Whether buying a home for the first time or buying a second home or investment property, there are several steps each and every home buyer should consider when looking to purchase a piece of real estate.
- Have a written offer to purchase signed by all owners and spouses. Also have an attorney look over this document before submitting to the seller.
- Have a home inspection and survey done. Home inspections are most often where you hear horror stories from real estate closings. I recently had a client who debated getting a home inspection on a property that looked very good on the surface. Upon having an inspection they discovered extensive termite damage and rot that would require approximately $30,000 to repair the floor and support joists. If he had not caught this prior to the end of the due diligence period, he would have been stuck repairing this out of pocket. Additionally, I have had clients who declined to get a survey done. They realized years later a building on their property encroached upon the property of another and had extensive expenses battling over this encroachment in court.
Get financing approved well in advance of closing. Preapproval for a loan will make the process smoother from the start, and some sellers may even require you to be preapproved before they accept an offer. Make sure the property appraises for enough to match the value of your offer.- Do not move in or do any work on the property before closing.
- Make it clear if there are any contingencies to close or closing costs the seller will cover. Do not rely on a promise that a Seller will reimburse you for certain closing costs, make sure this is in writing either in the offer to purchase contract or another closing document. I have seen buyers who thought a percentage of closing costs would be covered by the seller via a verbal agreement only to eventually be stuck paying most of the costs because it was not a document to verify these verbal agreements.
- Inquire about the utility history. I have often times seen buyers who thought they had a payment they could afford based on their loan only to realize it was a hardship when all of the utilities became due at the same time. With the rising cost of utilities this is a significantly bigger concern than it may have been in the past.
- Do a final walk through right before closing. This is your chance to make sure everything is in order prior to closing.
- Consult with an attorney to get a title search and title insurance even if you are not getting a loan; get survey coverage on a title insurance policy.
Take the steps to protect yourself before you close on that new home you’ve wanted. You will be glad you did. Questions about buying or selling property? Contact us to schedule an appointment.