Interested in buying a home? If so, consider the following legal details that come with house purchases in the US:
- Buyer’s Right to Inspect the House
In most cases, buyers link up with real estate agents or dealers who will give them a tour of the house they want to purchase. If the prospective buyers see what pleases them, they will rush to the bank to initiate the purchase. While it could be exciting to find that perfect house, rushing things can end up being a grave mistake.
Did you know that you have a right to hire an inspector before purchasing a house? It’s easy for you to overlook important details during a house tour. This is why your attorney will normally add inspection clauses as contingencies in the house purchase contract.
The house inspection report will cover details of the home, such as the status of the grading and drainage, driveways, patios, and external features. The report will also reveal whether the fascia board lines, windows, and doors are properly aligned.
Failure to have an inspection clause in a purchase agreement could give the realtor the right to block an inspection at a later stage. You may not be protected by the law if you don’t use your right to do a thorough and professional inspection.
- Understand State and Local Housing Laws in Your Area
Buying a house involves a lot of things. Among the important stuff you will have to deal with is legal compliance.
Before purchasing a home in a certain neighborhood, check with the local authorities. State housing laws, fire and safety requirements, zoning laws, and other rules come into play during a house purchase.
You may flout some laws unintentionally when you purchase a new house. For instance, some localities require a new homeowner to get a certificate or permit to do aesthetic renovations on the exterior. At the same time, local homeowner associations may have their own legally binding provisions on the things you can and cannot do on your new property.
- Use Contingencies to Protect Yourself
Contingencies are clauses that are added to a sale agreement. The clauses are meant to define specific conditions that have to be met for the purchase to go through. Contingencies can be used as walk-away clauses to protect you if you change your mind about the purchase.
Some of the contingencies you can insert into the contract include:
- Home Sale. This contingency allows you to peg the purchase on your ability to find a buyer for your current home. However, many realtors ignore buyers using this contingency.
- Title Contingency. This is a must-include contingency, which allows you to walk away if the seller cannot have a title ready before closing. The clause protects you from purchasing a contested or fraudulently acquired home.
- This contingency allows you to leave a deal if your lender rejects or fails to process your mortgage application before closing.
- Appraisal Contingency. Insert this clause if you are unsure about the fair market value of a house you are interested in buying. The clause will allow you to stop the purchase if an appraisal report disputes the seller’s price, and the seller is not willing to revise it on time.
- Inspection Contingency. This clause allows you to conduct a house inspection before closing. You can walk away from the purchase if any unresolvable issues arise during the inspection.
- Handling House Purchase Documentation
It would help if you hired an attorney to handle all the legal documents, such as contracts, sale agreements, contingencies, deeds, house title verification, and compliance. An accountant would also come in handy when it comes to handling payments, taxes, house valuation, and other fees.
Sometimes you may have to purchase insurance for your title. This shields you and the lender if there is an issue with the ownership of the house after closing.
- Closing Details: Handling the Filing, Deed, and Mortgage Closing
Congratulations if you’ve managed to come this far. The mortgage closing is normally done at the tail end in the presence of your realtor and lawyer. This can only happen after you’ve secured a mortgage approval from your lender.
After closing, you will get a deed that shows who the new house owners are. This could be altered to be joint ownership, depending on your needs. You must then deposit the relevant documentation to the local authorities as required in your area.
The above are five legal considerations any homebuyer should know.