Tips For Buying Or Selling A Home

 Posted on January 05, 2017 in Real Estate

Selling or buying a home is the biggest financial transaction for most people and one of the most complex. No wonder home sales are notorious for legal disputes. Here are ways to avoid some of the most common legal problems encountered in buying or selling a home.

Tips for Sellers

• Make repairs before selling. This includes plumbing, electrical and many other problems that will need to be fixed in any event. Avoiding the need for the buyer to make these repairs will avoid some disputes.
• Make the buyer's good faith deposit nonrefundable. That is, make sure the contract says the seller can keep the deposit if the buyer does not complete the purchase.
• Also make sure the contract includes your right to accept a "backup offer." This is an offer from another buyer who will make the purchase if the first buyer backs out.
• Sell the home "as is." This means the home is sold in its current condition and the seller will not pay for repairs. It does not eliminate the duty, under the laws of most states, to make disclosures about known defects.
• Disclose important defects in writing. Encourage the buyer to get a professional inspection. Respond honestly to the buyer's questions. This will help make sure the buyer knows any problems and will reduce the risk of the buyer backing out late in the process or suing for a defect.

Tips for Buyers

• Make sure the contract contains provisions to protect you. One common provision is a "mortgage contingency clause." This provides that your deposit will be refunded if the sale must be canceled because you cannot get a loan. For example, the contract could allow the purchase to be canceled if you cannot obtain mortgage financing at an interest rate at or below a certain rate.
  
  Another provision to help protect you is a "home inspection clause." This lets you cancel the deal if an inspection shows there are serious problems with the house.
• In addition to any disclosures you receive from the seller, ask if there are any other defects or problems.
• Get a complete home inspection before contracting to buy. This will alert you to problems at a time when you can avoid deciding to buy.

Tips for Buyers and Sellers

• Make sure the contract specifies items included in the sale. Sales of homes typically include the land and everything attached to it. Many disputes occur when sellers take things the buyer thought was staying in the house. To avoid problems, list in the contract all items included in the sale.
• Include a home warranty policy in the deal. This is a form of insurance that pays for many repairs that may be needed for a certain time after the sale (usually one year). This benefits a buyer by assuring repairs will be made. It benefits a seller by avoiding disputes over a defect.

Buying or selling a home is often a source of legal disputes. Following these tips can help your sale or purchase go more smoothly and reduce the chances of ending up in a costly dispute.