OFFICIAL x ALEXANDER TEAM
A STEP-BY-STEP GUIDE TO PURCHASING A HOME IN
The Hamptons
THE
1. GETTING PRE-QUALIFIED AND UNDERSTANDING HARD NUMBERS
Before beginning your search, your first step is to get pre-approved for a mortgage loan, unless you are paying cash for the full price of your home, be prepared to show proof of funds. Based on your income and credit history, the mortgage broker will determine how much the bank will lend you, which will help you determine the price range for your search and ultimately, monthly carrying costs and expenses.
SALE CALCULATOR AND CLOSING COSTS
Here is an approximate breakdown based on a sale price of $1,250,000.
Note that some transactions can be structured so that you are including some of the closing costs into the mortgage, rather than paying cash and reducing the amount of cash you would need at closing. Consult with your mortgage banker to discuss this further.
2. ONLINE AND IN-PERSON SEARCH FOR POTENTIAL PROPERTY
There are several websites that showcase houses for sale in the Hamptons including:
• OutEast.com, and Zillow.com
• HamptonsRE
I will also set up an automated search and alert on any properties that you do like to stay up to date with price drops and new properties that come on in areas we are focusing on.
3. FIND A PROPERTY YOU LOVE
Negotiate purchase price based on market comparisons, data, and insight of expenses. This ‘formula’ is determined by pre-approval numbers and estimated monthly carrying costs for the property - and what you’re comfortable with spending.
4. AGREE ON PURCHASE PRICE – PROCEED TO CONTRACT
A ‘Memo of Sale’, - a piece of paper with your info, lawyer’s info and agreed upon purchase price –gets sent to the seller’s lawyer. The seller’s lawyer will reach out to your lawyer directly.
• Home Inspection gets scheduled, and inspection report is provided about 24-48 hours after the inspection happens.
• The Home inspection will provide key details on existing state of the house and anything that needs to be addressed prior to contracts being signed
• Contracts get sent to your lawyer, and you will be able to review everything with them and they make sure that it’s all standard.
5. SIGN CONTRACT AND PUT 10 PERCENT DEPOSIT IN ESCROWONCE
Once everyone has reviewed the contract from your side, you’ll sign and then wire 10-percent into a deposit for down payment.
Typical timeline from Contract to Close About 45 days or less, depending on bank timeline.
During this time frame, the lawyers will move forward with obtaining an updated survey of the property and updated Certificate of Occupancy ensure you’re purchasing a property with no underlying issues.
At close and if you’re financing, you’d pay the additional deposit and with 10 percent in escrow already, you’ll likely provide the additional 10 percent - so, 20 percent cash down total if you’re financing. Typically, LTV, loan to value ratios are approx. 80 -20.
Once we’ve started looking at a few properties, below is a typical timeline and steps towards purchasing a home.
Sale Price $1,250,000 Mansion Tax (1% per 1M) $12,500 Peconic Land Tax (2%) $25,000 Attorney Fee (approx) $5,000 Total Approx. Closing Costs $42,500 20% Down for Mortgage $250,000 Total Cash for Purchase $292,500
MONTHLY MAINTENANCE COSTS
Note the below items are not included in your monthly mortgage payments. Things that would go directly into your mortgage payment including homeowner’s insurance and annual taxes.
• LANDSCAPING: If needed
• INTERNET: Optimum is the only provider out here
• PROPANE: To keep heat on
• Electric / Power: PSEG
• PEST CONTROL: You’re going to want to spray for ticks and keep your house rodent free
• ALARM SYSTEM: Likely already installed, just monthly service fee•Housekeeping: Again, depends on how frequent you need/ want
• GARBAGE: You can pay to have someone separate and remove for you, or you can go to the dump yourself. Very inexpensive for monthly pick up and it’s zero hassle.
• POOL MAINTENANCE : You’ll likely have an annual service contract for open and closing, and then weekly maintenance during the summer.
TheAlexanderTeam.com @AlexanderTeam SOUTH FLORIDA • NEW YORK CITY • THE HAMPTONS 110 FERRY RD, SAG HARBOR, NY 11963 781.799.5686 © 2022 OFFICIAL. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. EQUAL HOUSING OPPORTUNITY.
SARA GOLDFARB Head of Hamptons Sales Lic. R.E. Salesperson M 781.799.5686 | O 631.267.7353 sara.goldfarb@officialpartners.com
This guide is meant to serve as a template and guide for you during an exciting time. As always, I’m here for any questions you have throughout the process