This is Part II of the three part article “7 Questions to Ask your Staten Island Real Estate Attorney before You Sign a Binder”: 

3)    DO I HAVE TO GIVE MY WHOLE DOWN PAYMENT ON CONTRACT?-NO
Often a broker will put that the full amount of your down payment will be given at the time of contract, this is not always the case.  Usually the amount put on the contract is the maximum amount the buyer can lose if she breaches the contract so the seller wants a higher contract down payment while the buyer wants lower. The old standard was 10% on contract but that is now rare.  The contract down payment is a negotiation term to discuss with your attorney before beginning the process.  He will need to know how much your total down payment (and mortgage amount) will be and how you are getting it.  If the down payment is more than 10% or you are getting part of your down payment from the sale of your current house or from an IRA/Pension loan this needs to be spelled out in the contract.

4)    CAN I CANCEL IF MY ENGINEER INSPECTION GOES POORLY?-YES
In most cases after signing a binder (and before signing the contract) the buyer will have an engineer inspection of the house to determine its true condition.  After the inspection is completed your attorney will review the report with you to determine if you are satisfied or if you want to ask the seller for repairs which will need to be incorporated in the contract.  The seller will put AS IS on the binder a buyer should make sure that she puts SUBJECT TO ENGINEER INSPECTION so not to waive her right to ask for repairs or cancel the binder should the inspection not go well.

5)    IF I DON’T GET A MORTGAGE DO I GET MY MONEY BACK?- YES
The binder should show the amount of mortgage you are seeking to buy the house.  This puts the seller (and attorneys) on notice that the contract needs to contain a mortgage contingency clause which allows the buyer to cancel the contract (and receive a return of her contract down payment) if she cannot get a mortgage.

Part III – 7 Questions to your Staten Island Real Estate Attorney Before Signing a Binder Agreement