Archive for November, 2009

Definitions: Earnest Money Deposit (EMD)

Monday, November 30th, 2009

Once your offer to purchase a home has been accepted by the Seller, and you’ve completed your Home Inspection, the next step in the process of buying a home is to sit with your attorney to sign the contract of sale.

Signing the contract of sale is the “moment of truth” in that once you sign, you are committed to the purchase transaction. No longer can you change your mind about buying the house; you’re committed all the way through to closing. In New York, when you sit with an attorney to sign the contract you’ll also bring a check payable to the attorney for the Seller. This check is called the “Earnest Money Deposit” also known as the good faith deposit or deposit on contract. Typically the “EMD” is anywhere from 5 to 10% of the agreed upon purchase price for the home, although different purchase transactions call for different deposits. The check you provide—made payable to the attorney for the Seller—is held by that attorney in a non-interest bearing escrow account until the closing day.

In Connecticut, the deposit on contract is made in different stages: typically 1% on signing the binder, then a further balance upon signing contract, and a final escrow deposit once a commitment has been issued by a Lender.

The purpose of these deposits—whether it’s the 1% binder fee in Connecticut, or the EMD in New York—is to demonstrate to the Seller of the house that you are serious about pursuing the purchase of the home. The Seller is committing to sell you the house under the agreed upon terms of the purchase contract—price, condition of house, closing terms, etc.. While the house is under the contract, the Seller is not marketing the house to any other Buyers. The house is effectively “off the market.” This protects you, the Buyer, from losing the house to another Buyer while you are spending money on Home Inspections, attorneys, and working diligently to obtain a mortgage commitment from a Lender. The key here is that you must work diligently with your Lender to obtain the mortgage commitment. You must comply with all Lender requests for documents in a timely manner in order to facilitate your loan approval and ultimately closing. Under the terms of the contract if you do not comply then you may be held in “default” and some or all of your Earnest Money Deposit may be at risk for loss.

If your loan request is denied by the Lender you are entitled to receive your EMD back from the Seller’s attorney with no harm.

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Happy Thanksgiving!!!

Thursday, November 26th, 2009

A day of the year to give Thanks for all you have, all those you know and love, and all you are. A moment of reflection is called for to consider what exactly it is you have to be thankful for.

We’re all so busy running around living the hectic life that we don’t take the time to realize just how wealthy we are in terms of talents, opportunities, friends, family and more. Set aside a few minutes out of your Holiday to make that realization for yourself. You work hard and you deserve the chance to understand how lucky you are and to be thankful for all of that.

On behalf of the entire PHS Family, let me wish you all a very Happy Thanksgiving! We are thankful for the opportunity to work with you to achieve your goals of homeownership and more!

Trevor Curran
Director of Business Development

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Bronx-Living: Peppino’s Pizza

Sunday, November 22nd, 2009

There’s a corner in the Bronx, active with bus and train commuters walking to and fro on their way home or to work or to local shopping, where you’ll find quick, hot and delicious pizza. That corner is
White Plains Road and 241st Street.

We found Peppino’s Pizza quite by necessity. We spend a lot of time “on the road” visiting Real Estate offices, Attorneys and Accountants making old-fashioned sales calls to create relationships for referrals to our rapidly-growing mortgage business. (At PHS, we don’t telemarket people at home while they’re trying to eat dinner or help the kids with the homework; we have more respect for the consumers than that: we get our business mostly from referrals)

When you’re out and about, shuttling from one sales call to another, there comes that time in the afternoon when you realize you actually have to sit down for five minutes and eat something (else you might keel over from hunger!). One of those five minute stops landed us at the corner of White Plains Road and 241st Street (there are several real estate offices in the immediate vicinity). We walked into
Peppino’s Pizza in search of a quick and easy lunch. I’m certain that as we walked in we were all engaged in serious conversation about our sales opportunities so far that day and one or several of us were talking on cellphones, or texting or checking emails on BlackBerries. In short, we were pretty danged busy and focused on work, not food.

All that intense concentration came to a rapid end once we sat down with one of the HUGE pizza slices hot and fresh out of the oven (and I do mean fresh, these guys are turning over fresh pies every few minutes thanks to all the foot traffic on this very busy corner in the Bronx!). WOW! We all looked at each other, put our cellphones and BlackBerries down on the table and immersed ourselves in the best pizza we’d all had in a long time! And again I say, “WOW!”

Yes, we went back up to the counter for seconds (some of us had thirds, too!). The service is quick, courteous (but not overly friendly: these guys are too danged busy to have the time to talk to you about your kid’s graduation with honors from high school!), and very efficient. Usually there are three guys back behind the counter: one pulling the fresh pies out of the oven, the fellow in the middles slinging slices onto paper plates for hungry customers, and the cleanup batter zipping back and forth to bring sodas and fruit drinks to set down beside that hot fresh slice of pizza. What a team! (Oh, this is the Bronx where another TEAM has it’s home, another group of World Champions!)

Visit
Peppino’s today. Whatever it is you’re doing in the neighborhood, get yourself over there for a great slice of pizza. If you’re not in the neighborhood—let’s say you’re in Suffolk County right now—then hop in your car, set your Tom-Tom to that street corner (the zip code is 10470) and make the drive. You’ll be glad you did. You may not want to leave right away as you’ll probably pop back and forth to the counter for second and third slices.

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Definitions: Closing Adjustments

Thursday, November 19th, 2009

When Buyers and Sellers meet at the closing table, certain of the closing costs are called “adjustments.” These are costs wherein a Buyer reimburses the Seller at the closing table for fees advanced by the Seller to the benefit of the Buyer post-closing.

For example: if a house has an oil tank three-quarters filled with oil, the Seller brings to the closing table a reading from the oil company indicating the amount of oil in the tank and the cost of that oil at time of closing. The Buyer reimburses the Seller for the cost of the remaining oil since the Buyer will derive the benefit from the use of that oil after the closing.

Likewise when a Seller has paid the property taxes in advance on a house. A November 18th closing may demonstrate the Seller has paid property taxes through December 31st. Thus the Buyer will reimburse the Seller for those property taxes pro-rated from November 18th through December 31st.

Closing Adjustments are basically “hidden” closing costs since these costs are not disclosed on a Good Faith Estimate of Closing Costs. A Buyer should consult with their attorney for a detailed explanation of expected adjustments. Thus the Buyer can avoid any surprises at the closing table (as too often happens with these adjustments). When a Buyer works with an attorney who specializes in Real Estate, the exposure to such closing surprises is minimized as the attorney typically explains from the outset the expected Closing Adjustments.

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Bronx-Living: A Hidden Gem in New York

Wednesday, November 18th, 2009

Too often, when folks think of The Bronx, they think in negative terms (especially if they’re a fan of that “other” baseball team from Queens!).  Having grown up in Queen, I’m happy to report on my constant—and pleasant—surprise at just how wonderful a place The Bronx is. 

 

So, to start with, wipe out from your mind any negative connotations of The Bronx—especially those images of the burned-out South Bronx of old (and I do mean OLD!  that was the seventies, after all!).

 

Van Cortlandt Park is the grandest of many beautiful green spaces scattered throughout the borough.  For a kid from Queens, one of the first discoveries about the Bronx was the eclectic geography.  Huge glacial boulders can be found in almost all corners of The Bronx.  Nothing is flat: the topography undulates uphill, downhill, then uphill yet again.  You won’t be bored by the sameness of the landscape in The Bronx.

 

It’s easy to get around the Bronx!  Currently I live in New Rochelle, but even from Queens or Manhattan, and Brooklyn, too, it’s easy to arrive in and then navigate around the Bronx.  It’s a pretty big borough, and, yet, whether you’re taking public transportation (which is most excellent) or driving, getting around the Bronx is pretty darned easy to do.  Literally, you can drive from Soundview (down in the South, overlooking Long Island Sound with excellent views of the Manhattan skyline), up to Pelham Parkway (a magnificent tree-lined and leafy wide boulevard running east to west through a diverse range of neighborhoods) in just minutes (less than fifteen, even with traffic).

 

Likewise, you can zip from the West Bronx and “The Heights” and over to New Roc City in downtown New Rochelle for a movie and dinner in less than 20 minutes.   Having spent many years living in Queens, and then Nassau County, I must say, there’s nothing like The Bronx when it comes to quick, and short, commutes from one place to another.

 

The true secret of The Bronx, and the characteristic that qualifies the borough as a hidden gem in the great City of New York, is the housing stock.  WOW.  You can select from single-family Tudor style living on a quiet tree-lined street, to recently-constructed 3 family brick homes (hint: the rental income offsets your mortgage payment in a BIG way) to a bustling neighborhood chock full of great Co-Op, Condo or rental apartments, close-knit community living, and shopping right outside your door.   This, then, is the wonder of Bronx living.   You can really find a home in The Bronx that meets your needs on so many levels: price; cost-of-living; diversity of culture, ethnicity, and cuisine; proximity to business (Manhattan, Queens, and Brooklyn are minutes away) and a truly rich and varied range of housing options.

 

Today’s NYTimes.com features yet another of an ongoing series of glowing reviews of Bronx Living.  You can find the article HERE
 

You won’t know until you try it out for yourself.  This weekend, take a visit to The Bronx: you might find yourself coming HOME there sooner than you think!

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