Real estate purchase is one of the most costly transactions most individuals are involved in. Before you locate your preferred home to the day you are given the keys, there are specific things you need to consider. Whether you follow ADA compliance & business and other home laws and regulations, you must know the legal requirements connected to the property. In this post, we share some of the things you need to know about the home buying process, according to legality.
Before you start buying a house, you should get pre-approved for a mortgage. It will make it much easier for a seller to accept your offer, knowing that you have been approved for the financing you need. The pre-approval process isn’t very complicated: your lender will take your personal information and proof of earnings and prepare a credit report. You must be clear about how much money you are willing to put down for a cash deposit.
The lender will send you a letter informing you that you are pre-approved for a certain period and a certain amount. To be clear, being pre-approved does not mean you are insured for a loan. It just means you qualify for a loan. The loan company will require more documentation to accept your loan officially.
Your real estate agent will help you fill out this document, which offers to purchase your home. Carefully consider how much you have to give. You may choose to provide less than what the seller is asking for. The offer to purchase is a contract that is advanced to the seller, so it is a complicated document. You can hire an attorney specializing in real estate law to review the offer to purchase and provide legal advice. In most cases, your real estate agent will have used a standard form that is legal in your county.
Still, you want your attorney to make sure that it contains everything necessary to protect you and that it is filled out and executed correctly.
Signing Purchase Agreement
If the seller goes ahead and affects any contract details, your agent or attorney should review the changes. The first part of any home sale is the purchase contract. It is the contract of sale that both parties state once an offer has been accepted. Along with the purchase price, a purchase agreement also defines the following:
- Earnest money – An earnest money deposit is typically 1 to 2 percent of the purchase price. More earnest money can make your offer more appealing to a seller in a competitive market.
- Contingencies – For the buyer and the seller, contingencies typically let them cancel the contract and retain the earnest money deposit if something goes wrong.
- Settlement date – This refers to the date of the settlement of the sale. Appraisals and inspections must be completed in advance of this date. The new mortgage must be secured, and home insurance put in place. All moving parts line up on this day.
- Date of possession – This is when you get to move into your new home, which is different from closing. The residence date allows you to purchase the home and gives the seller time to carry it out. Thirty to 45 days is standard, though it can be longer or shorter depending on the contract.