For most people, buying a house is a big deal. In addition to the financial investment, a new home purchase is usually an emotional process, and there are many legal implications. No one wants to make a mistake that could cause delays or, worse, cost money. Fortunately, you avoid most of these troubles by understanding the legal aspects of buying a house.
What Are the Legal Aspects of Buying a House?
From the time you decide to go home shopping until after the closing, it’s important that you understand the legal requirements you’ll be facing. Here are several important legal requirements to understand when buying a home.
1. Mortgage Approval
Many homebuyers find it beneficial to get preapproved for a mortgage before shopping for a home. This makes it easier for a seller to accept an offer. During this process, you’ll need to submit a lot of personal information, such as proof of income and past tax returns.
2. Purchase & Sales Agreement
When you find the home you want to buy, you’ll make a formal offer, which is a legal contract. Once both parties come to an agreement, your realtor will draw up a purchase and sales agreement, which will contain a variety of legal clauses related to your deposit, the close date, and more.
3. Due Diligence
You are generally entitled to an inspection period, allowing you to do some due diligence. This allows you to inspect the home and ask for concessions if there are any issues. For example, you can ask the seller to make repairs or lower the purchase price to account for discovered problems.
4. Satisfying Contingencies
Some real estate contracts contain contingencies, which are things that must happen before the home sale can move forward. For example, a buyer may need to sell their home before they can buy a new one.
5. Title Search & Insurance
Before you can close, the title company will do a search to ensure there are no encumbrances on the title, meaning the property will be able to pass to you cleanly without any surprises like liens, judgments, or outstanding mortgages. You’ll also want to purchase title insurance to protect your interests if there is a future dispute.
6. Closing Process
Many legal moving parts must come together for the close to take place. Once all the other items (above) are checked off the list, there will be a date and time to meet at a title company or attorney’s office to sign the following documents:
- Closing disclosure
- Loan estimate from your lender
- Mortgage or deed of trust
- Proof of homeowners insurance
- Escrow statement
- Title documents
- Certificate of occupancy if you are purchasing a new home
There are still requirements after you leave the closing table. Specifically, the documents must be filed with the county. However, your title company will usually handle this on your behalf.
The Lafayette Team Can Help with Your Home Purchase
Whether you’re buying your first home or have been down this road before, the Lafayette Team with EXP Realty can help you satisfy these various legal requirements. Our experienced real estate experts help clients throughout the Lake Murray area complete the home-buying process, making it as simple and stress-free as possible. Contact us today.