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BUYER’S GUIDE

In the most desirable location, with the most valuable purchase price, you need a professional on your side.

Domestic Buyer

Buying a home is a major milestone and an exciting experience. With a trusted real estate professional and a strong support team, buyers can make well-informed decisions. Agents guide them through a clear, step-by-step process, offering advice from budgeting to closing and moving in.

International Buyer

Non-U.S. residents, including those in Korea or China, can buy property in the U.S. A purchase agreement and escrow deposit proof are usually required for wire transfers, but policies vary by region and bank. Buyers should consult their banks for details.

BUYING PROCESS

1. Offer and Contract

  1. The offer must include the 13-page standard real estate sales contract and proof of funds or mortgage pre-approval, and must be presented to the seller to be considered as an official offer.
  2. The offer consists of the buyer stating the intention to buy a property from the seller.
  3. The offer outlines conditions such as purchase price offer, method of payment (cash or mortgage), closing date, purchase conditions, etc.
  4. Within 1-3 days of receiving the offer, the seller will decide on one of the following:
    • Accept – Accepts the buyer’s offer and conditions.
    • Deny – Denies the offer, usually when the offered amount is too low.
    • Counter Offer – Presents new purchase price and/or conditions. In this scenario, the buyer must decide to accept, deny, or counteroffer.
    • Highest and Best – When multiple offers are presented, the seller gives a date to all buyers to present their highest offers. The seller then chooses the highest offer. Typically, in this scenario, counteroffers are unavailable.

2. Attorney Review

  1. When the contract is formed, that is, when the seller signs off and sends the contract to the buyer, the process automatically enters the attorney review stage.
  2. The attorneys review all legal details of the contract and mediate between parties until closing.
  3. The attorney review stage takes 3-5 days.
  4. The buyer communicates with the attorney directly regarding the contract.

3. Down Payment

  1. For mortgage purchases, the down payment is usually 20% of the total purchase price. In special circumstances, this amount may be 5%~15%.
  2. FHA Mortgage down payment starts at 3.5%, however, condos must be FHA approved.
  3. The down payment is paid in two parts. The first payment is made within 10 days after the attorney review, and the second payment is made at closing.
  4. If the down payment amount is less than 20% of the total purchase price, the first payment is 50% of the down payment amount, and the rest is paid at closing.
  5. The down payment is made to the escrow account of the seller’s attorney through the buyer’s attorney.
  6. Note: Be wary of escrow account fraud. The buyer should always consult with the buyer’s attorney regarding the transfer.

4. Home Inspection

  1. Within 10 days of the attorney review, a home inspection is carried out.
  2. If the inspection reveals problems with the property, the buyer negotiates repair or credit with the seller.
  3. Normal wear and tear over time do not qualify for negotiations.
  4. Basic inspection consists of Home, Radon and Termite.
  5. Addition inspection (only when necessary) consists of an Oil Tank, Lead Paint, Sewer and Septic System.
  6. If necessary, inspection will also confirm if the Oil Tank is registered with the town hall.

5. Mortgage Process

  1. Once the attorney review is completed, the buyer submits all mortgage-related documents to the mortgage company.
  2. The mortgage company orders an appraisal through a third party.
  3. If the contract price is in line with the appraisal value and the mortgage application is approved, the Mortgage Commitment Letter is issued.
  4. The mortgage company may require a survey (a measurement of boundaries), in which additional costs will occur.
  5. Within 30 days of closing, the mortgage rate can be locked.

6. Title Search

  1. The title search is an investigative process that ensures all conditions are met for a successful property purchase. Conditions include Title, Lien, Tax Lien, Restrictions, Foreclosure History, Liability, Open Permit, Encumbrances, etc.
  2. Once the mortgage commitment letter is received, the buyer’s attorney requests a title search from a title company.
  3. If there is a problem with the title, the seller must resolve the issue, and the buyer must receive a clean title before closing.
  4. Title Insurance is protection against any problems related to the ownership of property. While optional, most mortgage companies require insurance. The cost of insurance is set by the state.
  5. Once the title search is successfully completed, the title company confirms “Clear to Close.” This is the final stage confirming that the process may now enter closing.

7. Certificate of Occupancy (CO or CCO)

  1. CO = Newly built property, CCO = Property changing ownership
  2. In the state of New Jersey, purchase of the property must be filed with the town. The town will then run a safety inspection.
  3. While the safety inspection varies from town to town, most require inspection of the following: 10 Year sealed battery smoke and carbon monoxide detector, fire extinguisher, and miscellaneous safety conditions. For Condos, every unit’s door must close on its own.
  4. The Certificate of Occupancy must be received from the town before closing.
  5. Typically, it is the seller’s responsibility to obtain the Certificate of Occupancy. However, there are special circumstances, such as bank-owned properties or short sales, that require the buyer to receive a certificate of occupancy.

8. Closing Disclosure (CD, ALTA)

  1. Before closing, the buyer receives and reviews the Closing Disclosure from the mortgage company or the title company.
  2. Once the closing disclosure is reviewed, all remaining balances (including the remaining down payment) must be transferred to the title company’s escrow account.
  3. Note: Be wary of escrow account fraud. The buyer should always consult with the buyer’s attorney regarding the transfer.

9. Final Walk Through

  1. Immediately before closing, the buyer inspects the property one final time.
  2. The main purpose is to check for any changes that may have happened between inspection and closing.

10. Closing

  1. Closing is the final stage where not only the buyer and seller meet, but the attorneys, real estate agents, and title company come together to finalize the purchase.
  2. The closing is usually mediated by the title company at the buyer’s attorney’s office.
  3. The buyer arrives 30 minutes early to sign all mortgage documents, typically 100 pages.
  4. The seller hands over all necessary items such as the house key, garage key, locks, passwords, etc. to the buyer.
  5. From forming the contract to closing, the process typically takes 2 months

BUYER’S CLOSING COST

Additional fees when buying a property in New Jersey