Property investments are unimaginably cost-intensive and require the utmost care. A single problem could end up costing hundreds, or worse, losing the property deal.
This is why every property buyer should do their due diligence to be informed of the basic legal considerations for buying a property.
It ensures that you won’t run into any problems during the buying process and safeguards your investment.
Here’s everything you need to consider on the legal aspect of buying a home.
Get Preapproved For a Mortgage
The first step for you to buy a house needs to be done before you even start looking for one. Getting a mortgage pre-approval will increase your chances of getting the property you want. The seller will more likely accept your offer if he knows you’ve been approved for the financing needed.
It’s not a very difficult process. The lender will run a credit report using your personal information and details of your proof of income and assets. Once approved, the lender will provide a letter stating the time span and amount of money you’re approved for.
Make an Offer to Purchase
Finding the house you want to purchase and putting in a home purchase offer is what comes next. This stage is handled by your real estate agent, who can help you set an offer to buy the home in the form of a document.
You’ll obviously want to offer less than what the seller is asking to negotiate, but you might have to offer more if the house is in a big city where there’s competition.
Sign the Purchase Agreement
The purchase agreement is brought out once both parties have finalized an offer. They sign the contract, which in addition to the purchase price, specifies details like:
- Settlement date
- Date of possession
- Contingencies
- Earnest money
Conduct a Home Inspection
Most home sale contracts include a provision for home inspections that the buyer can utilize before the contract is bound. If that’s not the case, ensure your agent or attorney inserts this in your contract.
After you’ve hired an inspector and they locate an issue that needs to be fixed, your attorney can talk to the seller to make the necessary repairs. If the seller refuses, you can negotiate for a lower purchase price.
Purchase Title Insurance
While the process is still going on, you’ll have to apply for and purchase title insurance in accordance with the mortgage company. A title search will then commence assessing:
- Outstanding mortgages
- Unpaid liens
- Unpaid homeowners association (HOA) dues
You’ll need a separate owner’s title policy in the future if you want to protect the rights to own property and have funds to purchase another property if someone comes with a valid claim to your property.
Settle the Mortgage
Now comes time for the closing to take place. Once all the contingencies have been addressed, and the right documents have been provided to your mortgage lender, the mortgage will be settled.
During the mortgage closing, your attorney will accompany you to sign the legal documentation and review the finances in detail.
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