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Are you purchasing property? We recommend working with 3 people:
1. A real estate broker (who offers rebates)
2. A mortgage provider (and willing-lender)
3. A lawyer (who specialises in real estate)
Buyer’s broker - Getting a buyer’s broker is free.
Generally speaking, a seller will pay 5-6% in commission fees, if they have a traditional broker. Keep in mind that real estate is based on a two-agent model with 90% of deals usually executed by a listing agent and a buyer's agent: the seller pays the buyer’s broker 2-3% for bringing the buyer. Though customary in the 5 boroughs, a 6% commission is not a legal mandate. As long as the seller offers a market rate buyer's agent commission, the listing is just like any other full-commission RLS listing.
When a buyer goes to showings without a broker, they interface directly with the seller’s agent. Naturally, the selling team will do what they can to close the deal in favor of their seller, and in-line with the asking price. Getting a buyer's broker is akin to free protection, so tell your buyer to inform the seller’s agent that you represent them. S/he will appreciate knowing the deal is a co-broke, reflecting well on the overall process from day 1.
After the initial offer is made, a counter-offer should be factored-in to the buyer’s game plan to be put into play if need-be. Sellers will keep showing the property till the contract is signed, in an effort to get a backup offer in place. Therefore, buyers should work towards having another acceptance on-hand as well.
Mortgage provider - Before submitting an application, your buyer should:
Check with mortgage providers at several different banks to see if the building is on their approved-list. Finding a lender where this is the case is mandatory, so your buyer doesn’t end up empty-handed.
“Can you pay your mortgage for 24 months if you lost your job?” It’s always wise to consider a different mortgage structure to reduce lower monthly costs.
“Get a pre-approval letter based on your budget, and get approved for the maximum amount the bank will lend you.” Just in case there’s a bidding war and if
faced with one, offer a price that is fair and realistic.
Lawyer
Make sure that a mortgage contingency is written-in to the purchase contract, just in case your client can't get pre-approved. No one wants to lose their deposit. Once the sales contract is fully executed, the buyer has 30 days to get a mortgage commitment letter. If the bank that granted the mortgage pre-approval does not have the co-op on their approved-list, the buyer may not get a mortgage. Banks can consider the building's finances unfavorably. It might also be possible that the bank has underwritten several mortgages for the building in the past, overexposing
them to risk. Or perhaps, the building’s original sponsors own multiple units with multiple mortgages.
In conjunction with a buyer’s agent, clients can receive a 2% closing incentive. On a $1.2M co-op, a $20,000+ concession could be applied towards offsetting your closing costs.
Please check out Hauseit's handy NYC Buyer Closing Cost Calculator in the link below, or send me a private message if you'd like me to walk you through it! Please upvote if you liked my article!
1. A real estate broker (who offers rebates)
2. A mortgage provider (and willing-lender)
3. A lawyer (who specialises in real estate)
Buyer’s broker - Getting a buyer’s broker is free.
Generally speaking, a seller will pay 5-6% in commission fees, if they have a traditional broker. Keep in mind that real estate is based on a two-agent model with 90% of deals usually executed by a listing agent and a buyer's agent: the seller pays the buyer’s broker 2-3% for bringing the buyer. Though customary in the 5 boroughs, a 6% commission is not a legal mandate. As long as the seller offers a market rate buyer's agent commission, the listing is just like any other full-commission RLS listing.
When a buyer goes to showings without a broker, they interface directly with the seller’s agent. Naturally, the selling team will do what they can to close the deal in favor of their seller, and in-line with the asking price. Getting a buyer's broker is akin to free protection, so tell your buyer to inform the seller’s agent that you represent them. S/he will appreciate knowing the deal is a co-broke, reflecting well on the overall process from day 1.
After the initial offer is made, a counter-offer should be factored-in to the buyer’s game plan to be put into play if need-be. Sellers will keep showing the property till the contract is signed, in an effort to get a backup offer in place. Therefore, buyers should work towards having another acceptance on-hand as well.
Mortgage provider - Before submitting an application, your buyer should:
Check with mortgage providers at several different banks to see if the building is on their approved-list. Finding a lender where this is the case is mandatory, so your buyer doesn’t end up empty-handed.
“Can you pay your mortgage for 24 months if you lost your job?” It’s always wise to consider a different mortgage structure to reduce lower monthly costs.
“Get a pre-approval letter based on your budget, and get approved for the maximum amount the bank will lend you.” Just in case there’s a bidding war and if
faced with one, offer a price that is fair and realistic.
Lawyer
Make sure that a mortgage contingency is written-in to the purchase contract, just in case your client can't get pre-approved. No one wants to lose their deposit. Once the sales contract is fully executed, the buyer has 30 days to get a mortgage commitment letter. If the bank that granted the mortgage pre-approval does not have the co-op on their approved-list, the buyer may not get a mortgage. Banks can consider the building's finances unfavorably. It might also be possible that the bank has underwritten several mortgages for the building in the past, overexposing
them to risk. Or perhaps, the building’s original sponsors own multiple units with multiple mortgages.
In conjunction with a buyer’s agent, clients can receive a 2% closing incentive. On a $1.2M co-op, a $20,000+ concession could be applied towards offsetting your closing costs.
Please check out Hauseit's handy NYC Buyer Closing Cost Calculator in the link below, or send me a private message if you'd like me to walk you through it! Please upvote if you liked my article!