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My realtor said that we have to have 5% in escrow to go to contract, or even make the offer? Is this the law in NY or customary? We are used to putting $5,000 or even, maybe $10,000 ernest money in escrow. The remaining doesn't come due till closing. Is NY that different from most other places? I'm very weary of putting 30,000 in escrow.
In addition, we've been told the the renter pays the realtor fees for the rental in Long Island. Again, we are used to the landlord paying the realtor fee and the renter paying 1st month and a one month security deposit. It's crazy for the rentor to pay the relator fee!
Neither of those things are 'law' in NYS.
You can write anything into a contract and try to get away with it as long as it's not illegal but in the two instances you're talking about, I wouldn't agree to them.
My realtor said that we have to have 5% in escrow to go to contract, or even make the offer? Is this the law in NY or customary? We are used to putting $5,000 or even, maybe $10,000 ernest money in escrow. The remaining doesn't come due till closing. Is NY that different from most other places? I'm very weary of putting 30,000 in escrow.
In addition, we've been told the the renter pays the realtor fees for the rental in Long Island. Again, we are used to the landlord paying the realtor fee and the renter paying 1st month and a one month security deposit. It's crazy for the rentor to pay the relator fee!
So, are both these senarios true in Long Island?
Thanks for your help!
If you are looking to buy a home...most realtors will ask for a good faith deposit...so that when they present your offer to the seller...they will have cash in hand......it looks great for the Real Estate Agent...but do you really want to have 5 - 10 - 20 thousand dollars or more in the hands of someone you really do not know......instead...if you decide you want to make a purchase offer...present your offer to your real estate agent and offer to go direct to contract...after the home inspection......this way...your money will not be tied up for several days to weeks before it is returned to you...and remember...by law...a real estate agent has to present all offers to the seller......
As far as paying the real estate one months rent up first...unfortunately that is true......and has been the custom throughout the state for as long as I can remember....
I don't know about purchasing a home, but I can tell you that it is customary for the renter to pay the broker's fee for an apartment. It is typically equivalent to one month's rent. You also pay the LL one month's rent and then 1 or 2 month's security deposit (depending on the LL) (yes, it's very expensive to move into an apt!!)
Thank you very much for your responses. I think we'll write the $5,000 check and be done with it, if we make the offer. We're serious about making the offer, but I'm not comfortable putting $30,000 in someone else's hands.
Being first time buyers, my wife and I put down 3% at the contract signing. This is an FHA mortgage though. I think it would depend on what type of mortgage you have. I have no idea about the rental fees. Or way you would even need a realtor to find a rental.
Do not confuse a "good faith deposit" with money down at contract. They are two different things and can be a little confusing to people from out of state where things are done differently.
A good faith deposit is where you give a few hundred dollars at the time of the offer so that (in theory) the seller will hold the property off the market until you get into contract. Generally, this is a thing of the past. I haven't seen a good faith deposit taken or given in years.
How much money you put down upon signing the contract is negotiable. The more that you can put down the more likely the seller is to accept your offer, because it makes them feel comfortable that you can get the mortgage. 5% is not really out of line.
Thank you Tom for explaining. Can you explain the timing of all of this to me? I think this is where is gets confusing for me. We make an offer, we negotiate, we agree on a price and terms between us and the seller. We have a home inspection at this time to ensure us that the house is in good working order. They agree to fix stuff that is broken or unsafe, mainly plumbing, electrical, structural. This takes about a week or two. The offer then goes to attornies where it may languish in "attorny land" for up to a month. Once the attornies have earned their money then the contract is signed and we put down 5% until closing, where we put down the remaining funds. Closing occurs at sometime after the attornies have determined that the title is clear and the contract is valid. During this time we also ensure that the bank will really loan us the money, even though we are pre-approved currently.
From our experience, the renter pays the rental fees ; usually one months fee, plus one month security plus the first month rent.
As far as buying a home, we have always put down $5000 as a good faith deposit when the price has been agreed. Then on the contract, we have put down another $5000. The rest is due on closing. The inspection will usually take place within a week or so after you agree on the price. Then it goes to contract ; again another few weeks.
All in all, it takes about 3 months to close on a property in NY.
Good luck
d
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Good Faith to Who??
...it looks great for the Real Estate Agent...but do you really want to have 5 - 10 - 20 thousand dollars or more in the hands of someone you really do not know...
...instead...if you decide you want to make a purchase offer...present your offer to your real estate agent and offer to go direct to contract...after the home inspection...
...this way...your money will not be tied up for several days to weeks before it is returned to you...and remember...by law...a real estate agent has to present all offers to the seller...
...
Offer to closing - timing?
