Things You’ll Want to Consider Before You Buy a House
You don’t want to be stuck in the middle of a real estate transaction without knowing the answers to these questions. Here are ten questions that may affect the purchase of your new home or sale of the old one that you might want to ask your real estate agent or attorney.
A certificate of occupancy (CO) for the property, is a certificate that indicates that the city or town has approved any construction on the property, that it has been properly completed according to the building code and is safe and habitable by town or city standards. It has become an especially important issue for mortgage lenders who may turn down the loan if there is any construction on the property that doesn’t have a CO. Sellers as well as buyers should be aware of the need for an up-to-date CO.
If you change your mind about selling your house, your agent brings what is referred to as a ready, willing, and able buyer who makes a full-price offer, the real estate agent is entitled to a commission even if you change your mind and decide not to sell your house. Furthermore after you’ve signed the sales contract, you may even owe the buyer something if you back out. For example, the buyer may have sold his house and put his furniture in storage in anticipation of moving. Guess who may be liable for the storage charges? When you list your house for sale, be sure you really want to sell it.
If you get the inspection done before signing the contract you can easily walk away from the deal if the inspector finds any problems with the property, but you run the risk of losing the house to another buyer while the inspection is being done. If you have an inspection contingency placed in the contract whether or not you can get out of it depends on the specific wording of the contract. Will any problem the inspector finds be enough to allow you to back out of the contract? Will there be a dollar limit for each item found that needs to be repaired, or will there be a total amount beyond which you can get out of the contract?
Know that an offer and acceptance is really not binding until a written contract is signed by both the buyer and the seller. Although negotiations are often conducted verbally or by e-mail, real estate agents want to get the contract signed as soon as possible to lock the deal in place when negotiations are complete.
Many things can happen even up to a few hours before closing that can wreck a deal. After someone has moved into your house, they have certain protected rights. If the sale falls through, you would now be faced with an eviction proceeding that can be complicated, long, and expensive, depending on where you live.
Deed restrictions are placed in the deed and can restrict how you use or what you do on your property. These restrictions often go beyond the local zoning laws in controlling the use of your property. For example, you might not be able to put vinyl siding on your home or use the property for a home business even though the local government laws might allow you to do those things. It’s important to know about deed restrictions early because they may affect your decision to buy the property.
Special assessments are additional property taxes that generally go to pay for improvements like sewers or sidewalks in a particular neighborhood. These are often permanent and are usually picked up by the new owner. Alternatively, a town or city may pay for an improvement and offers you the option of paying for it in one payment or selling a bond on your behalf and allowing you to pay it off. The bond is like a loan and may become a lien on your property.
Lastly, a monetary deposit will most likely be held by the attorney or real estate broker representing the seller. They are under obligation to get the seller’s permission to release the funds. Be prepared for a major fight if you don’t meet the exact wording of the contract in claiming your deposit. Make sure you pay careful attention to the wording in the contract, follow all the dates, and have everything in writing. For further reading, see: 6 Must-Do’s Before Buying a Home.