The sales of real estate in Greenwich is likely to be different from the practices in other parts of the country. Even in Fairfield County, real estate practices differ from town to town. For instance, in Greenwich, binders are not used and all real estate contracts are drawn by attorneys. Unlike places like New York City, all Realtors list their properties for sale on the Greenwich MLS, therefore every property for sale (exclusive or not) can be shown by any Realtor. One final, but very important example, is Agency. Connecticut Law requires Buyers to be represented by a real estate agent and to sign a Representation Agreement, just as Sellers are represented by their real estate agent and sign a Listing Agreement. This practice of Buyer Representation is usually called Buyer Agency or Buyer Brokerage.
 

• Greenwich Real Estate Sale Process from a Buyer’s perspective
• Greenwich Real Estate Sale Process from a Seller’s perspective
• Typical Closing Costs

1. Choose Your Realtor

• Choose your Realtor based on who you like and trust and who understands your needs. Before your first meeting:
  • read about them on the web site;
    • Does the Realtor know the town?

    • Does the person seem like someone you would enjoy being with?

  • ask for their pre-appointment materials;
    • read their personal brochure.

    • call their references - ask lots of questions.

• at this point, call the Realtor to set up an appointment.

2. Schedule An Appointment

• Schedule a first meeting in the Realtor's office to get acquainted.
  • prepare for the meeting by downloading and reviewing forms which you will need to complete or sign from the Library section of GreenwichLiving.com.

  • During this meeting, your Realtor should discuss Buyer Agency as well as your needs.

  1. It is likely that the Realtor will have selected one or more homes for you to see based on your preliminary e-mail or phone discussions.

  2. Remember, you are at the beginning stage of a relationship. The Realtor will need to ask you “Have you signed a Buyer Agency agreement with any other firm?” When you say “no”, you will be able to sign the Buyer Agency Agreement.

  3. Ok - you are able to sign- But do you like and respect this Realtor you are now with?? This same question is in the Realtor’s mind. “Is this someone I would like to represent?”

  1. This often unspoken concern determines whether you want to sign for a trial period (a week or less) or for the normal period of 4-6 months.

  2. At the end of any trial period, you and your Realtor must decide whether or not to continue the agency relationship on a normal basis.

   

3. Learn About Buyer Agency

• Connecticut Law requires Buyers to be represented when they are shown homes not listed by the brokerage where the Realtor works.

• To be represented, the Buyer must sign an Buyer Agency Agreement (sometimes called a Buyer Broker Agreement).

• If the Buyer is shown a home listed by the brokerage, they may choose whether to be represented. If they decline, they must sign an Agency Disclosure Form indicating they did not want to be represented.

4. Sign A Buyer Agency Agreement

• If you agree to have the Realtor represent you, your Buyer-Agent will:
  • recommend Mortgage companies if you are not already pre-approved (offers by pre-approved Buyers are always given more weight by the Seller); See Mortgage Process

  • set you up on automatic e-mails of homes which come on the market and seem to meet your needs;

  • recommend lawyers familiar with Greenwich real estate transactions for you to consider;

  • develop a plan of action
    • to find your home, review it with you and begin implementing it.

  Your Buyer-Agent will find homes for you to see that meet as many of your criteria as possible.
  • During this search your Agent will give you their opinion on how that home’s price fits into the market, so that when you decide to bid on a home you can make an educated price decision.

 

5. Bidding On A Home

• Once you have found a home you wish to bid on, your Buyer-Agent will:
  • check the property’s history;

  • discuss strategy;

  • do a CMA(Comparative Market Analysis), if it appears to be needed;

  • negotiate exclusively in your interest.

   

• Once you have an agreement on price, terms, contingencies (including the mortgage amount needed by the Buyer) and closing date, your Buyer-Agent will prepare a written offer.
  • Offers and counter-offers are normally submitted orally and not in written form, until agreement has been reached.

  • The written offer, even though signed by the Buyer, is non-binding, does not include a check (Binder) and simply represents a good faith agreement between the Buyer and the Seller.

 

6. Contracts

• The Seller’s attorney uses the written offer to draw up a contract and submits the contract to the Buyer’s attorney. The Buyer’s attorney uses it to make sure the contract meets the terms of the Buyer’s offer.

 

• While the contract is being drawn, the Buyer’s Agent will provide the Buyer with recommended inspection services and will schedule the inspections for the Buyer.
  • Inspections usually consist of a physical inspection of the home (including termite) and its systems. After which the inspector will provide the Buyer with a written report.

  • During the inspection it is important for the Buyer to accompany the inspector. This is an excellent opportunity to really understand the house. Additionally, listening to the inspector you will learn more detail than can normally be put in a report.

  • A Radon canister will be left in the basement and/or first floor. The canister should be left in place for several days, before being picked up and analyzed.

  • Inspections can normally be cleared in one week.

   

• When the Buyer’s attorney receives the contract, he/she will:
  • review the contract to be sure it is in the proper name(s) (Single Name, Joint Tenants or Tenants in Common) and contains all terms agreed upon;

  • review any terms requested by the Seller which are not in the standard contract normally used by the real estate attorneys;

  • arrange title search and title insurance;

  • arrange a property survey, if warranted.

 

• The contract will normally provide for:
  • all inspection contingencies to be cleared before it is signed;
  • what is included or excluded from the sale;
  • a 10% deposit to be sent with the contract signed by the Buyer;
  • a date when any mortgage contingency is to be cleared (usually three to four weeks);
  • a closing date when the title of the property will be transferred and the other 90% of the purchase price will be paid.

 

• Once the Seller has signed the contract and returned a copy to the Buyer’s attorney, the Seller is committed and the Buyer is committed if they are able to obtain a mortgage.

 

• Once the contact is signed, the Buyer’s Agent will:
  • Provide Buyer with recommended insurance agencies to consider;

  • arrange for the Buyer’s mortgage appraiser to gain access to the property;

  • request a list of utilities and service people used by the Seller.

   

7. Pre-Closing

• Before Closing the Buyer will want to make sure:
  • insurance is in place before the closing;

  • utilities such as gas, electricity, cable and phone will be turned on in the Buyer’s name by the time of the closing (Utilities require the Buyer and Seller to contact them directly.);

  • the alarm company is scheduled to set-up new alarm codes;

  • locksmith is scheduled to change the locks;

  • the moving company has committed to a convenient moving date.

 

• Pre-Closing Inspection
  • Several hours before the closing the Buyer, their Buyer-Agent and sometimes the Seller’s Agent will “walk through” the house.
  • The Buyer will want to try every faucet, toilet, air conditioner and anything else they can think of. The house should be in the same working order as it was during their building inspection.
  • The property should also be essentially unchanged. If a large tree has fallen or something material has changed, the Buyer and their Agent should immediately call the Buyer’s attorney and Sellers’s Agent and request compensation for the problem at the closing.
  • The home needs to be “Broom Clean” and all personal property needs to be removed.

  • One thing important to the Buyer is to make sure that all of the fixtures not specifically excluded are still in the house.

 

8. Closing

• Once the mortgage contingency is cleared, the sale can be closed at any time the parties agree.

• Closings used to be in the Bank holding the mortgage. Outside of Greenwich, it may be held in the title insurance company’s office. In Greenwich, normally the closing is in the Seller’s Attorney’s office, but can be in either Attorney’s office.

• It is increasingly less common for the Seller, their Agent or the Mortgage company to attend the closing. Papers can easily be signed in advance and held in escrow by the Seller’s attorney.

• The Buyer’s attorney will review the papers, explain any clauses to the Buyer and review the HUD-1 Settlement Statement which the Buyer’s attorney had previously provided to the Buyer. See Closing Costs

• The Buyer provides personal checks for expenses and adjustments.

• The Buyer, and/or their mortgage company, gives the Seller’s attorney a certified check for the remaining 90% of the purchase price. The Seller’s attorney deposits it into their escrow account and uses the funds to pay off any Seller expenses including their mortgage.

• Seller’s attorney will deliver to Buyer’s Attorney, a clean title (deed), free of any encumbrances (mortgage or liens) and will provide Buyer with keys to the house and any garage door openers.

• The type of deed (warranty or quitclaim) does not matter, what is important is the substance of the deed.

 

9. Post Closing

• Buyer’s attorney will immediately record the sale (deed and mortgage) in the Town of Greenwich’s land records

• Buyer changes locks and alarm codes for the house.

• Buyer starts delivery of newspapers.

• Buyer forwards mail to their new address.

 

 

1. Choose Your Realtor

• Choose your Realtor based on who you like and trust and who will market your property well. Before your first meeting:
  • read about them on the web site;
    1. Does the Realtor know the town?

    2. Does the person seem like someone you would enjoy working with?

    3. Ask for their pre-appointment materials;

    4. read their personal brochure.

    5. call their references - ask lots of questions.

   

2. Schedule a first meeting to get acquainted.

• Prepare for the meeting by downloading and reviewing forms which you will need to complete or sign from the Library section of GreenwichLiving.com.

• Some people interview many Realtors to see who will suggest the best price. This is counter productive.
  1. The Realtors you reject will be less interested in showing your home.

  2. If you choose the person suggesting the highest price, you are just fooling yourself. You are likely to be choosing someone who either does not know the market or someone who is being disingenuous. It is unlikely that anyone can make a buyer (represented by their own Buyer-Agent) pay more for a home than it is worth.

• The Realtor you want is the one who will do the best price analysis, do the best marketing, communicate with you regularly and bargain effectively for you.
   

 

3. CMA

• The Realtor you choose should then draw up a carefully considered CMA (Comparative Market Analysis). The purpose of this CMA is to educate you about the market so you can make an informed price decision.

 

4. Listing

• You and your Realtor sign a Listing Agreement.
  • Your Realtor should include codes to indicate that you can reject any offer - even full price offers - and that no commission is due until there is a closing.

 

• Other forms

In addition the listing agreement, you will need to sign one or more of the following:

• Owner’s Disclosure
• Lead Paint Disclosure if your house was build before 1975.
• MLS Input Form
• Any fixtures such as chandeliers the Seller wishes to exclude from the sale should be noted here.

 

• Your Realtor will:
  1. list your home on the Greenwich MLS, the Consolidated MLS , Realtor.com and on the important internet real estate sites;

  2. Order floor plan drawings, if appropriate;

  3. Take photos of the house and yard;

  4. Research the house in Town Hall, to check on wetlands, septic system, building permits, setbacks, etc.;

  5. develop a brochure and web site for your home;

  6. schedule a Realtor Open House;

  7. construct a marketing plan, review it with you and begin implementing the plan. Part of this plan may be a suggestion to commission inspections so that Buyer’s are prevented from finding inspection problems after placing a bid.

   

• Now is the time to get your Connecticut attorney on-board.
  • You need an attorney who is knowledgeable about Greenwich Real Estate practices.

  • If you do not have an attorney, your Realtor will give you a list of recommended attorneys.

• Showing Options

As part of your marketing plan, you and your Realtor will decide how your house should be shown. These options are presented in the order most likely to bring you the most Buyers:

• Key box.
• Key at Realtor's Office.
• Broker accompany.

• Staging Review
  • Buyers often have very limited vision. Most Buyers are looking for homes that can be moved into with little effort on their part. They buy on emotion, followed by logic so the first impression is key.

  • Now is the time, with the help of your Realtor, to create a list of improvements that will capture the Buyer’s eye and be worth the investment.

5. Learn About Buyer Agency

• In 1996 Connecticut enacted Buyer Agency into law. As a result, Realtors seeing your home will be representing their Buyer and not you. Anything they learn which might be of interest to their Buyer-Client, they are bound to disclose to them.

• This means you need to be careful what you say to anyone other than your own Realtor. It is amazing how quickly information about why you want to sell, the price you are expecting and other personal information can circulate.

 

6. Offers

As you receive offers you and your Realtor will discuss their merits and develop a negotiation strategy. The strength of an offer often depends upon their mortgage status - shown below in order of strength:

• No-mortgage continency
• Less than 80% mortgage contingency;
• Buyer is pre-approved;
• Buyer is pre-qualified;
• Buyer has not talked to their mortgage company or needs to sell their house first.

• Once you and the Buyer have reached agreement on price, terms, contingencies (including the mortgage amount needed by the Buyer) and closing date, the Buyer’s agent will prepare a written offer.
  1. Offers and counter-offers are normally submitted orally and not in written form, until agreement has been reached.

  2. The written offer, even though signed by the Buyer, is non-binding, does not include a binder and simply represents a good faith agreement between the Buyer and the Seller.

 

7. Contracts

• The Seller’s attorney uses the written offer to draw up a contract and submits the contract to the Buyer’s attorney.
  • It is important for your attorney to get the contract out to the Buyer’s attorney as soon as practical. Buyers often get cold feet, especially if they were in a bidding war.
     

• While the contract is being drawn, the Buyer’s Agent will schedule the inspections for the Buyer. The Buyer pays for these inspections. The inspections should be scheduled within one or two days of agreement.
  • Inspections usually consist of a physical inspection of the home (including termite) and its systems. After which the inspector will provide the Buyer with a written report.

  • If there is an abandoned, buried oil tank, the Buyer may require it to be tested or even dug up. It is wise to address this issue before you have to answer questions from a Buyer.

  • A Radon canister will normally be left in the basement and/or first floor. The canister should be left in place for several days, before being analyzed.

  • Inspections should normally be cleared in one week.

• When the Buyer’s attorney receives the contract, he/she will:
  • review the contract to be sure it is in the proper name(s), form of ownership and contains all terms agreed upon;

  • review any terms requested by the Seller which are not in the standard contract normally used by the real estate attorneys;

  • arrange title search and title insurance;

  • arrange a property survey, if warranted.

• The contract will normally provide for:
  • all inspection contingencies to be cleared before it is signed;

  • what is included or excluded from the sale;

  • a 10% deposit to be sent with the contract signed by the buyer. (It has become custom for this deposit to be held in escrow by the Seller’s attorney);

  • a date when any mortgage contingency is to be cleared (usually three to four weeks);

  • a closing date when the title of the property will be transferred and the other 90% of the purchase price will be paid.

• Once the Seller has signed the contract and returned a copy to the Buyer’s attorney, the Seller is committed and the Buyer is committed if they are able to obtain a mortgage.

• Once the contact is signed, your Realtor may, if needed, provide comparable property information to the appraiser for the mortgage company to justify the price.

 

8. Pre-Closing

• Before Closing, the Seller will want to make sure that:
  • insurance will be cancelled after title passes;

  • utilities such as gas, electricity, cable and phone will be turned off or transferred to the Buyer (Utilities require the Seller to contact them directly);

  • the house will be thoroughly cleaned;

  • the yard will be in good condition;

  • any fixture not working is fixed;

  • the moving company has committed to a convenient moving date, before closing.

  • Oil company measures oil in the tank.

   
   

• Pre-Closing Inspection
  • Several hours before the closing the Buyer, their Buyer-Agent and the Seller’s Realtor will walk through the house.
  • The Buyer may want to try every faucet, toilet, air conditioner and anything else they can think of. The house should be in the same working order as it was during their building inspection.
  • The property should also be essentially unchanged. If a large tree has fallen or something material has changed the Buyer and their Agent may want to bargain for it at the Closing.
  • The home needs to be “Broom Clean” and all personal property removed.

  • One thing important to the Buyer is to make sure that all of the fixtures not specifically excluded are still in the house.

9. Closing

1. Once the mortgage contingency is cleared, the sale can be closed at any time the parties agree.
2. Closings used to be in the Bank holding the mortgage. Outside of Greenwich, it may be held in the title insurance company’s office. In Greenwich, normally the closing is in Seller’s Attorney’s office, but can be in either Attorney’s office.
3. It is increasingly less common for the Seller, their Agent or the mortgage company to attend the closing. Papers can easily be signed in advance and held in escrow by the Seller’s attorney.
4. The Buyer will write personal checks for the Buyer’s share of adjustments.
5. The Buyer, and/or their mortgage company, gives the Seller’s attorney a certified check for the remaining 90% of the purchase price. The Seller’s attorney deposits it into their escrow account and uses the funds to pay off any Seller expenses including their mortgage company.
6. Seller’s attorney will deliver to Buyer’s Attorney, a clean title, free of any encumbrances (mortgage or liens) and will provide Buyer with keys to the house and garage door openers.

10. Post Closing The Seller should make sure:

• their homeowner’s policy has been cancelled;

• utilities terminated or transferred to their new residence;

• newspapers cancelled or transferred;

• mail forwarded to their new address.

1. Closing Statement (often called Settlement Costs)
A closing statement is a document that summarizes all funds received by the Buyer and the Seller at closing and all funds paid by the Buyer and the Seller for various expenses of the transaction. For all closings involving federally insured loans, the Real Estate Settlement Procedures Act (RESPA) requires that this information be reported on a form from the Federal Department of Housing and Urban Development (HUD) call a HUD-1 form. This form will be provided by your Lender or Attorney. RESPA also requires your lender or mortgage broker give you a Good Faith Estimate of Settlement Charges when you apply for a loan.

2. Buyer Closing Costs
Typically, in addition to the remainder of the purchase price, the Buyer pays for a portion of the property taxes, the cost of all inspections (usually paid before the closing) and all costs associated with the loan (appraisal fee, lender fees, fees to establish an escrow balance for homeowner’s insurance, taxes and pre-paid interest), title search, title insurance, recording fees and their attorney’s fee.

3. Seller Closing Costs

Typically the Seller pays the balance due on any outstanding mortgage loan, the Seller’s portion of the property taxes, commissions to real estate agents (normally one check is cut for the agent representing the Seller and one for the agent representing the Buyer), their attorney’s fees for the deed and drawing the contracts and conveyance taxes.

 

4. Prorating Expenses
Certain items such as real estate taxes, some utility bills (including oil still in a tank actively used for heating) are prorated at closing. Prorating occurs when each party is responsible for a portion of an expense. For example, property taxes are assessed in advance as of January 1 and July 1. If the closing date is between these dates, the Buyer will be responsible for the remainder of the taxes until the next tax payment. There can also be prorations for some municipal improvements to the property such as sidewalks, sewer lines or street repair as well as association expenses or common interest charges at coops or condominiums.

5. Conveyance Taxes
This tax is paid by the Seller to the State and to Greenwich.
The State Tax has two parts:

• ½ percent up to $800,000 in sales price, and;
• 1 percent above $800,000 (nicknamed the mansion or Fairfield county tax)
• The Greenwich Municipal Tax
• 0.11% (just over a 1/10 of a percent or about $1 per thousand)

TYPICAL CLOSING COST EXAMPLE

The following example is based on closing costs for a $1,300,000 house with an $800,000, 30-year first mortgage at 7% interest with a fixed monthly payment of $5,322.42 (interest and amortization). Real Estate Taxes are estimated at $5,650 per year and insurance costs are estimated to be $2,400 per year.

This example assumes that inspections have been completed and have already been paid by the Buyer. These fees are grouped into POC (Paid Outside of Closing) on the HUD-1 Settlement Statement. Building inspections including radon and termite average $400-600, homes with septic or well could be more. Lead paint inspections run approximately $300.

This example assumes that contracts have been signed and that a 10% down payment ($130,000) has been given to the Seller with the signed contract. Because the Buyer is paying more than 20% in cash, mortgage insurance would not normally be required.

The example does not address adjustments (prorated expenses).

Not all expenses in the example will actually be assessed, for instance: the loan fee or the survey fee or the escrows. Expenses and Fees to some extent depend upon your credit rating and bargaining power.

Expense Item	Buyer	Seller
Appraisal Fee	$325
Credit Report Fee	$50
Flood Certification	$20
Prepaid Interest (30 days)	$4,667
Loan Origination Fee (1 point)	$8,000
Underwriting Review	$175
Survey Fee	600
Home Owner Insurance Escrow (2 months)	$400
Real Estate Tax Escrow (6 months)	$2,852
Document Preparation Fee	$250
Attorney’s Fee	$2,000	$2,000
Lender’s Attorney’s Fee	$400
Recording Fee	$70
Conveyance Taxes (Greenwich & State)		$9,880
Real Estate Tax Service Fee	$90
Title Search	$150
Title Insurance	$3,650
Real Estate Commissions (5%)		$65,000
Remainder of down payment before Mortgage	$370,000