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What Should You Know About Buying a Home?
A home is the largest single investment of most Americans. So the first question is: can you afford the home you want to buy. At the time of your home purchase, when the legal title is transferred to you, you will have to pay the price for the home and closing costs. Usually the bulk of the purchase price is paid with mortgage loan. Afterward, you will need to budget for insurance premiums, maintenance, monthly loan payments, property taxes, utility bills, and repairs. To avoid surprises, examine the seller’s bills to get an idea of the monthly expenses for the home. Also check the age and condition of appliances, plumbing, roof, structures and wiring since they might need repair after your purchase.
Using An Attorney-
A lawyer can help you through the home buying process by preparing or reviewing the purchase contract, advising you about financing and title insurance, answering your legal and tax questions, and arranging for the documents necessary to complete the purchase. When you first visit a lawyer, you can ask for an estimate of legal fees and closing costs.
You should consult a lawyer before you sign a contract to buy a home. Although a printed form may be used for the purchase contract, your lawyer can make changes that protect you. For example, a change in the form may give you the right to cancel the purchase (and get a refund of your deposit) if you obtain unsatisfactory inspection report.
Using A Real Estate Professional-
You may want a real estate agent to help you find and evaluate your potential home. Many real estate agents participate in multiple listing services that enable them to quickly identify homes that might be suitable. Also, an agent can help you complete the steps involved in a home purchase. For example, a real estate agent may help you obtain necessary documents. Sometimes the agent represents the seller and the interest of the agent is concluding the sale. The purchase contract an agent prepares may not be as favorable to you as one prepared by your lawyer.
n some states, you may need to sign a binder and submit it to the seller to start the home buying process. A binder can be an agreement to sign a purchase contract itself. In other states, the first document you sign is a purchase contract that contains purchase price. Purchase contracts are called a variety of names, including deposit agreements, earnest money contracts purchase agreements, and receipts. You should not sign a binder or purchase contract unless it protects your rights. A lawyer can prepare the document or review a printed form agreement that you receive from your real estate agent.
Most purchase contracts provide for a cash deposit to show the seller that the buyer is serious. It should contain details about who will hold the deposit and how it will be applied. If you don’t go through with buying the home, you may lose the deposit. Your lawyer can advise you about the circumstances that affect your rights to the deposit.
Any conditions that must be met before you complete a home purchase should be stated in your purchase contract. For example, many buyers make their home purchase contingent upon obtaining a satisfactory report from a home inspector. Before you sign a purchase contract, your lawyer can make sure it contains provisions allowing you to cancel the purchase and get your deposit back if your conditions are not met.
Title insurance protects you against the financial loss you may suffer if there are encumbrances, easements or title defects that were not revealed in a survey or title search. The cost of title insurance is usually paid at closing. Your lender will probably require that you buy title insurance to protect its mortgage interest in the home. You may be able to save money if you purchase owner’s title insurance when you buy title insurance for your lender. Other savings may be available if the seller has a title insurance policy.
Home ownership can provide you with many benefits: secure shelter, a long-term investment and tax advantages. However, a home is also a major financial commitment. There are ways to avoid costly mistakes that can strain your budget and your patience. This pamphlet contains tips to help you avoid problems when buying a home.