Real Estate Buyer’s Time Line — Start and Focus Your Search
Buyer’s Closing Expenses:
- The largest component of a Buyer’s Closing Expenses are those associated with the Buyer’s Mortgage Financing. Your Lender should be able to estimate those for you.
- In Westchester, Buyers and Sellers use attorneys to negotiate their contracts, do title work and close the transaction. So, the attorney’s fee is another element of Buyer’s Closing Expenses. This cost typically ranges between $1000 and $2000.
- Taxes are the third component of closing costs.
Taxes typically paid by the Buyer are:
Paid to New York State:
The “Mansion Tax” equal to 1% of the total price for a purchase which exceeds $1,000,000.
Paid to Westchester County:
Mortgage Recording Tax of $13 per $1,000 of the mortgage amount (1.3% of the mortgage amount)
Paid to Eastchester/Bronxville/Tuckahoe
Paid to Yonkers:
*Mortgage Recording Tax:
$5 per $1,000 of the Mortgage Amount – in addition to the Westchester
County Tax (0.5% of the Mortgage Amount)
*Yonkers Income Tax: 10% of the New York State Income Tax Amount paid by the Yonkers Resident
Paid to Mt. Vernon:
Pre-Closing Utility Contact Numbers
Before closing, sellers need to transfer utilities out of their name and buyers need to transfer utilities into their name. The following list should expedite doing that:
Electric and Gas:
ConEdison – 1-800-75-ConEd
Cablevision – 1-800-OK-Cable
Verizon – 914-890-1550
Bronxville – United Water – 914-632-6900
Yonkers – City – 914-377-6738 (meter reading)
Mt. Vernon – City – 914-665-2330 (seller must call
Buyer’s Time Line – Start and Focus Your Search
- It is still a Buyer’s Market – Inventory is high in most area markets.
- Mortgage Interest Rates will eventually start to go up. For every 1% increase in the mortgage rate, buying power would erodes by 10%.
- The first step is to get a pre-approval. First, it gives you the best idea of what price range to look in. Second, it “vets” you for the seller. Third, almost no seller will accept a Buyer’s offer without getting a copy of the buyer’s pre-approval. So, if you were to start looking and saw a house you adored and wanted to make an offer on it, you would be stuck without a pre-approval.
- In this area, buyers typically put in 20% or more equity (10% at contract, the rest at closing).
- Buyers are often happiest at or near the top of their price range. Everyone loves a bargain, and there are bargains in today’s market. As a general rule of thumb, however, about 85% of buyers want a home which is already renovated so that they don’t have to lay out the cash and go through the hassle of doing it themselves. The other 15% look for a home they can renovate to their taste. This isn’t about cosmetics — everyone plans to make some cosmetic changes. This is about the big ticket items – typically, kitchen and baths, moving and removing walls and the like. The best bargains in the market today are found in homes needing that kind of renovation. Especially in a buyers’ market, sellers with homes that need renovation know that the majority of buyers aren’t willing to buy — or even look at — their home so, in order to sell, they price accordingly. Their real estate agent will have shown them recent comparable sales, and while the decision about price is ultimately the owner’s, most take what their real estate agent, backed up by data, tells them. In addition, unless a buyer is paying all cash, their lender will order an appraisal and the appraiser sees his job as protecting the bank’s investment, not the buyer. Appraisers these days tend to be conservative. Thus, even where an owner prices high and a buyer is willing to pay near that price, the appraisal acts as a check on their exuberance. Banks will typically lend only 80% of the appraised value, so if the house doesn’t “appraise out” the buyer will have to come up with additional cash — or the price will have to be renegotiated.
- Other Factors to Consider:
- How long a commute are you willing to make?
- Are you looking for a “walk to train” location or are you willing to drive and park. If the latter, you need to know in which towns you can get station parking and which you can’t. If you had to take a jitney bus to the station would you be happy with that? How long your commute will be once you reach Grand Central plays a role in your thoughts on this, too.
- What taxes are you willing to pay? Westchester tends to have high taxes, but often a large percentage of those go to the local school. For example, in Bronxville Village 87 cents out of every tax dollar paid to the Village goes to the school — whose reputation reflects that which, in turn, has created steady demand for housing here ….which in turn is reflected in home prices.
- Some buyers make lists of their “Top 10 Most Important Factors.” Some have even made a grid and rated the home on the factors most important to them as they have visited homes.
- How much land are you looking for? Would you prefer to start small or are you looking for acreage.
- What size house do you want. House size is one of the top influences on taxes…and price. Average house size is probably four bedrooms, thought there are plenty of larger or smaller ones. How long you plan to stay in the house is one consideration. How often you expect to have house guests who stay with you is another. While you don’t want to feel cramped, heating and cleaning costs for space you don’t use can become annoying.
There are plenty of other factors — how much light you want, house style, etc. but most of the time you will want to have visited some houses before you have particular opinions about which factors are most important to you. Because a home is the most expensive single investment most people make, all of these are important and it takes some legwork to begin to sort this out.
Nowadays, most people start their search on the Internet. This gives you some information, but certainly not all that you will need. There is no substitute for actually visiting houses to gain a perspective on the local market and to become familiar with your own likes, dislikes and priorities. And, of course, asking your agent about whatever occurs to you in this regards is enormously helpful.