Benefits Of A Good Real Estate Broker

The best foot forward is to use a knowledgeable real estate broker, experienced both in the area and the product (co-op, condo or home) you wish to purchase or sell. Attempting to sell your own apartment on your own may save you a commission, but will add hours of work, and a good broker may be able to give you a more realistic view of comparable units on the market in your area. Retaining an experienced and knowledgeable broker may provide you with a quicker sale on a competitive basis and allow you to remain as the background buyer or seller, thus having an opportunity to have the last word.

The contract: Once you have decided to sell or buy a property and the price has been agreed upon, you will need a good real estate lawyer to represent you. The seller's attorney prepares the initial contract. Upon delivery of the initial contract to the buyer's attorney, the buyer's attorney will review the contract; do whatever due diligence may be required; add, delete or modify clauses to protect the buyer's interests, including any special provisions should a mortgage be required for the buyer to close; confirm the nature of the mortgage (conventional institutional, FHA, VA or other); and review whatever other conditions are required to protect the purchaser. The seller's attorney will review the changes and if acceptable, the buyer's attorney will provide a copy to the buyer, and if acceptable, have the buyer sign the contract and make the down payment deposit (to be held in escrow pending closing) which is usually 10 percent of the price (this can vary depending on the deal and on the nature of the mortgage financing). The contract must then be sent to the seller's attorney, countersigned by the seller, and the deposit paid into escrow.

The mortgage process: The purchaser may need to obtain a mortgage (this depends on the contract terms) and apply for a mortgage commitment within a specified period of time from the date of the contract. Should the buyer, acting in good faith and in accordance with the contract terms, be unable to obtain such a mortgage on terms set forth in the contract, the seller, upon notice to the purchaser (through their attorneys), may have the right to cancel the contract and obtain a refund of his/her contract deposit. Sometimes, the purchaser may make an application for the mortgage directly with his/her bank or may use the services of a mortgage broker.

Board approval: In a cooperative, the sale is subject to approval by the cooperative corporation's board of directors. Generally, the broker will assist the buyer in putting together a board approval package, which is detailed in an application prepared by the board or its managing agent, and generally includes the contract, the mortgage commitment (co-op loan commitment), financial data for the buyer, letters of reference and other documents the board has set forth. The board may accept or reject the buyer in its sole discretion, except on certain grounds of prejudice. The buyer usually is required to meet the board at an interview. If the board accepts the buyer, the transaction will then move forward. If the board rejects the buyer, the deal will not close and the buyer will be entitled to the return of his/her deposit.

Further steps include a walk-through of the apartment prior to closing to ensure that the premises are in proper condition as per the contract. Thereafter, a full-fledged closing will occur with the buyer, seller, their respective attorneys, the bank lending and the bank being paid off or their representatives, the brokers, and the managing agent. All financial matters will then be adjusted, the closing expenses due from each party collected and the balance of the purchase price paid.