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Stop, Look, & Check Before Buying a Home
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Stop, Look & Check Before Buying a Home

Prepared as a public service by the Kansas Bar Association

What is covered in this pamphlet

  • What do I need to know before buying a home?
  • How can a lawyer help me?
  • What steps should I take to protect myself?
  • What is a real estate contract?
  • What should I look for in my contract?

Introduction

Buying a home is usually the most expensive purchase a person can make.

When buying a home, you are usually presented with documents, contracts, and price points that can be overwhelming. In situations like this you need a lawyer to ensure that your interests are protected.

First: Inspect the house thoroughly

Buying a home is a huge expense, as such you should take as much time as you feel is reasonable to inspect the home thoroughly. Getting a lawyer who is familiar with real estate can be very helpful. Your lawyer can help you know what to look for and which questions to ask if you are unfamiliar with home maintenance and repair. A lawyer also may be able to recommend a professional inspector who can appropriately inspect your home. You should check to ensure the stability of the roof, wiring, plumbing. Is the foundation sound? Is there appropriate drainage? Is the paint and water system lead free? It is important to inspect the land your home sits on as well. It is also wise to have the seller of the home show you utility bills for the house.

Second: Have an attorney examine the realty contract before you sign it

A realtor will give you a real estate contract to sign. This is the contract to buy and pay for the home. Because there is a lot of money moving around, it must be in writing and be very specific to your house. Sometimes the realtor writes the contract themselves, sometimes they get it from the realty company. In either case, you want to have your lawyer examine the contract to make sure it does not contain terms or agreements that you did not agree to uphold. Often the contract will be different from the agreement you made with the realtor and can contain language that is difficult to understand. No contract can cover every possible outcome of an agreement, so you should make sure you know exactly what you are getting into. Remember the realtor, lender, and the seller all may have their own lawyers and are all looking out for their interests. You should get a personal lawyer to look out for your interests. Lawyers can assist you in negotiating or writing additional clauses into the contract, like escape clauses allowing you to back out of the sale or financing if it ends up being unfavorable to you.

Ask your lawyer to look for the following items in your contract

Good Faith Contingency

Any good contract will include a clause assuring you that both you and the seller intend to act in good faith towards the goal of buying and selling the home fairly. Your lawyer can help you to make sure that both your actions and the actions of the seller are in good faith and lawful.

Description of the Property for Sale

Ensure that the contract contains the address of the house you intend to buy, including the precise legal description as recorded in the official plat maps.

Purchase Price and “Earnest Money”

Your contract should contain the exact price you intend to pay. It should also include the “earnest money” that is required. This is similar to a deposit to purchase the home and your contract should state exactly how you intend to pay it and how it will be returned to you if the need arises. Your lawyer can help you to understand the conditions under which the money will be returned or forfeited. Also the contract should give instructions to escrow agents or real estate brokers who handle your money and specific instructions to give the money back if the contract is terminated.

Marketable Title

Just like with a car, it is important to be sure that the seller of the house is actually authorized to sell it or is the owner or agent of the owner of the property. A house may also have several types of liens or interests on it, these include tax liens, mechanics liens, or separate claims for the property. It is very important to make sure that these liens are paid off, because you will be paying them if the owner does not. Your lawyer can help make sure you get a “certified abstract” and a clean and marketable title. Even in the event of buying a house cheap or to “fix up” it is important to get these titles and insurance commitments examined by a lawyer.

Date of Possession and Closing Date

The seller is required to put a specific time and date of both closing, or the time the sale will be completed, and the time and date that the property will be handed over to you completely. Usually the closing is the date that the deed to the property is handed over to you.

Insurance and Utilities

Does the seller have insurance on the property until the date of possession or closing? If something happens to the property is it appropriately covered? The same goes for maintenance and utilities. Does the contract require you to set up utilities for the home by a certain date? The seller should be required by the contract to maintain the home until the date of possession.

Termite Certification

The contract should have provisions for a termite inspection certificate and what to do and who pays if termite damage is found. Your lawyer can ensure that the certifications provided are verified and inspectors for both termites and other housing necessities like plumbing, zoning and utilities are performed by certified inspectors.

Taxes, Easements, Restrictions, and Assessments

As cities and neighborhoods change, your property may be subject to change as well. A lawyer can help you understand clauses in your contract for “easements and restrictions” as well as the taxes and the special assessments on your new home. An easement is any public space that may be on your property, like a sidewalk, street sign, or a curb. Your lawyer can help access information about how you may use your home under city law. Before signing, you should always ask or have your lawyer ask about the zoning of your home, possible plans for new roads, sidewalks and power and sewer lines that may cross your property.

Warranty of the house and Items included in the sale

It goes without saying that the contract should clearly warrant that all plumbing, wiring, stoves, AC units, heaters, water systems and all else that comes with the house is in good working condition. The seller of the home must provide you with an itemized list in the contract of all the property that you are buying and an assurance of the condition of all items. The list should include any carpet, appliances, rugs, curtain rods, refrigerators, and all items that come with the house, and all exceptions to that list.

Who owns the house?

This might seem elementary, but it is important that you are buying the house from the owner or the owner’s agent. Depending on the contract, you might need a spouse’s signature as well. Apart from that, how are you going to own your new home? Your attorney can give you information about types of home ownership. There are several options to consider. Your attorney will assist you in the determining the best option for you and how it will affect ownership and taxes.

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