Beginner Home Buyer Basics

Envision yourself walking through a house (or condominium) for sale. As you walk through, you see the backyard is a perfect place for your dogs and children to play. The dining room would be great for hosting friends and family for the holidays. The living room looks perfect for binge-watching your favorite show. This could be your new home. Buying your first house is an exciting time, but this monumental new beginning is not worry-free. Before this house becomes your home, you must be cognizant that many issues may arise that can cause unease, from needing small repairs to serious legal issues that affect your ability to own the property. However, certain steps can be taken to ensure that you are protected and that these issues are minimized.

Even though the house is as beautiful in person as it was in the staging photos, someone must take a deeper look into the house, meaning an independent inspector. Even if the seller hired an inspector, you must hire your own inspector to make sure that your interest, as the buyer, is shielded. The seller’s inspector might feel no particular allegiance to the seller, but regardless, it is important to remember that inspectors, like the rest of us, are all human who can make mistakes or miss things. This is an additional layer of affirmation to ensure there are no issues, such as leaky plumbing, lead, or mold, which have been overlooked or are just harder to unearth, turning your dream home into a nightmare.

Owning a property not only means that you own the land and whatever structures on it, but you also own the title to the property. Similar to the way in which the inspector examines the physical property for any unwelcome surprises, the title to the property must also be examined because title defects can cloud a title to a property and prevent free and clear ownership. Some title issues, such as missing mortgage discharges, easements, and liens, are common and will typically be revealed by the title inspection, but some title defects, such as fraud and forgery, can be hidden and more difficult to pinpoint. If these defects arise post-sale, it will likely cost a substantial amount to remedy. Title insurance can protect buyers from financial loss stemming from an undetected title defect. While this is merely an option,it is worth careful consideration to ensure that your interest in your home remains safeguarded. Moreover, it is to your advantage to ensure the title is clear prior to your purchase. Don’t let someone else’s headache become yours.

The purchase and sales agreement (“P & S”), which governs the terms and conditions between the seller and you until the closing, must be reviewed by an attorney. Every property is unique, which is why that house you wish to buy is so special to you. Thus, every real estate transaction is unique and every P & S governing a transaction is unique. Once the P & S is signed, you, as the buyer, are bound by its terms, and retracting is considered a breach of contract. Prior to signing, consulting with attorney, who will know what issues to hone in on with the P & S, can help ensure that you, as the homebuyer, fully understand the terms contained in the P & S before being bound by them. An attorney can also negotiate additional terms and modifications that benefit or protect you. For example, under Massachusetts common law, the buyer bears the risk of loss, meaning that, absent a provision stating otherwise in the P & S, in the event that that house gets destroyed by a fire, the buyer is liable. The P & S must contain language that shifts the risk of loss away from the buyer and onto the seller, who likely has homeowner’s insurance to address such disasters.

Purchasing a house is a wonderful event, but the process can be riddled with legalities. Taking precautions is the key to preventing any issues from ballooning. When you are preparing to turn a new house into your dream home, the costs of these precautions are small prices to pay for peace of mind.

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