Sellers of homes offer them for sale in two basic ways, either by owner or through a real estate broker. If a real estate broker is used, the broker charges the seller a commission on the sale price of the home and provides services such as listing the house on the multiple listing service which is available to other real estate brokers, but not the general public. In addition, real estate brokers work with the seller to show the home to prospective buyers and assist the buyer and seller with the signing of a commonly used form of contract.

Prospective purchasers of homes can go to a real estate broker who will assist them in identifying homes, which meet their needs and arrange for them to visit the homes. Typically, real estate brokers assisting the purchasers do not charge the purchasers a fee directly. They share in a portion of the fee charged by the broker who is working with the seller.

Homes being offered for sale by their owners without using real estate brokers are often advertised in the newspaper and with signs in front of the residence indicating that it is for sale by owner. If you are looking at one of those homes, you will need to make contact with the owner, either by telephone or by stopping at the house.

• Signing a Contract
• Form of Ownership
• Applying for a Mortgage
• Homeowners’ Insurance
• The Closing

Signing a Contract
Contracts for the sale of real estate must be in writing in New York. There is a commonly used form in this region, which you can obtain from your real estate broker or your attorney. There are several blanks in the form which will need to be filled in to indicate particular items that are included or excluded in the sale and various dates for completing inspections of the home, obtaining a mortgage and setting a closing date. Typically the contract will have an attorney’s approval clause giving you several days to consult with your attorney about the contract and the transaction. If there are any initial problems, the attorney can help you straighten them out. All owners of the house should sign the contract and all individuals purchasing the house should also sign.

Applying for a Mortgage
If you need to borrow part of the purchase price of your home, you can apply to a bank or other lending institution for a loan. In doing so, you will need to provide the bank with proof of your employment, your salary, your assets and obligations. In addition, the bank will have the home appraised in order to make sure that its value exceeds the amount of the loan. Typically, banks will loan you up to 80% or perhaps more of the purchase price of your home.

In exchange for loaning you the money to purchase the home, the bank will take back a security interest called a mortgage. The mortgage gives the bank permission to sell your home in order to recover its loan if you fail to make your mortgage payments.

In deciding whether to issue you a mortgage, a bank will want to make sure that you will be here to make the payments on the loan. The bank will therefore ask you questions about your visa status, and how long you are authorized to remain in the United States. Since banks do not understand immigration law very well, they may ask for a letter from your immigration lawyer explaining your situation.

Banks also do not loan money to an applicant who is not considered to be a good “credit risk”. The bank determines this by looking at your history of repaying loans or consumer in the past. Typically this information is tracked through your social security number (SSN), which is an informal identifier for many financial transactions. Many foreigners do not have an SSN yet, however, or has had it for such a short time that no meaningful credit history has been reported under the number. In such cases, the applicant for the loan may need to work with their bank overseas to provide other evidence of creditworthiness and past payment history. The bank may also require a larger down-payment on the loan beyond the usual 10-20%, or may assess a higher interest rate to compensate for the perceived risk of selling to an unknown credit risk.

If a bank agrees to loan you the money to purchase your home, it will issue a commitment letter telling you the terms of the loan and the date by which the closing must occur. If you have applied for a loan, but not received a commitment letter, it is very important that you notify the seller in writing before the mortgage contingency in your contract expires.

Homeowners’ Insurance
Your bank will want you to have insurance against damage by fire and other hazards naming you and the bank as insureds. If the home is damaged or destroyed, the bank will be able to recover the amount of its loan from the insurance company. The insurance company will pay you the balance of the policy limit over and above the amount of the loan. You can find a listing of insurance agents in the Yellow Pages of the telephone book.
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The Closing
Prior to the closing date, your attorney and the seller’s attorney will work together to collect the necessary documents, mainly from the seller, and to have the title searched. Once this is done, your closing will be scheduled. You can expect that the closing will be scheduled on very short notice since the banks control the scheduling and have many closings to do. At the closing, the sellers will sign a deed transferring title to the house to you, you will sign a number of documents including a note and mortgage promising to repay the bank the amount of your loan. You will pay the seller the amount of your purchase price using the proceeds of your mortgage and your own funds, which must be in a certified check or a teller’s check which you can obtain from your bank. You will also need a means of photographic identification, such as a driver’s license at the closing. Just prior to the closing, but when you are certain of the closing date, you will need to call the utility company to have electric power and gas service started in your name.

Form of Ownership
Title to the house may be taken by one individual or more than one, most often a husband and wife. If a husband and wife take title together, the form of ownership is called tenancy by the entirety in which each owns title to the whole house and title passes automatically to the survivor if one of them dies. If they divorce, title will be converted to a tenancy in common in which each owns a one-half interest in the house. The interests of tenants in common pass through their individual estates when they die rather than automatically transferring to the other owners. If two unmarried individuals wish to take title together and have it automatically transfer to the survivor when one of them dies, they can take title as joint tenants.