Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 05-05-2012, 07:42 AM
 
1,035 posts, read 2,050,404 times
Reputation: 2179

Advertisements

Hey everyone. I'm currently in the middle of trying to buy a home in NY and I'm asking questions here because I want to know if there are any discrepancies between what you strangers tell me, what I've read and learned myself, and what the parties involved tell me. FYI, this is a conventional loan in case that's relevant.

First Question.

Someone said on another forum when answering an unrelated question that "it sounded like the buyer signed a purchase offer binder, which in NY, isn't legally binding, and he would have had to sign an actual purchasing contract". Him saying that this binder thing the buyer signed wasn't an actual contract confused me since what's the point of signing it then? Is it just to let a seller know you're interested in buying a property but it's not an actual valid offer?

The first property I wanted, my agent gave me what he called a binder and it just had basic info on it, like what was my offer and when did I want to close and I signed that. That property fell through on the sellers end.

The second property, my agent didn't give me that same little binder thing. He gave me a long sheet that was more detailed and listed things to check off like mortgage contingencies so I figured this was an ACTUAL offer sheet. So what the heck was that OTHER thing and why would anyone bother with it if it doesn't legally mean anything?

Second Question

Even though this new sheet was longer and more detailed, it still didn't seem like it had room for all of the stuff that I've read online and seen on the tele is supposed to be stipulated in your offer, like what appliances/furniture is going to come with the property, etc.

My question is at what stage do I need to have all of my contractual needs put to paper. In my offer or in whatever the contracts are that I'd be signing at closing? I'm confused about that because on the one hand, people say the offer is something you and your agent handle.

But then when they talk about contingencies and stuff, they say you should be discussing them with your attorney and having him add that into the contract. So should I be writing up my offer with my attorney present or is this contract people are talking about going to be written up AFTER my offer is accepted so my offer doesn't have to list everything?

I guess I'm just confused by the terminology. Once the offer is signed and agreed upon by both parties, it becomes a contract, but is that THE contract that everyone refers to when they say purchasing contract? That's what I need clarified.

Thanks!
Reply With Quote Quick reply to this message

 
Old 05-05-2012, 10:54 AM
 
Location: Tempe, Arizona
4,511 posts, read 13,525,379 times
Reputation: 2200
It may help to specify where in NY you are trying to purchase, as I think the process may vary by location in the state.

Did you ask your agent to clarify the process and the purpose of the documents?
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 02:01 PM
 
936 posts, read 2,193,311 times
Reputation: 938
The first thing I'd do is get a new agent. There's absolutely no reason that there should be any confusion as to what the law is in your area.

I'm in ILL and contract for the sale of real estate need to say "this document is binding" so that it is not confused with any sort of offer type agreement.

It's more common with commercial real estate contracts to have some sort of shorter 'offer' form to initially work out the larger details. They'll then spend the big bucks with their attornies drafting a complex sales contract. But residential real estate contracts can be filled out rather quickly on a computer and there's no need to bypass that process.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 03:27 PM
 
1,035 posts, read 2,050,404 times
Reputation: 2179
Thanks everyone! I've just had a lot of questions come up and the answers the agent is giving me, because I've never done this before, I don't have anything to compare to other than what I've heard and read from other people in the same process.

I did sit down with him again to explain some of my concerns and questions and he was helpful with that but when he says something that isn't in line with what I've heard or read, I don't know where to even go to verify it.

For example, I told him I want an appraisal contingency in the final contract when we get that far since he kept saying he didn't want me to put in the offer I wanted to put in because I'd have to pay the difference if it appraises lower.

I told him I didn't see why that would be a problem if I had a contingency in there giving me a choice if that happens. He said they'd reject my offer if I put something like that in there and I said that's fine because I'd rather they reject my terms and walk away than sign a contract where I'm not protecting myself. He said he's never heard of people adding appraisal contingencies to their contracts.

That seemed weird to me because from my understanding, appraisal contingencies are pretty common. Comments like that make me wonder if it's just that he's had different experiences or if something's going on behind the scenes that I don't know about or what.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 03:44 PM
 
Location: Tempe, Arizona
4,511 posts, read 13,525,379 times
Reputation: 2200
Quote:
Originally Posted by yousah View Post
...It's more common with commercial real estate contracts to have some sort of shorter 'offer' form to initially work out the larger details. They'll then spend the big bucks with their attornies drafting a complex sales contract. But residential real estate contracts can be filled out rather quickly on a computer and there's no need to bypass that process.
My understanding is that in some east coast areas, including NY, it's common in residential sales to have a short form offer agreement written up by the agent pending completion of the primary contract by each sides attorneys.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 03:53 PM
 
Location: Tempe, Arizona
4,511 posts, read 13,525,379 times
Reputation: 2200
Quote:
Originally Posted by cyberphonics View Post
...He said he's never heard of people adding appraisal contingencies to their contracts.

That seemed weird to me because from my understanding, appraisal contingencies are pretty common. Comments like that make me wonder if it's just that he's had different experiences or if something's going on behind the scenes that I don't know about or what.
Yes, appraisal contingencies are common, but there may be various ways of including it depending on common practice in a given location. Is it possible that appraisal contingencies are not included in the initial offer document, but are added later by the attorneys when writing up the final contract?

Perhaps it's just included as part of the over all loan contingency? After all, if the home will not appraise, then your lender won't finance it. I would be concerned if there was language that required you to make up the difference.

Ask your agent what happens in the event the home does not appraise. Also, if you should be asking your attorney these questions if you already have one.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 04:32 PM
 
1,035 posts, read 2,050,404 times
Reputation: 2179
@rjrcm Yep, I have an attorney and I think he'll be the one I'll just address these things to. My offer had a mortgage contingency but I want to be safe and make sure the language is pretty clear about what happens if the reason I don't get financing is specifically due to low appraisal so there's no question about what my rights are.

Right now, there's nothing like that in there.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 05:14 PM
 
936 posts, read 2,193,311 times
Reputation: 938
Your state may be different, but I doubt it.

The appraisal aspect of a contingency is usally covered in the financing contingency. That is, if it underappraises then you'll be unable to obtain financing at the terms you indicated in the contract.

However, some buyers also desire to have a separate appraisal contingency anyway. If that's what you want, and your agents discourages it then it's time for a new agent. I think that's the second time I've said that
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 08:32 PM
 
1,035 posts, read 2,050,404 times
Reputation: 2179
Haha! Thanks Yousah. I brought it up with my agent again. Also asked about how much I'll need to put down upfront in earnest money. I keep reading in articles that earnest money isn't required, but as a show of good faith, it's usually about 1-2% (higher for higher priced homes) and then that can be rolled into your down payment at closing.

We're at $150k. I said I'd do $2k earnest money. I'm putting down $20k so I figured $2k earnest to go into escrow now (to accompany the offer I mean) and the other $18k at closing. My agent said that under no circumstances would any seller take $2k and it has to be at least $5k to go into escrow, that there's no earnest money here, just the amount of my down payment that needs to be put upfront which needs to be high and that anyone who says differently must be from another state.

So I don't know. This is the only place on the market in my budget and has been for over a year and I have to move out by fall so I feel like I have to just go ahead and do it. If anything goes awry, I think I'll definitely be cutting ties with my agent.
Reply With Quote Quick reply to this message
 
Old 05-05-2012, 08:55 PM
 
936 posts, read 2,193,311 times
Reputation: 938
The amount of earnest money is pretty much based upon local tradition, so I can't help you there. But you can at least write the offer up with the amount that you desire to see if you get a counter offer in that area.

The seller has balance their request for more earnest money based upon how well their showings have been going and the likelyhood of getting a better offer. Just remember, if the sellers counter your offer soley because of earnest money then you don't have an accepted contract at that point until, and if, you want to increase that amount. So if you agent was doing there job then they'd remind the seller of that fact and let them know that they may lose the whole deal over one simple point.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top