Purchasing a home is not only a huge life change, but it’s very likely going to be the largest transaction you ever make. From the start of your house hunt to your first night in your new home, knowing the legal implications and requirements for homeownership is crucial.
If you’re just starting your home-owning journey, you might be curious about the official steps and legal considerations required to secure your purchase.
[Related: Six Mistakes New Homebuyers Make]
Begin the Mortgage Preapproval Process
Get preapproved for your mortgage so you know where you stand before you start hunting for your perfect property.
Lenders will analyze your financial information such as proof of income, credit, and assets and make a decision for how much money and how long you’re preapproved for. This means you are initially qualified for a loan, and the seller will be more likely to accept your offer.
[Related: The Difference Between Preapproval and Full Credit Approval]
Place a Purchase Offer
After finding your ideal home within your budget, the next step in the homebuying process is to put in a purchase offer.
You can complete the offer to purchase documents with your real estate agent. Although these documents are a standard form county-wide, you may want a real estate lawyer to look over the form and offer any advice or answer questions.
Review and Sign Purchase Agreement
Once you and the seller settle upon the final price, your real estate agent and lawyer should review the purchase agreement document before both parties sign. Purchase agreements include any contingencies, the settlement date, and the date of possession.
Contact Your Lender for Mortgage Approval
The next step is to contact your mortgage lender with the details of your purchase agreement and begin the mortgage approval process. The lender will ask you for additional documents to finalize the mortgage loan.
[Related: Mortgage Approval: What It Means to Be “Approved with Conditions”]
Hire a Home Inspector
Before most sale contracts are legally binding, they typically include a provision for a home inspection.
Double-check with your real estate lawyer or agent that this clause is in your contract. A home inspection can help you view and inspect the home for any potential problems and request any necessary repairs. If the seller doesn’t want to make required repairs, you can potentially lower the price of purchase.
Meet Any Additional Contingencies
Once the contract is final, it’s time to meet any other contingencies that are in the purchase agreement. For example, if you already have a home, you may need to sell your current property before finalizing the sale on your new house if that is a contingency listed in your contract.
Purchase Title Insurance
Mortgage companies will typically require you to purchase title insurance for your property. A title search will be done beforehand to make certain there aren’t any outstanding mortgages or unpaid fees. Your title insurance will help legally protect your homeownership rights.
[Related: Why Real Estate Is the Best Long-Term Investment]
Close on Your Mortgage
Now it’s time to close on your mortgage.
After you gather all of the required legal documentation and meet any contingencies, your real estate agent or lawyer will accompany you to a closing meeting. This is where you’ll sign all of the legal documents and review the financial information before receiving your deed. After filing all of these documents with the county, you’re officially a legal homeowner!
Take note: In the following states, real estate attorneys rather than agents are required by law to be present at property closings:
- Connecticut
- Delaware
- Georgia
- Massachusetts
- New York
- South Carolina
- West Virginia
In any other states, you will only need a notary as the additional member present.
[Related: Expenses to Know About Before Buying a Home]
Homeowners’ Rights
As a homeowner, it is important to know your rights when it comes to your property.
When you own a home, you fully possess the property and can exercise physical control over that property. You also have the right to occupy it without interference, and use it as you like within the scope of the law.
Keep in mind that while you’re allowed to do what you want in your home (legally), you will need to follow the right legal proceedings if you’re interested in running a business out of your home.
Another homeowner right is the right of disposition. This means you have the legal right to transfer your home to someone else. You can do this through a will after death, through a gift of property, or a basic transfer with a lawyer and the right legal paperwork.
Additional Legal Considerations for Homeownership:
- Ensure your losses are covered in the case of a disaster or emergency with homeowner’s insurance.
- Follow and observe any bylaws if your home is governed by a Homeowner’s Association (HOA). Consult a lawyer if you have any issues reviewing these bylaws.
- If you’re planning on renting out your home, make sure you follow the guidelines and do it legally.
Contact Seattle Mortgage Planners Today
If you follow these steps and keep all of these legal considerations in mind, you’ll complete your real estate transaction legally and become a certified homeowner. Congratulations!
Do you have any more questions about the purchasing process? Contact Seattle Mortgage Planners today!
Featured image via Pexels
