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Real Talk with Sterling Real Estate Group is your go-to resource for all things real estate. In our episodes, we break down the latest market trends, share insider tips, and provide expert insights to empower your property journey. Whether you're buying, selling, building, or investing, we're here to help you navigate the dynamic world of real estate in New York's Capital Region and beyond. If you have any questions or topics you’d like us to cover in a future episode, we’d love to hear from you! Reach out to us at info@sterling518.com.
Lisa Licata (00:36)
Hi, and welcome to Real Talk with Sterling Real Estate Group. I'm excited today to have back for a second time, Nicole Pellegrini. Hi. One of our agents here at Sterling Real Estate Group. And if you guys haven't listened to episode 10, go back, take a look. I sat down with Nicole and we started mapping out the basics, one-on-one to home buying. And today, Nicole, right, we're gonna carry that on because we ran out of time. We needed a lot more time for this.
I have a feeling there might be a part three. Because there's a lot that goes into it. There's a lot that goes into it. I, yeah, I mean, I feel like I'm going to try my best to get through it. Absolutely. And in this one episode without skimping out on important information, obviously. you know, yeah, it's, I don't think that the average person realizes really how much goes on behind the scenes to buying a home. There is a lot. So I know we touched base on episode 10, right? Finding a lender.
and getting approved. And we touch base a lot on pre-qualification and pre-approval. So without going so far deep in that because we did cover it on the previous episode, just give a quick what's the difference of both. Right, yeah. So a pre-qualification is essentially just kind of a rough estimate of your numbers, of what you can afford in a home.
And it is helpful if you're just starting out or if you want to buy a home in a few years just to get an idea of where you're at. A pre-approval though, you go through the underwriting process. It's a little bit more of an in-depth, they're pulling your credit, they're evaluating your finances, they're really going in-depth to understand exactly what you can afford. And so having the pre-approval is...
much stronger, it puts you in a much stronger position if you're going to buy. Some listing agents won't even accept an offer if all you have is a pre-qualification. They want to know. If you're in a multiple offer situation and you have a pre-qualification versus a pre-approval, that pre-approval holds a lot more weight. Absolutely. Some of the banks that we work with, when you have a pre-approval, like you said, you have gone all through the underwriting process.
And basically, you will have mortgage commitment within two weeks, dependent on the appraisal. That's how far you've gotten into the process. And most of the time, you can close within 30 days. So pre-approval, definitely much stronger. Yeah, much stronger speeds things up. So I always recommend getting pre-approved if you're seriously thinking about buying a home, especially in the near future. Yeah. And it takes away a lot of the stress.
Right, because now you have a contract and now the bank wants all of these items. Now you can kind of go into it at your own pace, understand what you need, and now it just eliminates all the additional stress that you get when buying a home. A hundred percent. But I know you try to make it as stress-free as possible as you can, there are outside factors that do pop up now and then that we have to navigate. Yeah, yeah.
So yeah, I would say when buying a home, home buying 101, step one, get pre-approved. Absolutely. Good. Yeah. And we touch base, right, for a buyer, with our new, the NAR guidelines that we have to follow. Do you want to touch base a little bit again on the buyer broker compensation agreement? absolutely. So last year, NAR, which is the National Association of Realtors,
passed the new law where we need to have a buyer broker agency agreement in place in order to work with a buyer. The agreement is really just meant to establish transparency and guidelines right up front so that there's no guesswork. Compensation is already outlined. How a realtor gets paid is outlined.
My fiduciary duties to you as the buyer and your responsibilities as the buyer. To you. To me. And so it really just puts all of it right out there, right up front. So there's no guesswork, you know, exactly how I'm going to be able to represent you and essentially what that might, you know, cost in the end. at the end of the day, this is a career. We do want to get paid for our work. Right. And I think there just used to be...
a lack of transparency, a lot of confusion around that. Where's the money going? Who's it going to? Right. Who's paying who? Who's paying who? Right. That gets outlined too. You might not have to actually pay your buyer agent compensation because they might be able to request it or negotiate it from the seller. But just in case the seller is not offering any compensation, you still know right up front what it's going to cost at the end. Exactly. Yeah. And a lot of people...
are not aware that this needs to be signed before you, Nicole, or any agent performs any duties that are real estate related. Setting them up on home searches, even scheduling a showing. This is all in place prior to. And I know we really went in depth, but just as a gentle reminder to everybody, those really need to be in place. They need to be in place. So again, if you want to tour a home,
we're going to sign that agreement before we walk into that home together. If we are actually really working together and I am providing services, guidance, advice, then again, we're going to want that agreement in place and it's required by law. So let's get into the fun stuff. Yeah. The home search. So we've got the pre-approval. We have our
all of our compensation agreements, everything is signed. And we know how much they want to spend or what they can afford. Now what? What's that next step? So the next step is the fun part. I think it's probably the part that most buyers are spending a majority of their time doing, especially if you love looking at houses on Zillow. You know, I fell into that category myself.
So once we know what your numbers are, I like to go into with my buyer, I have a questionnaire and it really breaks it down to what do you want in a home? What do you need in a home? What are your must haves? What are your deal breakers? And it covers everything from number of bedrooms to square footage to acreage to...
towns that you need to live in because you want a short commute to work, you know, school districts for the children. all that stuff. And so you tell me what is it that you're looking for? as you know, and so in addition to you being able to, of course, look on your own on any website, I am going to set up home search alerts for you based on your criteria. And that way you get those as soon as they hit the market.
Sometimes some of the real estate websites take a little bit of time in order to have that information transfer from the MLS to their website. It's immediate pretty much with our searches because we're connected directly to the MLS. And that also helps if a house comes on the market, especially if you're in a competitive market, you're going to want to know. Right away. Right away. Right away.
And Nicole, you know we have some really great tools that we provide for our agents. We do. And I know you take advantage of all of them. My clients love them. Yeah. So not only, you know, it will help a buyer and your client kind of stay off of those third party sites. So they're looking, Zillow, realtor.com, they're all over the place looking. This is very streamlined. Absolutely. You can set it, get notified ASAP.
daily. Something new comes on the market, price adjustment, we're seeing those now, brings it down into the price range, a back on the market. And that could be for many reasons. So many. Inspection issues, the first buyer maybe, I don't know, maybe they couldn't get the mortgage, they couldn't get the mortgage, they've been laid off. There's so many different factors.
So definitely take advantage of those tools. I know when I was out in the field and that checklist that you use is great, we all have that. But it's important for a buyer to understand, don't make it so detailed that you have to have X. Because then you start missing out on properties that maybe say I have to have, I don't know, an in-ground, heated.
salt water pool. Okay, so now we're checking the criteria for that. Let's say there is a in-ground heated salt water pool, but the listing agent by accident maybe forgot to check salt water or forgot to put it there. Now it's not gonna show it's not gonna up. it's important to understand to just give a general. Yes. Minimum three bedrooms, minimum.
two bathrooms, minimum two car garage, minimum full basement and whatever school district you really you're looking to be in. But then I still tell the buyer, now the computer is just gonna pull everything and you may go, what was Nicole thinking sending me this? Yeah. I do try to make sure to explain, you might get some homes that are outliers. You might not like every home that comes up in your search, but we're.
we wanna make sure that the right home does show up. Right, and you don't miss something. You don't miss something. I know, you've been doing this a while. Yeah. As well as I have. I can't give you an exact percentage, but I will tell you, I have sold more homes to buyers for what was not what they were looking for. Because now, right, you walk in. All the time. And I like to tell people, don't say I want X amount of square foot.
because if 1,500 square feet in a ranch lives different than 1,500 square feet in a colonial. Absolutely. Same thing with, know, even just an open floor plan is gonna live a lot larger. Yes. Where if you have all these separate small rooms. So you can have a general idea, but I never have put those into the search. Sometimes I'll do a minimum and that minimum might be a lot lower than what you would think you need.
but it does help weed out. I've had some buyers where in their searches they get a super tiny home that obviously is not gonna work for them. It's a three bedroom, but the bedrooms all fit a twin bed, things like that. So I do still put in usually a minimum parameter if that is important to them. It's not always important to everyone. Right, right. So I mean, there's so many different factors that go into it. I always...
tell my buyers, we really think about the 80, 10, 10 rules. Gotta love 80 % of the house. 10%, you can probably fix. The other 10%, you cannot, you're gonna have to live with that. And a lot of people, when you put the 80, 10, 10, they understand And sometimes that 10 % was, well, I don't really like the pink color in the, okay, that's a very easy fix. But I don't like,
I'm trying to think. I don't like how large the full basement is, because it's really not full. You really can't change that. No. I mean, you can, but it's going to cost a lot of money. Do you want to? Right. Yeah, absolutely. And even to some degree, there are, like you're saying, there are plenty of things that you can change and fix in a home.
that are not that costly or not really that much work. It might seem or feel overwhelming. It's helpful to have a real estate agent on your side who kind of, who actually, who understands, I guess, and who can guide and who can say, I know repainting these rooms is actually gonna brighten up the whole house and I can imagine that you're gonna love it once. Things of that nature. And then we can also connect you to the right people.
to get those things done. Not everything you do has to be DIY. Right. And if you're crafty and handy, which a lot of people are, I know you are. I am. I would call you and, hey, Nicole, can you do my kitchen cabinets for me? I will paint your kitchen cabinets for you. No problem. Swap out hardware, got it. Yeah. And we have a great preferred vendor list and we're always adding people. So I know you and our agents.
You know, they're giving recommendations of, you people that have not only done work for us, but for other clients who've been extremely, extremely happy with. What are some other things, Nicole, in the home search when people look like painting, depending on the size of the house, right? And if you're able to do that on your own, that's not really a big ticket item. No. What are some other things that you think a homeowner may be able to do themselves or?
hire someone at a lower, you know, that wouldn't be real expensive. Yeah, swapping out carpets. Yeah. If you have, you know, the right vendor, the right contractor. I think there's a lot of a lot of cosmetic stuff, really.
When you start getting into some of the bigger ticket items, it can get a little costly. But you'd also be surprised. I had a client, they needed a brand new roof. I found a guy who quoted us $10,000, $12,000 less than the average person in the area. That's a lot of money. That's a lot of money.
when you think, I have to change the roof, that's going to cost me $20,000, it might not, especially depending on the footprint of the house. Right. And you're getting a couple estimates to make sure to everybody on the up and up. Right, absolutely. You want to make sure to shop around, get estimates, figure out who the best person is for the job. You don't need to necessarily just hire the first person you contact. I mean, I'm trying to think of what else could be. I have a good one for you. What?
Knobs on the kitchen cabinets or even the bathroom can change an entire... Yes, changing out the hardware. Knobs and poles on cabinets. Yeah. That's a good one. Yeah. Or even painting. You know if you have an older kitchen, painting the cabinets, changing out the hardware. Yeah. Sometimes if you have, you know, laminate countertops, maybe changing, that gets it.
Now you're starting to get a little bit higher because now if you're doing granite, now you're going from an undermount sink then a drop in. Those all start to add up. But it could be depending on how big. Appliances, you can get some really great appliances secondhand at places like Reshop for the Good. if you move in and you don't like your refrigerator or you don't like your stove, you don't necessarily have to drop a ton of money to upgrade that and to change that.
And always around October, November, I believe a lot of the companies offer rebates as you start getting closer to Christmas. I mean, there's a lot of money to be saved there. So it's, you know, again, working with certain vendors that know, ⁓ they usually drop these rebates around this time. Can you wait? You know, I was fortunate enough when my clients were redoing a kitchen and I had mentioned that and I sent them to the right, to the right vendor.
They were so thankful. They were like, nobody ever mentioned this And they were able to save a lot of money. And that goes back to your buyer broker compensation agreement, because what's your worth? These are things that you're helping a buyer with that may not know, and especially a first time buyer. Yeah, absolutely. Every penny counts. That's what I'm here for. So yeah, as we go from just searching, home search online, to actually touring homes.
You know, these are things that you can think about. These are things that you can look for. And, you you never know. It really sometimes does take just simply walking into a home to know like, this is the place for me. Do you think buyers know when they walk in the front door within the first 10 seconds, this is the home for me? Some do. They really, that happened to one of my buyers. I sent her a home that she was not so sure about.
Aesthetically, it was something that she had kind of written off, but she decided to just go see it anyway. We were on a tight timeline. And it was, I think it was within the first 30 seconds she walked into the house and she's like, this is the one. See? Yeah. Never know. You never know. That's why we don't scrub down that search too far. So Nicole, touring homes. Okay. So now the searches are set up. You've made the appointments to tour homes.
What do you do first? You get out of the car, what do you do with your buyer? So, right, so well, first I wanna say a lot of times if you're scheduling a tour, a private tour, not going to an open house, there might be a 12 or a 24 hour lead time, right? Not every house that comes on the market we can go see that same day. So what I'll do is I'll put in a request to the agent to...
tour the home at our preferred time. Once it's approved, then we meet up at the house. We go see the home. The first thing I do with my buyers is take a quick look around the exterior, the front, just kind of take it in. And then I usually wait to do the full property tour until after. I mean, it depends on the buyer, what's important to them.
So we'll get to the home, we'll go inside and I kind of let my buyers just go in and start to really kind of take it all in on their own. We'll walk through the home together, but I really wanna get to know how you feel about it. What do you like about it? I'll kind of follow you around.
turn on the lights for you, that kind of thing. I will look for certain things that a buyer might not know to look for, maybe under sinks to see if there's any leaks or look at flooring under carpets to see if there's any fading on Hardwood or hardwood underneath the carpet? Hardwood underneath the carpet, if that's possible. Trying to find all the little things that someone might miss upon first
views just to make you aware, not to make you worry, just to make you aware. And so yeah, we'll go through the house room by room, kind of take it all in. We'll go outside, you know, look at the yard, look at the exterior of the home. You know, some of the issues that might come up on an inspection report, which we'll talk about, could be exterior, it could be siding, could be, you know, roof, could be...
gutters, lack of gutters, gutters not draining far enough away from the house. Yeah, exactly. That could cause moisture or pooling in the basement. So yeah, we're looking at what's the layout, what's the flow, is there a lot of natural light, what's the general condition of the home? And we kind of just go through that all together. So one important tip I want to add. Yeah.
We're going into time change. Yeah. Oh gosh, I know. I know. It's important right now when you're looking at homes, you don't want to look at a home five, six o'clock at night. You don't. You're going Sometimes you have to. Yeah. So it's really important to try to get those showings while they're still light or at the very least, you have to go back as soon as you can when there's light. Because there's a lot of things that can be missed that you can't see. Absolutely.
And then, you know, being sensitive to sellers, it takes sellers a lot of time to get their homes ready for a showing. You know, people have families and pets, you know, they've got to coordinate getting everybody out. I like to tell buyers, do a dry buy first before we even set up the showing. That's a great... Because more often, you roll up and the buyer's like, I don't like the area. It's too far from the North Way. It's too far from, you know...
And they don't want to go in. don't even want to go in. And that's not fair to a seller. No. So it's important. I mean, I have done it many times. Yeah. I was like, you know, thank you for suggesting that. You're right. You know, it's too far from where we want to be. Lovely area, but really too far. Yeah. So they didn't waste their time. We certainly didn't waste the seller's time. And we certainly didn't waste, you know, your time. Yeah. Now you're really focused on areas. And the more they do that,
I feel they start to really narrowing in specifically on a good area they wanna be. Right, yeah. If location is really important to you, especially that is a great tip. And even if location is not particularly important because you can live anywhere within a 30 mile radius of a point.
Just getting a feel for the neighborhood, for the house, how close is it to the other house, if that's important to you, how far back from the road is it? Just kind of taking a quick moment just to drive by before submitting that request to tour the home has definitely saved, I know, has saved some of my buyers a ton of time. And then again, you're saving the seller from having to prep their home, leave their home.
It's a lot of work. It's a lot of work. It's a lot of work. And then I also, depending on the home or depending on how many homes we're touring in a day, that's something I do like to do. I like to stack tours if I can, especially if I'm having to drive out to an area that's not necessarily... An hour away. Yeah. An hour there, an hour back. You want to make the best use of your time. So there's five houses within that hour travel. You're going to try to stack those all in one day.
Yeah, so we'll be mindful too of the time that we've allotted. If it's a 30 minute or 45 minute tour, making sure that we're on time and that we're sticking to that time. right. And there's so much in the house tours. So they decide in the house, they want to see. We're going in, we're looking to see if the listing agent has uploaded the property condition disclosure. You're looking at that first and you're going, whoa, hold on a minute.
they're disclosing that they have water in the basement. So your buyer might've said, Nicole, we need a full basement because we need extra space, we have family that stays. Now you can say, I know you love this house, but here's property condition disclosure, they're disclosing there's water in the basement and all of a sudden it's ruled out. So it's really... That happens. Yeah, you would see agent are doing a deep dive in there to see.
what is being disclosed. Yes, if you send me a list of homes as my client, I'm going to go through those homes and do kind of a quick overview, make sure that there wasn't in even just the public description or in the photos that you might have missed that is a deal breaker for you. Right. And
So I'll start there and then like you said, I'll go in, I'll look at the property condition disclosure, any other documents that might be uploaded. And again, looking for what are those deal breakers. And you might send a list of 10 houses that you think you love and by the end of my, you know, my deep dive, you might have three of those that you're still willing to actually see.
So it's an important step that happens behind the scenes. And a lot of people, I shouldn't say people, sometimes that doesn't happen. You have a listing and it's a one car garage and the feedback comes back, right? You're the listing agent. Well, they really wanted a two car garage. Yeah. Okay. So there's a picture. Yeah. There's a one car. It's noted there is one car.
Why are you taking your clients to look at something when they absolutely, they have to have a two car garage. And some buyers, my God, I love that house. Yes. Okay, well Nicole, told me, deal breaker, you have to have a two car garage. This is your 10%. Is this Right, it's only one car. Can you right now live with a one car? Because chances are you may not be able to put on an addition for another garage or there's not enough room for another garage. Nicole, we didn't even.
We didn't even think of that. You're right. don't want to see it. Absolutely. So again, going back to the seller and being conscious of their time. And then once a tour is over, we have feedback requests that come through. Providing the seller with feedback, providing the agent with feedback on their home, whether you loved it, whether you didn't love it, whether something about the home was a deal breaker for you specifically.
That feedback is really helpful to the seller and the listing agent. And so it's really important to me as when I represent buyers to try and get that feedback as quickly as possible. I know sometimes you might need to sit and think about it for a few days and that that's okay. But just know that at the end of the process, once we've toured a home, there's going to be that little piece where we're gonna want.
We're gonna want, and I'm gonna wanna know your feedback too. Because if you decide not to move forward with that home, well what was it that you didn't love? So now you're looking at, yeah, more conscious of what they're looking for. Exactly. And you know, it's funny that you say that because one of our agents today had made a comment like, you know, it's not that hard. It's not that hard. It takes, you know, and that is part of our job. It is, right?
So even though you're representing the buyer, it's part of our job, we're professionals in the business. Hey, Nicole, do you have any interest in this house? You know what, I'm not interested, and they tell you why. Maybe the living area was too small, the bedrooms were too small. It would probably take you 30 seconds, maybe a minute, and just thank you for letting us tour. My clients are not interested in the house.
they felt the bedrooms were too small for what they're looking for. That also, you know, I can't say that's going to help a seller sell their house. You can't change the size of the bedrooms, but it could result if that listing agent is hearing that over and over again, it may result, maybe the price has to be, you know, reduced. I mean, there's just...
So many things that we would have to do like part three of this on feedback. But just buyers letting the agent know just a quick why you don't. Or we're very interested. What I would never do is we're very interested. We're putting in an offer because they may go home and sleep on it and go, we decided not to put in an offer. Now the listing agent has gone to the buyer or the seller and saying, oh, my.
You know, an offer is coming in and it's not a good position for buyer agent, listing agent, you know, having to deliver, you know, those messages. Another thing with buyers that I'm sure has come up, a lot of buyers will walk through and go, my furniture won't fit in here. You know, and you kind of take a deep breath and say, are you buying a house to fit your furniture? Are you buying a house that you're going to stay in?
for the long haul, 5, 10, 15, 20 years. And then that goes in the perspective, you know what, Nicole, you're right. I can sell the furniture and buy new. Yeah, you can. A lot too often they miss on good houses and they circle back and go, you're right. And then the house is already under contract. So remember when you're sleeping on it, somebody's submitting an offer. Absolutely. So kind of take all of that out. All of that out.
You know, if you have to, it's got to be stored in the basement for a little bit until you can afford to buy new. Right. Yeah. And you'd be surprised rooms, especially if the house is vacant, rooms always look smaller unfurnished. It is incredible. Once you actually start to get furniture into a space, how much bigger the room seems. It's a very weird, like, optical illusion. Yeah. But yeah, that, you know, that is something to consider as well.
And tomorrow, we're going to walk through New York. that's right. Right? Yes. And I know that's more new construction. Yes. And we can talk about that on another episode. if you're building new construction, some people cannot visualize. walk through New York, puts everything on a floor, and you can actually walk through and get a good feel for the room size and if you like the flow. I'm really excited for that tomorrow. excited for that. That will be fun. We'll get there early before everyone gets there.
Okay, so we are now down. They found the house that they love. the house they love. What's next? We are going to submit an offer. Yay! Fun times. Yes. So when, you know, when I'm helping you write an offer, obviously I want it to be competitive and to stand out. I don't want you to feel like you are being pressured to overextend yourself or anything like that. But especially if you are in a competitive market, there are
There are plenty of ways to craft a compelling offer that don't necessarily even have to do with price. Your offer terms. The strategies that we all have here. Yeah, so the things that kind of go into writing an offer are price. What is the house listed at? Are you offering asking below, asking above, asking your deposit.
a higher deposit. we refer to that as EMD, The EMD or the money deposit. Exactly. The EMD or the earnest money deposit will be due within usually a few days of your contract being fully executed and accepted. that amount can definitely help persuade a seller in your favor. The terms of how
how quickly can you move through the transaction? Is it going to be a 30-day or 45-day or a 60-day close? That might... It's that pre-approval. The pre-approval or if you're a cash buyer, those are ways to definitely speed that up. Contingencies, that's like your inspection contingency. We have in our market the inspection threshold.
The standard amount on our contracts is $2,000. But you can make that kind of whatever you want. So I never recommend to any buyers to waive inspections. Right. Especially if they're septic, right? Yes. And obviously that is up to you. But what you can do is raise that threshold, meaning that a major repair on the standard contract is anything that's going to cost
$2,000 or more to fix. One item. One item. Not a series of Not a series of items. If you don't care about the little things, you can raise that threshold to $5,000 or $4,000. And what you're saying is that I want this house bad enough that I'm willing to make sure that I'm not nickel and diming during the inspection and negotiation period. So there are, and then again,
All of these terms, I will do my best to help you do what I believe will put you in a strong position, but it's up to you at the end of the day. How much you offer, I wanna offer you as much information as possible so that you are making an informed decision, but at the end of the day, it is up to you. So we're gonna go through when you find the house you love and we're gonna write the best offer we can and you know.
keep our fingers crossed that it gets accepted. It's getting a little easier out there. Yes. I mean, last four years have been a little crazy, but now with interest rates coming down, it's starting to... Yeah. Interest rates are coming down, inventory is going up. It's definitely... We're definitely in a shift. Yeah. Yeah. yeah. Definitely seeing it. Yeah. What else are we missing? So we talk about the EMD, right? when you, Nicole submit the offer right, you're sending, you know...
a copy of the earnest money deposit. So the buyer or the listing agent know you're going to be dropping it off or we can do our earnest money. We're in a, you know, ACH direct transfer. You know, the property condition disclosure is reviewed and signed by the buyer. yes. When we submit the offer, we're also going to be reviewing and submitting the documents that go with the property that includes the property condition disclosure. You know, oftentimes we have
carbon and smoke, which is basically stating that the house has all of the required and working carbon and smoke detectors. There are, I'm like, what are some of the other? Well, you have your property condition, lead paint, if it's built before 1978 disclosure, you're giving the booklet. And then a few companies have affiliation company disclosures, just disclosing, hey, we also own.
And I know a lot of companies, including ourselves, cybersecurity. Cybersecurity. And that's really just educating who we represent on don't click on anything. This is the attorney you're using. This is the phone number I have given you. This is the email. You're going to know your attorney's voice. If you get an email asking for money, the first phone call goes to you. So it's really creating awareness. Yes, safety.
And it's not to scare anybody. I got to tell you, I delete so much and then people call me, did you get my, oh, I thought it was spam, I deleted it. Because I'm scared now to click, you know, you never know. Yeah. reviewing the property condition disclosure, you know, do that. Don't just sign it. Look at it and make sure that you actually know, you know, if there is anything with the home that they're disclosing that you're fully aware of it going into the inspection period.
And something could have been negotiated in the deal. Maybe the seller has said, we have mold. We have an estimate. We're going to give you a credit at closing or towards, those are important things to note. So let's assume, your client got the house. We now have a fully executed contract. You've delivered the earnest money deposit to the listing broker. Now what? So we go into attorney review.
It is very important to have a real estate attorney on your team. They are going to be able to help you understand all of the things, all the contracts and documents that you are signing for what will probably be the biggest purchase of your life. They're going to review the contract and make sure that your interests are protected and that it is actually written in such a way that is aligned with what you're asking for.
We want to make sure that there are no assumptions or misunderstandings about who's giving what or what's happening when. And so during this period, the attorneys are working together with their clients to make sure that everything is aligned. This is usually a three to five day period of time. And so that
is essentially, again, just to make sure that once you actually enter, the attorneys approve the contract and you get ready to move forward, that you're set up for success. Everything is set. Yes. And I want to point out extremely, key point, you said a real estate attorney. Yes. It's important. Yeah. Right? I have a friend who's an attorney. Are they a real estate attorney? No.
I have a family member who's an attorney. Are they a real estate attorney? No. I have an attorney that I use downstate. Yeah. No. Out of state, downstate, well, not It will make the process much more difficult. The way attorneys work here are much different, even when you get to Columbia County. Even when you get to Warren County. And that can make a transaction extremely difficult. Yep.
on all parties. It affects you, the buyer, the listing agent, the seller, the attorneys. I mean, it can really turn into an issue that never needed to happen. So it's really important to pick a local real estate attorney. No matter what agent you're using, we have several recommendations of local attorneys, even banks. A local bank.
And even going into a multiple offer, you know, the listing agent is reviewing with the seller everything. All of that comes into play. So if you have a bank that's not local in this area, maybe that seller has had a bad experience with that bank at one point and go, I want nothing to do with this bank. So that's part of our strategy of trying to use local. And again,
I know you provide three if not more. Yeah. recommend, you know, your clients to definitely shop. Inspection. now, so you've made it through attorney review. it through attorney review. Yay. Right. But important to note, during attorney review, if another offer came in on that property and you haven't made it through attorney review, you could get booted out of the contract because a better offer came in. Yes.
That's not the time there to drag your feet. No. At all. Right. Right. You want to make sure you're moving quickly. Right. Yes. And it's unfortunate, but it happens. It happens, unfortunately. Yeah. Yeah. So let's say that didn't happen. Right. Yay. We're on. We're moving on. We're through attorney review. Now we are entering what we call our inspection contingency period. Typically, when we write the contract, we'll note.
by what date are we going to have inspections done, and then by what date are we going to have been able to get those inspection reports back, review them. So during this, you're always gonna, well I shouldn't say always, I recommend scheduling a general home inspection that's gonna be with someone who is just looking at the home, up, down, in, out, finding,
Any we're looking at are the electrical outlets working? Is the water running at the proper rate? Are there any cracks or bumps or, you know, leaking roof, mold, anything? We're looking for it all. That is, I think, the bare minimum. And now, Nicole, this starts within two weeks. Within two. Yes. So typically this is within two weeks. If you want to move quicker.
You can, but I would say typically within the contracts that I've written, we're saying we're going to have inspections done within seven days of attorney approval or 10 days with an attorney approval. Again, you want to move quickly if you can. And never schedule your inspections until you've made it through attorney review. Until you've made it through attorney review, yes.
So then some of the other inspections you might get in upstate New York, we have wells and septics. So a septic inspection is incredibly important if you are purchasing a home with a septic tank and that's not connected to public sewer. There are radon inspections you can do, which I typically will hand out the radon information early on.
to the buyer so that they're aware of what that is and what that means. If anything comes up in the general inspection that needs a closer look by someone who's an expert in that particular thing, then you have the time, then you can ask for an extension if you need it, if you're not, you know, so that you can start to get a better understanding of what that looks like and what that's going to cost.
The inspector notes, ⁓ the roof is leaking. Bring in a roofer. If the inspector notes something with mold, bring in a mold remediation expert. So it might not just be a one time, one day thing. Depending on what the findings are during the inspection, you might need to go to the house a few times. I do try to stack.
Inspection, septic inspection. If I can. There's a fireplace you want to do a level two You want to do level two chimney inspection. there's a lot of those smaller things outside of just the main general home inspection that you want to consider. So let's assume two things. Easy, you've made it through inspections. We know what the next step, but let's assume something came up. Yes. Everyone's got their estimates. Correct.
Everyone back to negotiating. Everyone has agreed on X. Yes. So now the inspection contingency is removed. Right. And you continue to move forward. What's happening now during this time? So once, so a little bit more into like that kind of back, maybe potential back and forth period. Buyers, we're going to get, we're going to get quotes on how much things might cost to fix.
Sellers also then have the right to get their own quotes. Right. In which they should. In which they should. It's helpful. Everyone charges different rates. It's helpful for every party to be informed. This way too, if you are negotiating concessions or repairs, you'll submit a repair request and say, I want XYZ fixed before we move in, or I want $10,000 credit so that I can fix these things after I move in.
and that negotiation period might take a little back and forth or you might submit it and they'll go, okay. Yeah, yeah, or no. Or no, we're not doing that. But most people, everyone works in good faith. Right, so then after that, you are going to go into appraisal and I have here appraisal and lender underwriting. the home...
appraisal is submitted by the bank that you are working with on your mortgage. So the lender will order the appraisal to confirm the home's value. Essentially, you just want to make sure that the price you're paying is what the home is worth because that is what the mortgage company is telling you that they're going to give you, how much money they're going to give you. Homes may appraise under.
which is obviously falls within that category, it's fine. If the home appraise is over, you are getting into a, you might have to enter another negotiation period, right? You reversed it too. So if it appraises less than the contract price, may have to get back into negotiation. However, though, we have seen,
where buyers say, I want this house, I've been looking for a year, I keep getting bid out, I will cover, so let's say they offer 400,000 and the house is listed for 350,000. They're gonna cover the appraisal gap. The appraisal gap, yes. So if it does not appraise at least the listing price, I will cover the appraisal gap, meaning they've got the funds to cover if it does not appraise. So there's been a lot of that, we've seen the last four.
five years, kind of starting to go away because those multiple offers, there's more inventory hitting the market. they're slowing down. Yes. On the other hand, if a home is listed above its appraised value, then you might need to or want to ask the seller to cover that appraisal gap. So there's, you know, there's, it's a necessary step and I have yet to run into an issue where it's
or run into a transaction where it's been an issue, but it does happen. does happen. Yeah. It does happen. So the bank just wants to confirm, is the house worth what you're buying it for? Because we're giving you the money to buy it. Right. And during all of this time, underwriting the appraisal, it's really a slow period. It can be. You hear nothing really from anybody because now the bank is doing what they have to do.
So you're always wondering what's going on. I haven't heard anything. Everything's being done behind the scenes. Once they order the appraisal, I believe it just goes out to anyone who's in that focuses on that area. And we talked about appraisals in an earlier episode. feel free to go back and check that out as well to learn a little bit more about that. Yeah. The banks, you can no longer pick the appraiser. can't pick the appraiser. It's all computer generated and it gets assigned to...
you know, a local appraisal company. So now, you know, they go in, they get the appraisal, everything's good, and then a mortgage commitment letter, right? So in the contract that you wrote, there's a mortgage contingency. Typically 30 days that you need a mortgage commitment. Correct. If for whatever reason the bank needs an extension, it hasn't come in.
the buyer's attorney will ask for an extension. Typically the seller's agreed. Now if they're asking three, four, five times for an extension, there's some issues at some point. What's going on? Correct. I've run into that myself. So that gets delayed. The commitment letter has been issued. Yeah, the commitment letter has been issued. This is the time where we are...
getting ready to close. During this period of time, if you haven't already, you're going to want to secure homeowners insurance, the attorneys are going to order title, the, you know, and then- Before, before. yes. The commitment letter. Usually- Usually before. After inspections have cleared, depending on the attorney you work with. some order it-
upfront right away, some wait for the inspection. So the attorney's going to order the title, which is nice that you don't have to do that. You just want to make sure that it has a clear title. You might need title insurance. And then any of the other things. Always take title insurance. Well, OK. my. Yeah, attorneys do that. Yeah. The attorneys will talk to the client. They'll figure that out for you. And then you're also going to, during this time, start setting up the things that you're going to need.
for your modern home to function. You need to transfer over power and utilities and internet and anything else, arranging for movers if you want to hire movers and you haven't already. So this is kind of the time to get all of that moving if you haven't already. yep. when the buyer gets the commitment letter.
There's typically conditions. Correct. So, always the one condition will be the insurance binder needs to be paid. Yep. Right. So that's always, and then there could be nothing. Right. There could be more conditions like, you know, we need another pay stub. Right. You know, there's just so many variables that the underwriters find. That should be done very quickly. Yes. Right. Once all those conditions have been met. Yep.
goes back to the underwriter, and then at that point, if all the conditions are met, then the bank issues a clear to close. A clear to close. And it's so important because buyers want to, you know, I need a closing date. Yeah. I have to rearrange the movers. Right. The listing, the sellers, I need a closing date. Yeah. I have to arrange for the movers. Yes. Nobody can give you a closing date.
until that bank issues the clear close, no matter what we do. can beg, we can plead, we can cry. We are not getting it. We can bribe them. We're not getting them. We're not. Yes. So it's move through those conditions. And that's a really important note too, because you don't realize it's not the buyer's fault or it's not the seller's fault that closing has been...
delayed or what have you, or push back a few days. We literally just cannot provide that information until we get that clear to close. And then they wait, what, three days? You can't close for three days. You can't close. cash, much different. Right. And then closing gets scheduled three days or sometimes more, depending on how busy everyone is. Because ideally, you want everyone
to be there and you want everyone to be comfortable with the date. It's not required to show up to closing. You can pre-sign documents with your attorney, but it is really helpful, I think, when everyone's there at the table. Most sellers pre-sign. Most sellers pre-sign, yeah. then, yeah, clear to close. You schedule a closing before...
we go to the closing table, we are going to schedule a final walkthrough. The final walkthrough is typically done within 24 to 48 hours, depending on the day and your schedule. What you're doing is going through and making sure that the home is moving ready, it's been broom swept, it is in the same or better condition.
than from when you put your offer in. The appliances or whatever's written in the contract, if the washer and dryer is included, that is there. A lot of time, this time of year. Usually you'll see the agent will write property to be maintained depending on the season, which means are all the leaves raked. Sometimes sellers will be like, how's this old? I'm not raking the leaves. And you walk up and you're like, oh boy.
you know, that hasn't been done. If it's in the winter, house needs to be maintained. You don't want to roll up and be like, no one has plowed this driveway in three weeks. Or my pipes have burst because the water froze, like, yeah, there's, yeah, absolutely. You want to make sure that you're just adhering to the terms that were, you know, written in the were agreed upon. That were agreed upon. Yeah. So, yeah, that final walkthrough, you know, you're going to confirm if...
If they did agree to make repairs instead of offering concessions, you wanna make sure that those repairs were actually completed. So it's things, looking for all those things before you go to the closing table. Right, right. And you're clear to close. Once you get that, and you were talking about that's when you call into the electric company, or National Grid, or whoever.
spectrum you can usually wait. You may want to get your trash service set up. Obviously your insurance will be paid prior to because that is a condition to get the clear to close. that you need, you know, confirm with the movers, you know, all of that. those three days, most are three, sometimes are five. There's a lot to do. There's a lot to do. And I know you provide a nice
Little checklist, now you got the clear to close. These are things that you need to handle. Whether it be if you have propane, you gotta call into the propane company to get it over to your name. There's so many different things, but we make that part real easy for you. Yeah, absolutely. Yeah, so once you've done the final walkthrough, you've confirmed everything's good, closing is scheduled, then essentially you just get to the closing and...
Sign all of the sign away. Yeah, sign away your life rights now. Sign your signature a hundred times. And then, you know, we didn't really get into closing costs. That's something you do want to take into consideration. I have, you know, buyers paying anywhere between two to five percent of the purchase price for on closing costs. making sure that you have that money set aside or that you've negotiated concessions for it or what have you.
covering lender fees, attorney fees, title fee, appraisal, all those things. And that's given up front early on. That's usually, From your lender. Right. When you kinda, and then you get it again, your closing disclosure statement at the end. once you're getting pre-qualified or pre-approved, your lender is sending all of, so you have a really good idea. Yes. Because the lender will say,
Nicole sent me the tax bills or you've already sent over the tax bills to their lender with the contract and everything. they have all of that. that is we didn't cover that really, but that is also taking place during the process. And all of that gets settled at the closing table. Right. Right. So yeah. So essentially you show up, you know, we require up here within 30 miles. Closing has to be scheduled at a location within 30 miles of the home.
Typically, I am either going to an attorney's office or something like that. bank. an attorney or a title company or a bank. And that's where the closing is taking place. And once everything's signed and good to go, you get the keys and you are officially... And it's transfer of ownership day. Transfer of ownership day. Deed is recorded. You are ready to go, ready to move into your new home.
So one good thing, it's a good point that you brought up and it's gonna go back to having a local attorney. Contracts, 30 mile, have to close within 30 miles of the house you're purchasing. If you have a downstate attorney, they have to drive here. They're gonna charge you for that. So now the deal, you may have gotten a good deal, is no longer. And we have just run into that.
with one of our agents and their attorney has to come here and they are being charged for it. So, you know, at the end they're like, we should have listened to you. Right? You know, when you're like, try to explain these are to explain why. Right. Yeah. So, you know, just things that, you know, keep in mind. If the attorney won't drive here, they have to retain an attorney up here to be present at the closing. Correct. That's not free. No.
So, you know, these are so many different things to consider. But I know, Nicole, you we spend a lot of time. We have great buyer manuals that really take you from A to Z. Absolutely. Whether you're a first time home buyer, even a seasoned home buyer. Even a seasoned home Things have changed a lot. If you haven't bought a home in 10 years, things have changed. And even still, even if things haven't changed, it's nice to have a refresher.
It is. And it's like, you know, for me too, one of the things that I do is of course I'm going to give you the buyer, you know, manual essentially upfront, but I'm going to be there guiding you every step of the way. Anytime something needs to happen, I'm going to be sending you an email or making a phone call and making sure that you know what's coming next. So you never have to, you know, worry about like remembering it all. Right. Right. You're doing it for them. I'm doing it for you. Yes.
And you're right. Yeah. Yeah. And then this episode is obviously going to be a great resource. at the end, you're going to ask your client for a glowing testimonial. Yes. At the end, I'm going to ask you for a testimonial. just, you know, I'm always open to feedback. I want my clients to be honest with me. Of course, I love to believe. And I have received some really glowing testimonials. Of course you have.
you know, it's important in making sure that I'm doing my best for not just you, but for future clients as well. So yeah, I'll ask for a testimonial and then I will continue to talk to you for the rest of your life. Thank you. Some agents just disappear. Oh yeah. Yeah. Yeah. We want our clients to call just because you know, the house is closed.
They may call, Nicole, we want to have some trees taken down. Can you recommend a vendor? Absolutely. Right, you recommend a vendor. What do I tell you guys? Find out when they're going to show up. Get there when they're coming for the estimate. You're there to support your client. Absolutely. They're like, what are you doing here? Well, I recommended so and so. I want to make I want to make sure that you're receiving the highest level of service possible, especially if it's a recommendation from me. And that goes a long way. It does. We're here for you.
All right, Nicole, did we miss anything? I'm sure there was a few little points because there was always things that pop up. Yeah. There's nothing else that we didn't cover that I can think of at the moment. If you're listening and you have any questions, feel free to reach out.
Yeah. we'll put Nicole, if you want to give your contact information and we'll be sure it's also embedded into the show notes. Yeah, absolutely. So you can reach me. My cell phone number is 518-810-3642. You can follow me on Instagram or Facebook. My handle is Nicole unlocks upstate. And I would give my email.
but then I'd have to spell it out and my last name is really long. And so I'll just rely on them to put it in the show notes. Yes, yes. And we definitely will. Nicole, I have to say your Instagram, I love looking at your Instagram. You've got so many different things on there. I'm like, I didn't even know they were in this area because you're all over. that's great.
This is the second time you've been on Real Talk at Sterling Real Estate Group. Thank you so much for having me You're come back for another episode. I enjoy having you here. Thank you so much. It's easy. It's just so easy. I know. So in the meantime, start thinking about your next topic. Okay. And we'll get you back on. Yeah, if you have any ideas, listeners, let me know. Yeah, yeah, certainly, you know, reach out. Reach out to Nicole. She'll do a deep dive into anything, you know, anything you need more information on. Nicole, again, thank you so much. Thank you. It's been a pleasure.
And thank you for tuning in to Real Talk with Sterling Real Estate Group, and we'll talk to you soon. Bye. Bye.