Out with the old and in with the new! Are you ready for something new? Is it your time to buy a house in Brooklyn in 2021?
In light of the pandemic, I think we are all ready for something new. It has been a challenging year.
You have decided you want to purchase a home, what do you do now? Let’s take a look at the steps you need to take to buy a house in Brooklyn in 2021.
Obtain a Pre-Approval
To begin with, you will want to meet with a mortgage lender and obtain a pre-approval for a mortgage loan. The lender will look at your credit report to determine the amount of a mortgage you qualify to borrow. If there are any credit issues, the lender can direct you to a credit repair agency that can help you boost your credit score to be ready to buy a house within a few months.
Having a pre-approval letter before you start looking will help you in several different ways:
- You will know the price range you are most comfortable with and target your monthly payments.
- The seller will require a pre-approval letter to be submitted with your offer so that they know you are qualified to purchase their home before they agree to accept your offer.
- You will not delay submitting your offer by having to obtain your pre-approval after you find the perfect home.
What information do you need to have when contacting a lender for a preapproval?
- Income verification. How you get paid will determine what information you will need to provide the lender.
- W-2 employee – You will need copies of your W-2 forms and your two most recent payroll stubs.
- Self-employed – You will need a year-to-date profit and loss statement and two years of tax records, including 1099s you used to report income. Self-employed includes sole proprietors, partnerships, and S-corporations.
- Assets. You will need to provide bank statements, retirement, and investment account statements.
- Debts. You will need a list of all your monthly payments for student loans, auto loans, personal loans, mortgages, and credit cards.
- Other information. It may be necessary to show any rental income you receive, a divorce decree which would address child support and/or alimony along with property settlements, and down payment gift letters if you will be obtaining your down payment from a parent or family member.
The lender will ask for verification of any other items they may need throughout the process. You must have a paper trail of all sources for the down payment and closing costs. The lender will ask you to provide information on any large deposits found in your bank statements. Above all, if there are any changes in your financial position you will need to discuss those with your lender.
Here is a previous blog post that will answer some of your mortgage questions.
You do not want to delay your offer because you did not have your pre-approval letter. Other buyers will be prepared with their pre-approval letter and submit an offer before you can submit yours. You wouldn’t want to miss out on the perfect home, would you?
Find a Good Real Estate Agent
When you are ready to buy a house in Brooklyn, you need to find the right agent to guide you through the buying process, whether you are a first-time homebuyer, a move-up buyer, or a downsizing buyer.
Interview several agents if you do not know one with a good track record and local reputation.
Questions you may want to ask an agent during an interview include:
- How long have you been an active real estate agent?
- Do you work full-time in your real estate business?
- How many homes do you sell per year?
- How do you stay current on the local real estate market and trends?
- Do you have references available?
- Do I have to sign a contract, and can I cancel if I am not satisfied?
- How do you communicate with your clients and set realistic expectations?
The local real estate market changes frequently, and you need someone in your corner who is knowledgeable and can help you negotiate the best deal possible. You also want a real estate agent who is realistic about the market. Hiring a Buyer’s Agent does not typically cost the buyer, as the seller pays the commission.
A buyer’s agent is responsible for:
- Assessing your needs. The buyer’s agent will ask you for your needs and wants in your new home. Example – you need 3 bedrooms, but you want 4 bedrooms. This specific information will help your agent research properties that will best suit your desires.
- Explaining the buying process. The buying process is complicated. Every home sale is different. An experienced buyer’s agent will be able to handle unique situations to help you buy your Brooklyn home.
- Showing you properties. Your agent will find the properties, make appointments, and walk you through the homes. This is where an experienced local agent is most valuable to help point out the positive features and any potential issues they may see.
- Writing up and submitting your offer. Your buyer’s agent can advise you on pricing and how to structure an appealing offer. They will then submit the offer and communicate with the seller’s agent to begin negotiations.
- Monitoring the closing process. After your offer is accepted, your agent will coordinate with all parties involved until the closing is completed.
Your buyer agent is your advocate. They will answer your questions and guide you through the entire process to help you buy a house in Brooklyn.
A common misconception is that working with the seller’s agent will get you a better deal. The Seller’s agent will be working on the seller’s behalf and is contractually obligated to do so. Do yourself a favor and find the right buyer’s agent.
Narrow Your Search Criteria
You most likely have an idea of where you would like to buy a house in Brooklyn. Maybe you are looking for a particular school or proximity to work. Focus on your top area first, and then move out from there if you can not find the right home.
Make a list of the items that you must have in your new home, and be sure to discuss those items with your real estate agent. Think of the things that would be a “deal-breaker” for you and discuss that with your real estate agent also. The more your agent knows about your needs, the better they can zoom in on the right homes for you. A resourceful real estate agent will be able to guide you to the properties that meet your criteria.
Equally important, you should try to get some input from others who live in the areas you are considering for the pros and cons they can offer. If you don’t know anyone living in the neighborhood, check out some online forums that may be able to provide you insight.
I think it is a good idea to visit the community at different times of the day to get a feel for what is going on in the neighborhood.
Unless you have a thorough knowledge of house construction and components, I do not recommend that you waive the inspections when you buy a house in Brooklyn. Inspections are an important part of the home buying process.
It is important to note that a home inspector is required to be licensed in the State of New York. You can find answers to frequently asked questions about New York licensing for inspectors here.
The seller will disclose what they know about the property. Be that as it may, it isn’t uncommon that the home inspector will find things in the home that the seller didn’t know.
The home inspector will check the major components of the home starting on the outside. They will look at the foundation and the roof for any defects. The inspector then will start their interior inspection in the basement of the home. They will check the electrical, heating, air conditioning, and plumbing systems. The inspector also checks windows, doors, and flooring.
Ask the inspector what they will and will not check before scheduling your inspection with them. Ask the home inspector to take a closer look during the inspection if there is something you noticed during your tour of the home.
You will also want to have a pest inspection to ensure there are no wood-boring insects such as termites that would be causing damage to the home. Some types of financing will require a clear pest inspection report.
When you initially look at a home, you are looking more from an emotional point of view. You are picturing yourself and your family and friends in the spaces. You may not be looking at the home with a critical eye. Having a third party examine the property is valuable to learn if there are any safety or major ticket items that will need to be addressed.
After you have an accepted offer on a home, you will need to make a formal mortgage application. If you are using the same lender who provided you the preapproval, they may have all your information. Notify them when you have an accepted offer on a home and find out what additional information they require.
The process of buying a house in Brooklyn can seem daunting, not to mention confusing. The key to a successful home search and negotiation is to have the right team in your corner. There are many people involved in the purchase of a home. Check out this blog post to learn more about each party.
When you decide you are ready to buy a house in Brooklyn, you will be full of excitement as well as questions. As a Brooklyn real estate agent with over 30 years of experience, I can guide you through the entire journey.
In the event our office is shut down; we are always committed to your safety during the COVID-19 health crisis in compliance with the State of New York public health policies. I can be reached by phone at (718) 253-9500 ext. 1901 or by email at email@example.com.
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