” of the co-op or condo board will be reviewed to identify any issues affecting the building or your particular unit and identify any problems that you as a potential buyer should be aware of before signing a contract of sale.
- Offering Plan Review – The offering plan contains an array of information, including floor plans, unit sizes, architect’s reports, calculation of common charges or maintenance, as well as special risks, the current condition of the building, bylaws and house rules.
- Finalizing the Contract – It is essential that you and your attorney work as quickly as possible to finalize and sign a contract of sale with the sellers. This contract will lay out all the terms of the deal such as price, contingencies and closing date.
Once the contract is successfully negotiated and if there are no major issues or problems uncovered in the due diligence investigation, a contract of sale will be signed. This is known as an executed contract. You will then be expected to deliver the initial down payment of the purchase price of the property, which the seller’s attorney will hold in escrow pending closing.