If you are looking into purchasing your first home, here are 10 key topics items you should know coming directly from a lawyer.
1. A real estate contract should identify buyer and seller, specify property, include
purchase price, with list other contingencies. It should be in writing and signed by buyer
and seller. It also describes when you can terminate and when you cannot. If one party
does not follow terms and conditions, like any other contract, the other party can sue for
damages in court.
2. Buyer or seller of property can be an individual or a legal entity such as a corporation,
etc.
3. Buyer can pay cash or borrow from bank or lender to pay the purchase price. Seller
can sell to anyone or donate it or lend money to buyer to buy it.
4. Lender lends money only to buy property identified in the contract with restriction and
payment schedule usually called mortgage, a written document. There are several types
of financing: private, conventional or government backed loans.
5. Brokers are licensed by the state government who are expected to follow certain
guidelines, responsibilities, and ethics. They bring buyer and seller to agree to buy/sell
property so that they can earn commission at closing. Broker commission contract must
be in writing specifying terms and conditions and rates of commission.
6. Closing is a scheduled date when all the terms and conditions in the contract are
legally satisfied, and money is offered to seller in return for the ownership documents.
7. Survey is a map of property that gives legal description prepared by a licensed
surveyor that is relied by all parties: lender, buyer, seller, attorneys, and government
officials.
8. Deed is the main document of ownership that gives title to the property. It is prepared
by attorneys and the legal description from the survey is closely scrutinized.
9. Once closing concludes, documents are recorded at the registry office for public
notice.
10. Title insurance company issues a contract that insures the owner and lender. It
outlines easements, restrictions, exclusions, exceptions, and lists coverages in their
policy. It is an important document like deed, mortgage, and survey.