Purchasing a home is one of the most important decisions you will make in your life. Although a vast majority of home purchases turn out exceptionally well, sometimes, however, they do not and they turn into a costly and time consuming legal mess. Fortunately, you can take a few steps when purchasing a home to potentially avoid problems in the future.
The Contract
Typically, the first step in purchasing a home is submitting a written offer. The seller can either reject your offer, accept your offer, or propose a counter offer. If the seller accepts your offer – or you accept the seller’s counter offer – a contract is formed. In most purchase scenarios, offers are submitted using pre-printed forms. It is imperative that you read and understand the complete contents of the form prior to signing as it covers all aspects of the purchase such as price, down payment, escrow, description of the property, requirements regarding inspection, closing costs, and how disputes will be resolved. Keep in mind, just because it is on a pre-printed form does not mean that the terms are non-negotiable; terms can always be added, modified, or removed. Moreover, if you have a lawyer review the offer, he or she can help make sure there are provisions to protect you, including:
- A financing clause. Unless it is a cash deal (or you specify that there's no loan contingency) your offer should include a financing clause. The financing clause provides you with the right to cancel the transaction should you be unable to find suitable financing within a specified time.
- A home inspection clause. A home inspection clause provides you with rights if an inspection reveals serious defects or hazardous conditions. Upon receipt of the report – and usually within a specified time – you may approve the inspection, request the seller to make repairs to discovered defects, or lower the purchase price. If the seller agrees, the transaction proceeds, however, if the seller is unwilling, you have the right to cancel the transaction.
- A “sale of other home” clause. Frequently, before a buyer completes the purchase of a home, he or she needs to close the sale of an existing home. Having a "sale of other home" clause lets you cancel the deal if you are unable to sell your existing home.
- A list of items included in the sale. When you buy a home, you’re really buying the land and everything attached to or on top of it. Problems arise when a seller removes a fixture such as an appliance when the buyer believed it came “with the house.” To avoid such disputes, be sure the contract lists all items that are included in the sale.
Finally, another important piece of advice is to make sure all oral promises made to you are put in the written contract, including anything the agent or seller tells you will be done. Without it in the contract, most likely you will not prevail should a dispute arise.
Real Estate Brokers
A listing agent (seller’s agent) is only responsible for representing the interests of the seller; not the buyer. To make sure your interests are protected, you should consider hiring your own agent. However, keep in mind your agent only gets paid a commission if you purchase a home. Be cautious of agents pushing to finish a deal, certainly if their suggestions to not seem to be best for you. Our law firm can properly protect your interests when buying a house, and our loyalty is to you alone.
Property Insurance
Make sure the house can be insured at reasonable cost. Check if it's in an earthquake, flood, hurricane, fire or landslide zone, which can mean higher insurance costs. Ask an insurance company to confirm they will provide insurance.
Title Insurance
“Title” is your legal ownership rights in the property. Before you buy a home, seek legal help to make sure you’re getting a clean title, meaning that no one else is claiming any right or interest on the property. You should also buy a title insurance policy which protects you from problems in the chain of title, such as liens or forged deeds. It pays your losses if someone makes a claim.
Inspections
A leading cause of disputes involving the homes purchases is over issues the buyer discovers after moving into the house, such as leaks, foundation issues, termites, mold or other serious and potentially expensive problems. To reduce the potential for such problems, it is best to have the home inspected by a qualified professional before you purchase the home. Although most states require sellers to make disclosure of known defects, you cannot rely on what others may or may not consider serious enough to disclose. Having an inspection in several key areas including the home's structure, environmental hazards (like mold or asbestos), pest control and soil (especially for hillside homes) will help you make a more informed decision.
Many home buyers are tempted to rush into things without paying attention to details. But if you take steps at the start — by making sure the contract has provisions to protect you in case of problems, using your own real estate broker, ensuring you are getting clear title, having the home professionally inspected, and having the contract and other key documents reviewed by your lawyer — you can likely avoid future problems.
Contact an attorney at Triscaro & Associates today. Please call us for all your legal needs. We offer a full range of legal services to individuals, families and businesses, including personal injury, estate planning, real estate, family law and business matters. We are dedicated to providing the highest quality legal services at a reasonable cost.