Legal Considerations to Make When Buying and Owning a Home - Ideal REI

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Legal Considerations to Make When Buying and Owning a Home

A lot goes into the home buying process and home ownership. You have to not only find the right home but also find it at a price that works for you and your family.

In addition to that, you also need to do things like furnishing it, securing a mortgage and paying the fees. Thankfully, the excitement around buying a new home and being a homeowner makes that process a little easier.

However, as exciting as home buying and ownership can be, it is important to realize it’s a large purchase! A home is likely the most expensive thing you will ever own. Most people will take decades to pay off their home.

As a result, you want to ensure that all legal requirements are met when you buy it. Additionally, you should also be aware of potential legal issues during home ownership.

This article is going to look at some major considerations you should make when buying a house or as a homeowner.

Please note, the author of this article and no one at IdealREI.com is an attorney and cannot provide legal advice. Everything written is the opinion of the author.

Know What is Legal and What Is Not

Buying a home is often uncharted territory for many people, and this can lead to a lot of confusion. The best way to limit this confusion is to educate yourself about what is legal and what is not.

In particular, you should educate yourself about contract law. For example, a seller can take numerous bids, but can only sign one contract.

If they receive a better offer but have already signed a contract with another buyer, they cannot renege unless the first buyer backs out. Many sellers may think about this or try this, despite the fact it’s illegal.

So unless you want to potentially be taken advantage of or left in the dark about things, it is important to know what is legal in your area.

On top of knowing what is legal during the buying process, you should also know the local laws in your area. Some areas will allow things like planting trees on the property line, while others will not. Also, be aware of any HOA’s (homeowners associations) in your area.

They can regulate a wide variety of things such as landscaping, decorations and even the pets you have.

Make Sure You Meet All Contingencies

In any sort of real estate contract, there will be contingencies that must be met before the deal is final. Normally, the biggest one that a buyer has is the sale of your current home.

Most people sell their previous home before moving into a new one, to be able to afford it. However, having a contingent offer is sometimes negative as many sellers might prefer to work with someone who doesn’t have to sell a previous house. Simply put, it avoids any potential delays. So you might be better off selling your home in advance and finding somewhere else to live while you find a new one.

Of course, this is just one common contingency, but there are many that could apply. They must be met before any legal sale of the home takes place. If you have trouble understanding some of the contingencies or are unsure if you can meet them all on time, it is a good idea to meet with a real estate expert or lawyer to better understand your options.

Ensure You Have Enough Insurance and Know Your Options

Having homeowners insurance is a very important thing to have and it can give people peace of mind. However, the sad truth is that many Americans lack the necessary amount of insurance. Additionally, they also lack the savings to deal with a disaster like a flood, fire or hurricane.

Also, many don’t understand just what their insurance policy includes and just assume they are covered. This can lead to a lot of headaches if disaster strikes. For example, the devastating wildfires across California in 2017 caused many people to lose their homes.

In addition, the fires caused billions of dollars in damages. It is believed that some of these fires were caused by PG&E not properly maintaining their electrical infrastructure.

While some of this damage was covered by people’s insurance, those without enough insurence were left with some huge problems.

However, this doesn’t mean all is lost for the people affected by these fires. There are several legal teams and attorneys working with victims to help understand their legal options (including www.pgelawsuitguide.com). They intend to help victims of these fires get back on their feet and get the restitution they feel they deserve.

As a result, having enough insurance (or being knowledgeable of your rights after a disaster) is an incredibly important legal consideration as a homeowner.

If not, you could be on the hook for damages. You might not know your course of action during a disaster either. You shouldn’t rely solely on litigation to help you out. Don’t forget, it is important to be aware that it is indeed an option you can take.

Know the Taxes and Fees

While buying the home is certainly the most expensive part of home ownership, it is not the only real estate expenses you are responsible for. You will need to pay property tax, HOA fees, insurance, and potentially other things as well.

It is important to not only know the taxes and fees you are responsible for and when they’re due, but also make sure you can afford them. Depending on your home and where you live, these could be thousands of dollars a year.

In addition to knowing the taxes and fees you need to pay, you should also educate yourself on the various types of documentation related to real estate. This includes things like the purchase agreement, title, and the deed. These are important to keep around and understand, so be sure to familiarize yourself with them as best as possible.

Hopefully, this article has been able to help you learn a few big considerations to make when buying and owning a home. Going in blind and not understanding the legal requirements or options you have is never a good idea.

About the Author James Davis

James is a real estate investor, real estate agent, and is dreaming about financial independence. His focus is residential (1-4) unit rental property, house flipping, and everything real estate.

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