Bisendra Melaram: [00:00:00] Welcome back to the Keys to the Castle Podcast. I'm your host, Bisendra Melaram, joined by my two fabulous hosts. Mr. J. Marcus of Mr. Marcus's Neighborhood and Mr. Jason Kleiger, Esquire. What's up guys? Bisendra. Extraordinaire. It's 

Jason Kleiger: great being here. 

Bisendra Melaram: Thanks for coming back guys. Today we're going to talk about getting ready to buy your first home.

Or a home in general because all those same rules apply. Right? So as a realtor, a real estate agent, and your friend, I normally, and habitually recommend that all first time homebuyers, or homebuyers in general, get pre approved. People always ask me what's the first step, and that is the first step. You get pre approved, and when I get asked why, I have not found the property that I like yet, I respond with, You have no idea how much house you could afford.

So, that's my number one question ever asked in 21 years of practice. Why? [00:01:00] Mr. Marcus All 

Jason Marcus: starts with preparation You said it best. It's you're going into this especially even if I was when I was buying a car I sat there and it's like, okay How much is my payment gonna be based on this type of car this type of down?

Payment and I wanted to know what I was looking at So that way when I went out there I could find it People that are going out there and looking at houses without knowing their buying capabilities or what that final mortgage payment is going to look like. It's, it's almost like a recipe for disaster in certain cases, especially with this type of market that we're in where you got high prices and high interest rates.

So preparation for this stuff is so crucial and getting ahead of it, to me, is super important. You guys. Probably, or most people probably think it's like, oh, he's a mortgage lender. He wants me to come in, find a house within the first week. He can do the [00:02:00] mortgage and make his money. And like, yeah, that's ideal and awesome.

But at the end of the day, my favorite client is the person who's three, six, nine months out. Because I can break everything down. If I have any sort of issues, let's say if there's credit problems, they don't have enough money saved, they're gonna need gift money, there's so many different pieces to this puzzle that the longer ahead of time that I have to work with it, the better I can structure a plan for somebody and implement that plan to make the transaction so much smoother down the road that I, you can't do this far enough in advance for 

Bisendra Melaram: me.

And I try to tell people that. I tell them. When I don't recommend Mr. Marcus as one of my preferred lenders because I give everyone three choices I just tell them he's my personal banker. He's the best. So I tell people all the time get recommendations of your bank for someone to lend you, you know Who's done a transaction within the last 90 days?

Oh my great grandmother bought a [00:03:00] house five years ago No Find someone else, ask for recommendations and stuff like that, but to Mr. Marcus's point, yes, a thousand percent, it will make your life easier to get pre approved, sit down with a a professional, let them look at all your math, tell you, okay, based on what I'm looking at, this is the best game plan for you, this will make, people don't understand, Jay's doing that and other lenders are doing that to make the process better for them.

But they just seeing it as a I don't know. I don't get too much resistance because I tell him I can't show you anything until you get pre approved. 

Jason Marcus: I think this generation is a little bit more push the button in line with just the way systematically you go about doing these things. We had a lot.

tougher time. And maybe it also has to do with us now that we're getting to the point where we're a little bit older. When I started, I'm 25 years old. I'm talking to, you know, a married couple in their thirties just had a kid and I'm a little kid to them. [00:04:00] Now it's like they look at me and look at us like Oh, we're the older statesman in the professional.

So there's a, there's a piece of that too, this component also, but what you said on an earlier podcast, the confidence also people want to believe and trust in people. And when you're coming across very knowledgeable and we all have this. Intangible ability to create trust early in the process, and people want to attach themselves to that.

So when we're having these discussions, because a lot of times I'll have people, or Other loan officers, real estate agents. It's like, Jay, I'm having a lot of tough times having people accepting running credit reports are doing this analysis. And I sit there and I'm like, I have absolutely no problem with that ever.

And I think it has to do a lot of it with Decreation of trust early in the process, which makes people feel comfortable know that I'm going to be looking at things and doing things in their best interest, [00:05:00] and then they feel confident to allow me to do these things. And I speak with such conviction that they are like, okay, let's do this.

Let's do it the right way. And like, I get my point across. Right. And, 

Bisendra Melaram: so, Mr. Kleiger. Yes. So, do you agree that the first best step in purchasing a home, whether it's first time, second, or third would be getting pre approved to seeing where your, what your purchase capability 

Jason Kleiger: is? One hundred percent. You know, we've had people that come and they, you know, they don't know what they're doing because they did not go ahead and do that.

And like Jay was saying, when they come in and they're unprepared, And they're not counseled, essentially. They don't know what they can afford. They go ahead and they look at House X. And House X costs, you know, a million dollars. And they believe that they can afford that based on what they have in, you know, savings and income.

And they don't realize, let's say, that their credit score. Is awful and doesn't even qualify for, you know, a non [00:06:00] QM or even, or any type of mortgage out there. Mm-Hmm. . And, you know, it, it's a waste of time for them and resources when they could have simply gone to someone like Jay or, or a loan officer, right.

And understand where they stand when it comes to this market too. Because in this. It is so competitive and, and, you know, prices are so high and the rates are high that, that going to someone like Jay you know, would definitely improve their, their chances. And also make them more knowledgeable.

I completely agree looking at it from the attorney 

Bisendra Melaram: side. You know, I didn't even think about that point. Credibility as to who you put on your team as a buyer. It actually speaks volumes when the, when your offer goes across the table. Right? Because it's when, if you're a buyer and you make an offer on to purchase a property and the agent interpreting the information for the seller, because that's normally what happens, right?

Their agent, [00:07:00] they selected will explain to them all the information in front of them. And one of them being, cause it's normal to ask what bank is that? Especially if they've never heard of it, right? So it's that other agent's responsibility, not really responsibility, but normally what happens is that agent will educate them.

So what happens to the benefit of the buyer making the offer is that, oh yeah, that's a good bank, right? Because the average seller doesn't know. They only know the big three, big four banks, and that's it. And I tell people all the time. That's not your best option And they ask me why and I tell them Because that a mortgage is a loan product Like if you went to the store and you saw an aisle of toothpaste It's all the same Ultimately, I don't want the toothpaste people to come Right ultimately Ultimately, it's the same but it's different [00:08:00] Right?

And everyone has their preference, right? But you feel secure anywhere if you know that you're gonna If you buy Colgate or you buy Crest, you know you're getting the product you're expecting. Right? Right. So if you're coming with, and I'm not knocking mortgage brokers, right? But I advocate for a loan officer for a banker.

Because you know there's security in it because they're lending you their own money. So we won't, I won't go too far into that. So getting pre approved up front with a reputable lender works to the benefit of the buyer. 

Jason Marcus: Can I tell you my favorite thing in the transaction? What happens? And this to me is just phenomenal.

And you kind of touched on it, but I'm going to elaborate on it. I love, love, love, love getting the phone call from the listing agent. So, when my pre approval letter crosses the desk of that listing agent, and that listing agent is going to present to the seller, and hopefully [00:09:00] take my buyer's offer, or our buyer's offer a lot of times the differentiating factor is the phone call coming to the lender.

So, I'll get these phone calls. Now, the reason why I love these phone calls is, One, A lot of agents don't follow up. So like that to me is just a telltale sign on like someone's doing their job Yeah, someone's doing their job versus somebody not doing their job So right out of the gate if I have a potential real estate agent calling me and especially if I don't know that person I'm all geeked up about it because now I have somebody that i'm going to target because right out of the gate I know they're doing their job and this is most likely somebody i'm going to want to work with The funny thing is is i'll have a conversation with these people for 20 minutes Three of them Three minutes will be about this client and their pre approval.

The other 17 minutes is me creating rapport, so they absolutely love me. That way, when this deal gets accepted, a lot of times that listing agent goes back to my referral partner, and it's just, once [00:10:00] again, solidifying my position in all this. Now the client gets informed on this, and it's all part of the due diligence.

It looks makes us look like superstars, and it obviously a lot of times I'm solidifying that deal because if all things are equal and the only differating differentiating factor is that conversation with the loan officers. No offense to all the loan officers. I am going to murder you guys in that crush crushing.

Sorry, crush. I'm not sorry. 

Bisendra Melaram: We're not sorry. We're not sorry. We don't get keep here. That's the whole premise of this podcast. We don't get keep. But yeah, it's The team is critical for first time homebuyers especially. So, first step, we got it down packed. Pre approval. Second step, anybody? Find a good agent.

Gotta find that good agent. You gotta find a good agent. Do you know one? I do know one. His name is Bisendra. Unbelievable hair. Right. And, the reason you want a reputable agent they're proactive. [00:11:00] They will hold your hand and guide you through the process. They will make introductions to other servicers that are, will be, need to be participating in the transaction.

So, those relationships are key. And that person, that individual's reputation is critical because you don't want an agent that when they call another agent to make an appointment for you to view a property that you have to see because that's the one that fits and checks all your boxes, they can't get an appointment because they're not liked by the other agent.

For whatever reason, we're not going to stipulate, right? So there's a lot of variables there. So step two would be finding a good agent. Can I, can I 

Jason Kleiger: step in there? Absolutely. Finding a great agent Also helps all around as the attorney and doing the legal part obviously we run into a lot of speed bumps and 

Bisendra Melaram: roadblocks.

Oh, yeah, you're like the 

Jason Kleiger: guy. You're the guy. Yeah, yeah. So I can say that working with Bisendra in prior deals, when things you know, go south, well, not [00:12:00] necessarily south, but when Nothing 

Bisendra Melaram: goes south on 

Jason Kleiger: any of our transactions. That's right. But when bumps in the road kind of, Derail for a little bit the deal a lot of times the attorneys have to look to Not only the loan officer but the agent and the agent will help out and the agent is the attorney's best friend when it comes to Solving that getting the train back on the tracks and getting to 

Bisendra Melaram: closing.

Yeah, and I appreciate that because People don't realize Attorneys can only do so much Lenders can only do so much the person actually with boots on the ground is the agent that has access to everyone and knows Who everyone is so they're basically like hey, I don't like to use the word gatekeeper, but they're the key holder They legitimately know okay your attorneys this person Is clagger your?

Bankers, you know, mr. Marcus your agents like we need your home inspector Everyone down the appraisal's gonna like scheduling for like [00:13:00] appraiser and stuff like that. The agent is all 

Jason Marcus: knowing And i'll give you a perfect example. There's points in time. Let's just say we're doing an fha loan appraiser comes back and they need That handrail put on steps and now we have a seller who's being reluctant A lot of times it's the agents that get that done.

This, I mean, and Pressing company included. I mean, they're at Home Depot Getting that nail, getting that hammer, getting that bar and they're putting that thing up themselves a lot of 

Bisendra Melaram: times. I've actually done it I've actually gone to Home Depot, bought the handrail and the hardware and I've gone there with a tape measure at like 11 o'clock at night with no lights and a flashlight and I've put the handrail on So that my buyer can purchase a property with an FHA.

Yep. 

Jason Marcus: Whatever it takes. Yeah, yeah, 

Bisendra Melaram: yeah. People are like, what? And for those listening that don't know, you know, FHA is Federal Housing Administration and they have certain guidelines when they lend you money. And further into the podcast, in another [00:14:00] series, Mr. Marcus will invite you to his neighborhood and he will go break down the specifics of each different loan type. 

Alright. So, yeah. So. So, we have lender number one, first and foremost, agent number two, number three. 

Jason Marcus: You guessed it, find yourself a great real estate attorney. 

Bisendra Melaram: It's gotta be. And you know, honestly, I know you guys personally, so you guys would be call one, right? But I would call Mr. Marcus first, and you would get a text message simultaneously.

Just saying as my attorney you would get like the text message like okay, dude, this is what's gonna happen. And I firmly believe that In the pyramid of purchasing a home your real estate attorney is the most critical component for protection right for protection because the attorney looks at the entire transaction all pieces all moving parts For the [00:15:00] best interest of The party they represent, whether it's the buyer or the seller, right?

I just need to make that distinction because 

Jason Kleiger: yes, you know, yes, you know, that is 100 percent correct. And you know, it starts with I guess you could say it starts with a deal sheet. We get the deal sheet into our office. We look at it, we see the terms we confirm the terms and then the contract drafting process begins.

Now, the way I go through contracts is I spend. time going through it. Generally, we have writers and everything, but, you know, in reality, sometimes other attorneys kind of slip things in there. And that's why you want to have an attorney that really kind of goes over everything fine tooth and comb. But When it comes to protection of the down payment for a buyer, okay, that buyer just put hundreds of, could be a hundred thousand down on, on a house.

Sometimes more. Yeah, and that's at risk from the start, that's at risk. And it's my [00:16:00] job. To make sure that that buyer's down payment is either safe and can be returned in case something happens, a contingency in the contract, or it can be applied to the purchase, which is what we all like to see happen.

But you know, it's something that it's a responsibility to the client. It's a responsibility to the client. We all, we each have responsibilities to our clients. But it, you know, with, when it comes to the legal part and making sure that The buyer, in the sense that the down payment is protected, and that we go along to closing, and the house is correct, and there's no violations, there's no open permits we go through all of that, proper certificates of occupancy.

We make sure of all of that for a seller. It's a little bit, I guess you could say easier. However, you know, we need to make sure that the same, you know, rules apply, but in kind of in reverse. Yeah. So, you know, we would have where if a buyer starts either getting cold [00:17:00] feet, they can't just walk away.

Alright, we have your down payment. Right, there's 

Bisendra Melaram: no such thing as buyer's 

Jason Kleiger: remorse. Exactly. You put a down payment on a house, you sign on the dotted line on contract, okay? The only way you can get out, there are certain, there are a few ways that you can get out. Yeah, we're not, we're not gonna 

Bisendra Melaram: let everyone know those trade 

Jason Kleiger: secrets.

And then, and then, and then here comes the big part that's full circle right here. Right. As a seller, alright, a lot of times when you have someone who's lived in the house for 50, 60 years, There are a lot of things that they did to the house that they didn't get permits for. You know, they added a sunroom that they never got a CO for.

They have you know, their son living in the basement. You know, these issues come up. And the problem is banks will not close with these issues unresolved. And also, as an attorney, you would not let your buyer close with those issues unresolved. And when I'm saying this comes full circle is that Again, we need the team to kind of work together to see what we can do.

We need the real estate agent to see, [00:18:00] okay, you know, we'll get the inspector, we'll, we'll call the inspector, you know, and make sure that this violation is cleared up. We need the loan officer to see, hey, maybe this one permit they can kind of waive, you know, it depends on each you know, there are many factors, but you know, these are some of the issues, but that's why I say it comes full circle in that situation.

Bisendra Melaram: Awesome. That's some great information. I'm going to pull you back a little bit. So for all the agents listening, what is it that you look for on a deal sheet? 

Jason Kleiger: Other than it's being complete. Yes. We need all the information, every single piece of information on the deal sheet. We need down payment amounts.

We need what kind of loan they're going for. You know, everyone's information. And we also need license information. Right. Okay. And the more that that is filled out. The better we can represent our clients, right? More information 

Bisendra Melaram: can be put 

Jason Kleiger: into the contract. Exactly. Because, you know, if if this is an FHA loan and they're putting down three and a half percent, okay.

And then all, and [00:19:00] we don't know that based on the deal sheet. All of a sudden, someone can miss something on the contract, and this person is now an all cash buyer because they weren't supposed to go for an FHA mortgage in the first place. 

Bisendra Melaram: Okay, got it. So, So, completeness. Complete buyer seller information, agent information, including license info and number, purchase amount, loan type.

What else? I'm missing 

Jason Kleiger: something. You know, the loan type, the, the you know, the amount of the loan we like to have that because, you know, it's a, if it's a contingency, we need to have that in there. I just 

Bisendra Melaram: remember what I forgot. What'd you forget? They're opposing counsel. 

Jason Kleiger: Of course. That 

Jason Marcus: goes without saying here.

Gotta send that contract somewhere. 

Bisendra Melaram: Wait a second. 

Jason Kleiger: You'll be surprised that we get some, some doozies out there and you know, some are just bare bones and some they, you know, they say, oh, the tub is staying. Okay, well. Where was it supposed to [00:20:00] go? Which room? You know, oh, this is staying, the couch. Which room?

You know, we have to write it into the contract. We have to write every single thing into the contract. If a couch is staying, you know, you have to tell me which room. Which, you know, is it in the upstairs bedroom? Is it in the living room? And, you know, that's something minor that can be corrected easily, but this is something that takes time and it takes time away from, from really representing your client when you could be going over that contract with that client, but instead you're correcting mistakes by real estate 

Jason Marcus: agents.

And we need things to match. So in all of our times, like we have so many problems because it's like. I sit there and I do the loan application with a middle initial, but Jason does it with the spelled out middle name and then like the underwriters are getting this stuff or the title companies are getting this stuff and then it's coming.

Those searches are being done differently. So we have to uniformly get on the same page at some point in time. So and that gets facilitated at the beginning. So if you're asking those questions as agents, and it's like, how exactly [00:21:00] do you plan on having your name appear throughout all documents? It's going to be helpful for both of us on that this side 

Jason Kleiger: of it.

And I just want to add really quick you know, you want a deal to close quick. Then you got to get that right because you're going to have to send an amendment. All right, it's got to go around and get signed. Next thing you know, one of the parties is on vacation in Europe and can't sign it. Okay, and then you're going to have to call the title company and they're going to have to run searches.

Like you said, they're going to have to run searches using that person's middle name. So all of this will take time. And you want 

Bisendra Melaram: to close quick? It costs extra if you have to 

Jason Kleiger: run it again. Yes, exactly. They'll do additional fees from the title company, but at the same time, what's the, what are, what's everyone looking for?

Having a quick closing. And this will just delay it and delay it and delay it. I 

Bisendra Melaram: don't necessarily know if I like quick, I like, I like smooth closings. 

Jason Kleiger: Smooth, smooth is fast and fast is smooth. 

Bisendra Melaram: Yes it is. That's another podcast. So, alright, so [00:22:00] banker or loan officer, real estate agent, attorney. So on my list, and you guys feel free to correct me just following the process, right, so you get pre qualified.

With your banker, contact your agent. Your agent shows you a house, you get an accepted offer, the offer gets sent over simultaneously to both your chosen lender and your attorney. Then what? The home inspection, right? So a lot of people say, oh, no, I'm handy. I don't need to get a home inspection You know the house looks good.

You know when I saw it at 

Jason Marcus: the open house, whatever it is feel me shaking Yeah, yeah. Yeah. Did you hear the air just get 

Jason Kleiger: sucked out of the room? 

Bisendra Melaram: Right? one thing I'm known for saying is No, you're gonna get a home inspection Oh, but why do I have to pay? And you're not paying me. You're paying an independent third party of your choice to make an assessment of repairs [00:23:00] if necessary to the one of the single largest purchases any person will move forward with in their lifetime.

Right? 100%. So why wouldn't you pay the couple of, I mean, it's not a couple of bucks. It's not exorbitant either, 

Jason Kleiger: right? In the grand scheme of things, 

Bisendra Melaram: no way. I think it's worth it just for the serial number check on appliances to show. How long the appliances have been in service. Yeah, 

Jason Kleiger: for, for boilers, definitely.

Right. You know, these are very expensive. So, if, if it's a fridge, you know, it's one thing, because as a inspectors really can't pull it out you know, the fridge out of a, you 

know 

Bisendra Melaram: I've seen them do it. Well They've gotten permission, though. Oh, okay. They got permission. They got permission. Because I was Because one of the things I do is I like to be there.

Jason Kleiger: I like to be present. So when it's an air handler, when it's a boiler, you know, it's readily available there. Right. And they're able to see it. And that's something that's crucial. I mean, I know what happened to me. Is I bought a house, , my first house that I bought. [00:24:00] Okay. The boiler went that first weekend we were there and we did have an inspection, but you know, they said it was 20 years and, you know, we rolled the dice, but at least we knew going in that this was a possibly it's a potential.

Right? Yeah. And, and so I, I, you know, there are times when, I will have a client sign something saying that they acknowledge that they did not inspect this house. And that we, and it was against our advice. We make them sign something saying against our advice, I've decided not to inspect this house.

Mr. Marcus, you have something 

Bisendra Melaram: similar, right? Or does your bank now 

Jason Marcus: When it comes down to inspections, the bank doesn't require it, but it's still that conversation if I'm doing due diligence and we spoke about this earlier about creating trust, it's like, how can I sit there and not suggest doing something like that?

It's just in their best interest. Like we said, in the scheme of things, it's, it's money, but it's not a substantial amount of money. But I had a similar experience myself. My, it wasn't my boiler was my hot water [00:25:00] heater, but it was one of those things where the inspector told me me. That this is aged, this could happen.

It is crazy that it happened to both of us within that first week, which is like, how is that even possible? Wait, wait, yours happened in the first week too? First week, unbelievable. And like, I've, I closed on December 7th. So by December 14th, it's like, we're not playing that game. It's like. And if you haven't met my wife, you know when I'm playing that game.

Bisendra Melaram: She's like fix it and fix it now. Fix it now. Fix it now. Yeah, so I, Home Inspector is a critical component and I suggest like everything else, get recommendations, ask your attorney, ask your lender, ask your agent for recommendations. We would all give you, happily give you Inspectors that we have seen perform on previous transactions because we only recommend individuals that we have experience with, right?

So, after the home inspection gets done, that process gets, the [00:26:00] buyer gets a copy of the inspection report. The copy of the inspection report then gets forwarded and should get forwarded to their attorney. It doesn't always 

Jason Kleiger: happen that way. It generally they don't. Only if they have specific questions.

We've had clients that will send the entire inspection report and then ask my opinion about it. Now, to me, it's a business decision. And it's not a legal question. But, if there's something in there that is of deep concern, We, I'll say, hey, we can put it in the contract that, you know, we have to make sure that it's in working order at closing that you know, that they should replace this part before closing.

So, those are the, the items that, you know, the specific items that clients will come to me and say, you know, how, we need to fix this we need to make sure that this is addressed in the contract, or at least very well, you know, at least negotiated. Now. But entire wholesale inspection reports, again, this is [00:27:00] generally a business decision that is up to the client to make.

It's more for 

Bisendra Melaram: information so that you know what you're getting yourself 

Jason Kleiger: into. Yeah, so if a fridge is two years old but they don't like it you know, I'm, I'm not going to make an opinion on 

Jason Marcus: it. And this is also important to know. It's, you're hiring an inspector. Guys, there's going to be things wrong with this house.

Like, if you're getting an inspection report that's clean, you need to fire that inspector. There's no way. I've never seen an inspection report where it's like, this is perfect, even on a new construction. New 

Bisendra Melaram: construction's construction's the best. Cause when they will find everything and that's what you're paying for, right?

You want them to find the defects. Let's just call them defects 

Jason Marcus: to make that business 

Bisendra Melaram: decision, right? Because if you have, maybe your threshold for defects is not as high as you thought it was. And when you see it laid out black and white, you're like, wait a second. I need to rethink this is, can something be done?

So I think it's a critical component that you get a home inspection done by a licensed professional prior to signing your contract with your attorney. [00:28:00] 

Jason Kleiger: 100%. I, I agree. And you, you did just, just one thing to mention. You did mention new construction. New construction generally has a punch list that will get done after closing.

It's provided for in the contract. A lot of people, and I suggest this highly, will have an inspector come in to do the final walkthrough rather than just, you know the client just doing the final walkthrough with the agent. They'll have an inspector because they'll just add all of that in the punch list.

Smart. Yep. Yep. Yep. 

Bisendra Melaram: You're a smart one. That's pretty good. That's pretty good. All right. So now we got to the home inspector. So if we're following the timeline that gets sent back if it's all good and the buyer understands what they're getting themselves into. That doesn't get sent to the attorney.

Then we move forward. Right? Then Seller's 

Jason Marcus: attorney is going to create the contract. 

Bisendra Melaram: Then the contract gets prepared, sent over. Or, it actually happens simultaneously in my experience. As the inspection is happening, the seller's attorney is [00:29:00] preparing the contract. Sending it over to you for something known as Redlining.

Yes. Yes. Right. So, do us a favor and explain to us what redlining is. 

Jason Kleiger: Okay. So, the seller's attorney always sends over the contract like we, we mentioned. And then the buyer's attorney is always tasked with redlining. What redlining is, is, you know, we basically will go through and cross out what we don't like, what is not favorable to our buyer.

And then we would insert terms that we are favorable to our buyer or our industry standard. You know, for example the mortgage clause usually has something along the lines of a non governmental insured loan. Now, we don't know at that time, or we may know at that time that our client is going to go for an FHA.

So we make sure to cross out items like that. There are other things like you know a five day limit. On being able to tell the seller's attorney that they couldn't get their mortgage, or they got a denial letter. Now, we all know, sometimes things take a little bit [00:30:00] longer than five days. So, what do we do?

We take a pen, a red line, and just cross that out. And we just say, yep, we'll let you know, but you're not going to limit us to five days. Right, 

Bisendra Melaram: within a reasonable amount of time. Exactly. You're not trying to 

Jason Kleiger: waste anyone's time. Exactly. And most of the, the changes come on the seller writer because that's when the seller's attorney can get all fancy and, and add his own language the way he likes, or he or she and you know, that gets redlined as well.

Then there is the buyer writer. So 

Bisendra Melaram: before we get into that, what's a writer, a writer in my unprofessional opinion is just acting as an attorney on YouTube. A rider is an attachment or addendum to the rider. 

Jason Kleiger: Yes, so after what we call the form contract will come the rider, the seller's rider. That rider basically overrides anything in the form contract that disagrees with what's in that seller rider.

So if in the seller rider it says, you know this is X, okay, but [00:31:00] in the form contract it says this is Y, Now it becomes x. Whatever goes in the, in the cellar writer. Overrides, I always say, overrides the form contract if there's contradictory language. Same thing for the purchaser rider. If there's something in the purchaser rider, again, overrides not only the form contract, but the purchaser rider.

Overrides the seller writer. Now, I'm not saying overrides completely. I'm just talking about contradictory language. I got it. So if there's ever a dispute, saying, hey, you know It's more for clarification. Exactly. Or not even a clarification. It's more of a Like, my riders last, so my rider's more powerful than yours.

So, it's almost like a battle, what we call a battle of the riders. But, but a rider in all you know, essences, after the form contract, you have the two, generally two riders, sometimes a repair rider, but you have the seller and buyer rider, and those will override any contradictory language. So it is [00:32:00] like an addendum to the contract.

Right, and 

Bisendra Melaram: buyers and sellers don't need to be afraid because Well versed attorneys, such as yourself, will explain all the riders and the 

Jason Kleiger: details. 100%. So you could Go ahead, Chase. 

Jason Marcus: I was just going to say that I love contracts so much that I named my son Ryder. Chase's son is actually named Ryder. My son is Ryder.

Yeah, there you go. So every time you guys keep saying that, I'm just like Where is he? That's right. 

Bisendra Melaram: Right. So then, once the contract portion is complete A fully executed contract, which means both parties have signed. A good faith down payment has been placed in escrow. With the seller's attorney. With the seller's attorney.

And a copy gets forwarded to the lender. Yes. Jay, Mr. Marcus, please tell us what happens when you get, or are in receipt of a fully executed contract. First and 

Jason Marcus: foremost, after I'm done dancing, I my lovely, lovely assistant starts to [00:33:00] get the mortgage application prepared with me. We sit there and the one great thing about the mortgage process is the pre approval process.

into the application process. You're not collecting really any additional documentations. I already have these people where I need them to be to get to this point, especially because if we're talking about the timelines, the center found that house, they did the inspection and then it went to Jason for contract.

We're probably over the course of a week, week and a half while all this is going back and I've already if I needed the updated bank statements or updated pay stubs or anything. I've already have these guys Situated and prepared and I already have my documentation three quarters of that applications already filled out.

So my job is to complete the application, get it out to the borrower within less than 24 hours. In most cases, they endorse it, sign it, and I'm up and running. 

Bisendra Melaram: Okay, so you, and the final part of your [00:34:00] application process is only contingent upon receipt 

Jason Marcus: of the contract. Yeah, a lot of times, like for right now, perfect example, I'm waiting on a contract.

My client is ready to roll, chomping at the bit. We're just waiting for the fully executed contract to get going. 

Bisendra Melaram: Nice. So, on average, Mr. Marcus, how long do you think it takes once your application is complete? 

Jason Marcus: See, this is where it gets pretty interesting. I mean, you can get things done in a matter of Two or three weeks on my side did there but there are pieces where we're not going to Expedite things just for the sake of expediting.

So one of the things that we're collecting in my side is just information on timeline So this is where again communication becomes important I'm talking to the attorneys and the realtors and trying to get a feel for what the seller's doing So if the seller just accepted an offer on my buyer, but they haven't found the house that they're going to move to.

And they, we've have an honor about date and guys, we are going to get [00:35:00] into different discussions over the course of time with different States and how it works. And right now we're kind of talking about how New York works. So we have these honor about dates, which it's kind of been an industry standard where you get a free 30 days after that date.

So there's points in time where I'm sitting there and trying to make sure when I'm clearing files, I don't clear them too quickly because things will then start to expire and you don't want to get kind of caught in that crossfire. So there's points in time where I'm trying to really time this right and also with interest rate locks because Interest rate locks.

And there's points in time where the attorneys might call me and be like, Jay, I don't want you locking in initially because we have something else that's outside of our control that could have an effect on these timelines. So this communication becomes crucial in regards to me doing my job. But if you are like gun to my head and we have the title company, like on and playing ball with us, we can get these things done in two or three weeks.

But most of the time with [00:36:00] the way that you guys just. Negotiating on the real estate side and structuring these contracts. I usually am playing these things in like the 45 to 60 day range. 

Bisendra Melaram: Yeah, that's what I tell people. I'm like, once you get your contract, you know, we're, we're, we're shooting for positively 45 days more or less if the seller's on board and they're ready to go.

Jason Kleiger: And I just wanted to touch on something that Mr. Marcus said about rate locks. That's crucial to me as well and it's crucial that the loan officer and the attorney talk because if not you can have a client that their rate lock is going to expire or they're going to extend their rate lock an extra 30 days when really we're closing the next day or we're not going to be closing for a month.

And generally, The attorneys will have that intimate knowledge of when approximately we will close. And if we don't advise, or if we don't, you know, discuss with the loan officer about, you know, how long to, to lock the rate about, you know, regarding this situation, You know, it [00:37:00] hurts the client. It really does.

And, and that's why, you know, people who don't communicate and have that teamwork with the loan officer about rate locks, it's, it's, well, 

Bisendra Melaram: the, the, the people outside of the circle. 

Jason Kleiger: Exactly. Don't realize you have to pay 

Bisendra Melaram: for a rate lock, right? And Mr. Marcus, we'll get into that in another episode where he'll just, you know, we'll, we'll go over the finite details of mortgages and rate locks and interest rates and all that other good stuff in the next coming weeks.

Thanks. So, the two people that we haven't spoken about that's intricate to this process, or fundamental to the process, are the appraiser and title company. Right? Two biggest players in the game in my professional opinion. And so, you two gentlemen will actually have much more insight to this process than I do, since I am not allowed to speak to an underwriter.

I do meet their appraiser to give them access to the property, but usually it's just there to show them how I arrived at my [00:38:00] number, right? How the, how it was reflected in the listing side, right? So I basically have to justify my listing side and show them how I arrived at that number. Sometimes they're appreciative.

Other times they're like, I got this, which is fine, right? But the appraiser is an independent third party. Not privy to any part of the transaction. Their only function is to evaluate or provide a valuation of the property based on other sales within a certain period of time in a certain period of distance, right?

So, Mr Marcus, let us give us a little bit of insight about these two individuals and how.

Jason Marcus: I'm going to handle the appraisal side. I'll pass off the title side to Jason. So when it comes down to the appraiser, the first thing to know is they're not an inspector. They are doing. An inspection to make sure there's nothing detrimental to the house. So I might get an appraisal report back that says, you know, there's wires [00:39:00] hanging from the ceiling or there's a broken window or there's some or there's steps that are broken that are gonna require a Repair being done, but that is about the furthest into that scope that they go.

Like Bisendra said, this is all about the evaluation of value for the bank. So for us, the main component to the appraiser is coming up with the value and making sure it's in line with the contract and the loan product itself. So there are points in time where a Meeting of the minds happens a contract exists and then the appraisal comes in short and we have to restructure the deal once again You don't want people involved in this transaction To not be the best of the best because that because it creates anxiety it creates possible conflict where these things need to be resolved and we have a Problem and we need solutions and we need people that are going to be able to handle that so [00:40:00] in my world It doesn't happen often Where you're the real estate agents and the appraisers are so far off Especially in areas where there's a lot of houses, but we get into some of these rural areas Yeah, it's five miles between properties and nothing sold within 10 miles of this in the last like 10 years.

Yeah. So it's like it becomes problematic. So in our suburban or city areas, we're not really running into those types of problems. And we've been in markets where, especially because it's so limited here on Long Island, where they're not. Dubai-ing it and building more land in the Long Island Sound for us, so it's limited So we really haven't seen many dips in the prices.

They continue to go up So we really don't have those shortfalls a lot But there are those circumstances and when those things happen, we need really strong negotiators to get us to the point where we meeting [00:41:00] of the minds occurs. So now pass along to Jason on the part of the title. 

Bisendra Melaram: All 

Jason Kleiger: right. Well, get ready to sleep.

So you know, that was riveting. And here's my boring stuff. So the title company, as soon as a deal goes into contracts, fully executed contract we will send as a buyer, you order what's called title title report. What that does is it shows. Basically, any kind of lien on the property, including mortgages, if there's a tax lien against one of the individuals living in the house, any judgments, and it also will show open permits, violations, we spoke about this a little bit before, and the important part is that as a buyer, you are entitled to purchase what's called insured title, or insurable title, and what that means is that If you go to sell it in another, let's say, seven years or so, and you want to, you know sell it clear and you don't want to have any kind of problems, you get your title [00:42:00] policy, alright, and if something shows up that was there, let's say, seven years ago when you bought it, The other company will indemnify it.

Meaning that they will basically overwrite you know, Remove it. Yeah, exactly. Remove it or expend money. Now, the title policy has a number. It's like an insurance policy, like for your car and everything. So your car, you know, sometimes you're covered 250, 000, 500. Same thing with the title policy.

So if you buy a house for, let's say, 600, 000, and All of a sudden and you get a title policy for 600, 000. What that means is that the title company and the underwriter will insure any loss related to title up to 600, 000. Now, what is related to title? It's not a home insurance policy at all. A lot of people think it's home insurance.

It's not. The example I always give is that Some nephew of the homeowner you bought from [00:43:00] from 60 years ago just wanders onto your property and says, you know, my you know, my uncle gave me this property 60 years ago and you're on my land and, you know, there's a recorded deed already there and, you know, your title company did Your title company will pay for your attorneys.

They don't like to, but they will pay to defend you against this claim because it is a claim that goes towards title of the land. That's the, the main crux of, of a title policy and, and title insurance. As we know, the bank gets what's called an ALTA policy. We could talk about that another time.

But it also shows you the open permits violations and so on and so forth. Now, these are for information only. only. That means that it's not insured against. However, if you have a good attorney, it's in the contract that they have to give it to you without violations, with no open permits, and they have to close out permits.

So that protects you as well. But the title search will show those open permits [00:44:00] and reveal any kind of you know, defect when it comes to violations. 

Bisendra Melaram: Right. So the title policy is basically insurance on your ownership. Then no one's going to come after that policy has been instituted to stake a claim against the property you just 

Jason Kleiger: purchased?

Well, anyone can come and stake a claim for anything. It's going to defend you, right? Yes, they will pay out. You know, if it's 600, 000, then you could also get the market value rider, but no one does. If it's 600, 000, your title policy, because your house was 600, 000. Right. Got it. And like I said, if someone comes onto your land or and says that here's a deed this is my land, or that, you know, someone died and it wasn't probated properly and therefore it's my property, or I was married all, This whole time and this person never divorced me.

So therefore half of it is mine. 

Bisendra Melaram: That's actually very common. This stuff. Just saying. Oh yeah. Oh yeah. I've come across a few of those this year. I really have. I'm like, wait, you got divorced how many years ago? Yup. 

Jason Kleiger: [00:45:00] And, and those are some issues that arise. And again, the title company will ensure you up to.

600, 000 for that. Now, I'm only giving the example of a 600, 000 house. They will insure against however the value of the house is at the time by that title policy. But that's basically what they cover. Any threat to title and a threat to title is something that will be a threat to your ownership of that 

Bisendra Melaram: property.

So is there anything Mr Marcus that's in the title report? That's a red flag for you guys. Are you guys specifically go in and look for when the underwriter makes their final decision? Cause the underwriter, Oh, actually we didn't talk about underwriter. That's a very, that, that, that's the person with the magic hand that signed the keys to the kingdom.

That person really does because they can't talk to anybody. 

Jason Marcus: I. Spend most of my workday killing those people with kindness. Yeah, you have to man. Making sure that they're my best friends. They are who gets the donuts. They get the [00:46:00] coffees and the hugs. Yeah, there are things in title that could be problematic, but a lot of times depending on the loan product.

More of it comes from the protection by the buyer's attorney than it does with things that I'm going to run into a problem with because of Fannie Mae and Freddie Mac, which will inevitably get into discussing, like, who's buying these mortgages on Wall Street and how they set the rules to most of this stuff, and they don't require the municipality reports, which will have a lot of these things in it.

Because understand, Fannie Mae and Freddie Mac are buying loans in between. The. Boise, you know, and, and in Michigan and all over the country, and all of these municipalities have different rules. So it's like they sit there and they're like, we're not concerned about these things because, you know, that this, this is different all over the place.

So the banks make these decisions. Depending on the size of the bank in regards to what's in their best interest, so that [00:47:00] we call them overlays, which inevitably will discuss, but most of the stuff on title. I don't we don't really on the banking side have a ton of issues with most of it. Like we said, it's in protection.

to the client. So because I'm representing the buyer in these cases, like I'm all for that. Also, I want them to have a clean title. There are certain things that aren't the biggest deal in the world versus things that are a real big deal. So inevitably in future Podcasts will discuss those types of things, but yeah, like to answer your question, there's not a ton of things on title that really we can't work with on the banking side.

Okay, that's good to 

Bisendra Melaram: know.so far we have everyone that participates in the process of a home purchase. First we have the buyer. The buyer finds and gets pre approved with their lender. Then they find their agent. Helps them find the house, their attorney protects them during the contract closing process, right?

Then we have the home inspector that helps give [00:48:00] them insight into the property that they're buying. The appraiser that comes in to make sure that the property is worth what the amount that they're paying. Right, is that a good? Yeah, perfect so far. And then we have closing that happens where everyone is involved with the addition of an additional attorney.

Right, the bank attorney, right? So we have the buyer has their attorney, the seller has their attorney, and the bank has their own attorney. But why? 

Jason Marcus: So no matter what, when you're talking about legal, there's protection on all sides of this. And the bank is really facilitating the actual closing and the documents because they're preparing the docs.

So when it comes down to it, they're the ones that are working with the attorneys to get the final net numbers. Because what's happening and one of the things when we eventually get to our episode that deals with the closing cost breakdowns, [00:49:00] There's a lot of money coming from a lot of different places that even with the way that you guys on the legal side Like break it down and how the checks are written It's not as cookie cutter as you guys may think like in regards to how things get paid off There's a whole pot of money and then they're deciding where things are going to go So like you might I A lot of times we have my client coming with a check, but it's written to the bank for the mortgage of the seller and it's like, but at the end of the day, there's a lot of checks and balances and they have to be pinpoint accurate.

So at these closings, the seller's attorney, the bank attorney and the buyer's attorney will come together and make sure these numbers are. Spot on accurate. 

Jason Kleiger: Yeah, and I just wanted to mention the bank attorney brings the money No, but just to touch on that yeah, it's you know, it's a [00:50:00] whole You know the net proceeds when they come in and the buyer and the seller, you know We want to make it as easy as possible on our buyer and we generally will make the bank bring all the little checks, like a million of them.

But yes, the bank is crucial and they obviously need representation. I've represented many banks over the years. And like we were talking about title before, the bank attorney makes sure that the title policy is correct that it's acceptable to the bank. And, you know, title companies make mistakes.

Sometimes, you know, they, they leave off an endorsement. That is required by the bank. So, it is very crucial that the bank is 

Jason Marcus: represented at closing. And the title company is there also, because obviously one of the other people is the title closer in these, these closings. So, everybody is doing their part, and if there's any issues, it can get dealt with right there on the spot.

Right. 

Bisendra Melaram: The closing day is It's a very exciting day. There's all the faces that you have not seen outside of the home inspector because their job is done once they give you that report. Right? And the only other person you will not see is Mr. Marcus because Mr. Marcus will [00:51:00] be in the trenches making sure If anything goes awry, he can take care of it right away from within the office, right?

Well, have you been to a closing 

Jason Marcus: recently? I have not like it's funny Like I used to go to all of my closings pre covid after covid hit that's when like I kind of like took a step back from it because Bank attorneys were kind of like, hey, the less, less is more. And a lot of times, I mean, you guys remember, we were standing in parking lots.

Oh, yeah. Like waiting to be allowed into those rooms. Obviously things have gotten a little 

Bisendra Melaram: easier. The last closing we did, we did at his office, right? Yeah, I think so. At his office, he wasn't there. No, I wasn't there. And they wouldn't let me in. They're like 

Jason Kleiger: no, it's open. It's only signatories allowed.

I mean, we, we, I just actually had a closing and the person was still afraid of COVID and he had three conference rooms and each party was just separated. Right. And 

Jason Marcus: that was like, yeah, that became the norm for a 

Bisendra Melaram: while. Yeah. It was the, the legal secretary was just walking back and forth with the document for people to sign.

I was like, wait, what? I mean, I understand 

Jason Kleiger: that. It was in the name of [00:52:00] safety. But it was a weird time for real estate professionals. I think just for the world in 

Bisendra Melaram: general. Oh, yes. 

Jason Kleiger: Just learning how to do things differently. And nowadays there are so many more remote closings. Where people pre sign and, and send it into the closing.

Wait, I 

Bisendra Melaram: don't have to go to a closing? No, no. I don't 

Jason Marcus: have to either. Our state, like New York, is crazy with this stuff. Almost nowhere else. I mean, I just had a closing on a property down in South Carolina. There was never a Close it. There wasn't an official closing. It's like I got sent the docs. I signed them, got it notarized, sent it back, went to an attorney.

They sent it to the buyers like and this happened all over the course of two or three days. Checks were sent out. I've never met these people that purchased my property. I have no idea what they look like. Pick him out 

Jason Kleiger: of a lineup. Even South Jersey is like that. So it's, it doesn't have to be South Carolina, South Jersey.

They have, they have, they have settlement agents. Yeah. They just go there, sign documents and, and you know, the money crosses [00:53:00] the table and that's it. No attorneys there. And 

Jason Marcus: imagine like a world where we weren't chasing real estate commissions, like Oh, yeah. Yeah, yeah. Can you imagine? Can you imagine?

Great realtor is like the gentleman to my left. No problem. He will submit his commission bill But sometimes for some reason some of these guys we have to chase a little bit to try to get I don't know 

Bisendra Melaram: Why you would have to chase imagine right give them 

Jason Marcus: money. Hey, we want to give you thousands of dollars can we just have a statement from you?

Bisendra Melaram: Yeah, like your license number on it. That's all you have to do Yeah, I don't understand office letterhead broker number Agent name. Don't you want to get paid? Like, you did the work. Yeah, yeah. Hopefully. Yeah, yeah, right. No, no, right? So much so that they acknowledge that you're the party that's supposed [00:54:00] to be receiving these funds.

Correct. Oh, it takes one minute. One minute. Yep. Yep. Go to your broker, get a copy of it, write your name on it, send a copy of your license and you're done. Pick up your check at closing. I don't get it. But yeah, that's a lot of information. So if you're listening out there, feel free to contact either Mr.

Cliger, Mr. Marcus, or myself, Bissandra. All of our contact information will be in the description below as well as the First Time Homebuyer Roadmap. And any other questions you may have, just reach out to either one of us on social media and then we'll get back to you. Thanks, guys. That was very informative.

I think I actually learned something. That's awesome. I mean, it's not like we've never done this before. So join us next week when the topic will be negotiating the purchase price.

Thanks, guys. See you next week. 

Jason Kleiger: See you guys. See you guys next week.