Legal Guide

Top 5 Legal Issues to Avoid When Buying a Home

For most Americans home ownership is a major aspiration. Renting a house or an apartment can often feel like throwing your money away, and it’s never truly ‘yours’. You won’t be able to make all of the changes you want. Maybe the landlord won’t let you paint, have a pet or improve the terrible fixtures in the bathroom. Regardless of the reasons why, at some point you’ll finally be ready to purchase a house of your very own. And you’ll try all sorts of methods to make it happen based on your circumstances. Just keep in mind that this is a legal contract you are entering, and like most legal contracts you can run into real trouble if you don’t know what you are doing. It takes months of research and careful attention to detail during the negotiation, and there are no shortcuts. Here are five of the top legal issues to avoid when buying a home.

As attractive as it may seem, be very careful about entering a rent with option to buy situation. This can be an exciting opportunity for plenty of reasons. Maybe you love your rental and can see yourself in there long term. This would allow you to build up to the purchase, while saving all sorts of money you would have spent moving. It’s a great option, yet the owner offering it to you may not always know what he or she is doing. Pay close attention to the contract before you sign it. If it doesn’t have crystal clear language that outlines the ultimate price to purchase and the impact each of your expanded rental payments will make on the future down payment you might get taken for a ride.

There might come a time that you absolutely fall in love with a property, but you’re just a bit too late. You’re offering a price the seller would love to take, but he has already given the go ahead to another party and agreed to their price. He might suggest you submit a second contract in case the first buyer backs out. This is tricky legal ground. The seller can accept your second contract, but he is bound by law to honor the first contract if it goes through. You’re betting that the first buyer backs out, and that could be a costly bet. Remember, you’ll have to pay to have an attorney draft that contract you hand over.

Another problem you could face is getting stuck with a home inspector that isn’t qualified to do the job. Perhaps the seller or his real estate agent recommends someone, and you just blindly go with him because he’s inexpensive. Well, home inspections aren’t actually legally required in most cases, and if you go down this road it is your responsibility to make sure the inspector you hired is sufficiently qualified and insured to do the work. If the inspection is subpar, or if the seller doesn’t disclose any maintenance problems with the home you could have a lawsuit on your hands.

Many of the legal issues that come up within the home buying process happen during closing. This is the period when the deal actually comes together. The inspections are completed, the offer is accepted, and hundreds of pages of contracts need to be reviewed. A problem could arise if you’re ready to seal the deal and the seller is stalling the closing process. If he suddenly disappears and won’t return phone calls from you or your realtor you can take legal action. Just remember that you may end up having to walk away from the house, even after all of this work.

Finally, don’t forget about all of the additional costs of home ownership outside of the purchase price. Remember that there are many other things to think about besides your mortgage payments. For one, there’s the yearly property tax you must pay. Did you look up the tax rates when you were shopping for those Raleigh homes for sale? This can blindside an ill-prepared buyer. But ignorance is no excuse. If you avoid paying your property taxes the government will come after their money. And you’ll likely have no legal recourse.


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