For the First Time, You Can Watch Our Buying Into Brooklyn Presentation Online
May 03, 2020
Did you miss our recent Buying Into Brooklyn presentation? No worries—you can view the full presentation on our YouTube channel. (Did you know you can also virtually tour homes for sale there too? Check it out.)
Below, you can read up on some of the presentation’s key takeaways. Attendees also received the latest edition of our Homebuyer’s Handbook. It’s packed with all kinds of information we didn’t have enough time to cover about buying in Brooklyn—more than 50 pages worth! If you’d like a copy, email us at: info@realtycollective.com and we will send it your way.
If you have any questions at all, please don’t hesitate to reach out to any of us. You can find all our contact information below. We’d like for you to think of us as a resource and to please know that we are willing to assist you in any way we can.
And if you want to stay in touch, our contact info is below, after the takeaways.
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Real estate overview right now:
Why Buy Now?
- Rent is too damn high—and only going to get higher
- Good investment
- Put your personal touch on a place
- Taxes
- Income
- Stability
- You’ve realized during this pandmeic there’s no other place you’d rather be
The effect of COVID-19 is that it presents a uniquely good opportunity—good deals, low-interest rates, potentially higher approval amounts. Not to mention, we’ve now seen that renters have been left out of options like deferment, while mortgage-holders have seen more relief.
The first step is assembling your team—people who will work together, advocate for you and guide you through this process to do your due diligence to make sure you’re protected and making a sound and informed decision.
- Attorney
- Real estate broker (buyer’s agent)
- Mortgage broker
- Potentially also: contractor, architect, inspector, plenty of lead time to look for your ideal property
Financing and Working with Your Mortgage Broker
In an ideal situation, you’re reaching out to your mortgage broker at the same time as your buyer’s broker because you want to know what you can afford and get pre-approved for before you start looking.
Many different options for financing right now:
- FHA = As little as 3.5% down
- 5%-10%
- 20% and more (this is typically required for co-op as a minimum)
- For a condo or single-family home, you can potentially put down much less and get Private Mortgage Insurance (PMI)
Pre-approval determined by:
- How much you make
- What kind of debt do you carry?
- Credit score
Keep in mind a pre-approval is like a rough draft; its parameters may change during your search. Just stay in touch with your mortgage broker.
COVID Considerations:
- The guidelines for various programs are changing daily
- Create options for yourself (your perfect scenario and backups to accomodate for rapidly changing COVID scenarios; options are your friend!)
- Appraisal process may be delayed right now, though virtual or remote appraisals are happening; this doesn’t work for all purchases; this can hold up the process
- Typically, you would close on a purchase conservatively between 45-60 days; appraisals, inspections, employment confirmations may be getting delayed and this can affect your closing window and rate locks. Once you lock, you have to close by a specific date or pay extension fees, which can be expensive. Workarounds include waiting until those confirmations and appraisal have come in to lock in rate or lock with a pre-established extension window so you don’t have that extension fee
- If between the time you got your commitment and the closing, you lose your job, you are potentially at risk of losing your deposit during this time; it depends on contingency clause inclusion; sellers recognizing the need for funding contingencies based on COVID situation (also seen during the 2009 financial crisis)
- Find out what your turnaround time is with the underwriters to determine how much time will be added to the process; heed deadlines
Once your approval comes in, it’s time to meet all your conditions like insurance, etc so you get your “clear to close.” Next, it’s time to schedule your closing.
Working With an Attorney:
You begin working with your attorney once you’ve found your property, put in your offer and it’s time for contracts.
COVID Effect on Attorney’s Work
Pre-COVID, everything would be done in person. However, since things like inspections can take longer right now, it’s crucial to work with an attorney who will be protecting you as a buyer.
- Right now there are various contingencies that need to be negotiated
- Your mortgage contingency has always been there—30-45 days to get your mortgage. If it didn;t happen during this time, you could get your down payment money back. Now this needs to be negotiated to account for extra time.
- Inspections clauses can stipulate now, for instance, that an inspection may be done after a buyer goes into contract (accounting for COVID delays); if not satisfied, you have a right to cancel a contract
- COVID-19 clause is new: Deadlines must be met (rate lock, closing date, appraisal delays, co-op interview delays, etc) but may have to be negotiated up to 90+ days to protect you in case it gets pushed back beyond your rate loss extension.
- Due diligence may be delayed because atty can’t go into management offices to review documents; more things are now temporarily being done electronically
- Some bigger buildings are not currently allowing move-ins or move-outs or inspectors in; standalone houses may be easier to get an inspection
- Some inspection companies are choosing to not enter buildings to minimize their risk
Normal due diligence on your attorney’s part involves looking at co-op or condo financials and reading board minutes to ensure building has good financials and you won’t have to deal with a reassessment anytime soon.
Closing looks a bit different; standard closing would have 7-10 people around a conference table signing docs. Some banks are also not accepting virtually notarized docs, despite current order that they are legal.
General Advice:
- Treat virtual co-op interviews like in-person interviews and do as much prep as possible; look presentable, know your answers!
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Victoria (Hagman) Alexander
President
Realty Collective LLC
Manzione Real Estate LLC
Vita Realty
351 Van Brunt Street
Brooklyn, NY 11231
ph:(718) 834-1440
fax: 347-412-9878
Rashidah S. Siddiqui, Esq.
Serpico, Serpico & Siddiqui, P.C.
16 Court Street, Suite 2000
Brooklyn, New York 11241
Phone: (718) 875-4003
Fax: (718) 875-4011
Email: rsiddiqui@ssspclaw.com
Lisa Yountchi
Outside Loan Originator,
CrossCountry Mortgage
D: (917) 947-9929
E: Lisayountchi@myccmortgage.com