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Stop, Look and Check Before Buying a Home

BUYING A HOME IS THE LARGEST SINGLE PURCHASE MOST PEOPLE WILL EVER MAKE.
You should consider, at least the following precautions:

HAVE AN ATTORNEY EXAMINE THE CONTRACT BEFORE YOU SIGN IT.
There is little an attorney can do for you after you have bound yourself to the contract. Many people wrongfully assume a contract must be "all right" because it is on a printed form. Rarely will a form contract cover every particular of a sale, and even if it does, the contract may not be worded to your advantage.A Realtor can be very helpful in preparing the contract. But remember, the Realtor is usually the Seller's agent. The Seller pays the commission and the Realtor is responsible for protecting the Seller's interests. Kansas does allow Realtors to represent the Buyer. You may want to use a Buyer's Realtor.

WHAT YOUR CONTRACT SHOULD ADDRESS
Description of property
State the legal description and street address.

Purchase price and earnest money
This should be precise, including: total price, and earnest money that may be required, when the earnest money is due, and how and when the balance will be paid. Specify the conditions under which your earnest money will be returned to you, or forfeited, if you fail to complete the purchase. Name the escrow agent who will handle the earnest money. Give specific instructions and consent to release of earnest money if contract is terminated.

Marketable title
This assures the Seller actually owns the property and no one else claims an interest in it. For example, tax liens filed against the Seller or prior owners will have priority over your claim in the property as a buyer. Just because the Seller gives you an abstract, or you purchase title insurance,

Doesn't necessarily mean you will be getting marketable title by having your attorney examine a certified abstract to the property or examine a title insurance commitment for the property.

Date of possession
The date when the Seller is required to deliver possession to you. This is usually the same as the closing date, but may be before or after the closing.

Closing date
A specific date by which the sale will be consummated. In the standard transaction, this is when the Buyer pays the Seller and the Seller delivers a deed to the Buyer.

Insurance
Will Seller carry insurance on the property until you receive possession? What happens to the sales contract if the property burns before closing?

Maintenance
Seller should maintain property in same condition until possession is delivered, reasonable wear and tear excepted.

Taxes and special assessments
Who will pay them? If this obligation is divided between Buyer and Seller, the responsibilities of each should be specified. Also, be careful of special assessments that may be imposed on the property after closing (example: assessments for new streets, sewers, etc.) You can inquire about these with the appropriate local governmental office. Specify who will pay taxes to become due in the year of closing.

Easements and restrictions
There is usually a clause in the contract that says you buy the property "subject to easements and restrictions." Examples are utility line easements, alleys, roadways, pipelines, etc. A problem may arise if an easement interferes with your intended use of the property. You should inspect the records of the property itself to assure there are no offending easements before signing the contract; or, include an escape clause in the contract in the event such easements are discovered.

Termite certificate
The contract should provide for a termite inspection and for remedies if termite damage is found.

Warranty of condition of contents
Seller should warrant that all plumbing, plumbing fixtures, water heater, electrical wiring, stove, air conditioning system, heating system and all other equipment, appliance and mechanical and electrical apparatus, whether listed or not, will be in good working condition at time of closing. Exceptions should be noted in the contract.

What stays and what goes
If there is any doubt you should itemize what items are included with the sale of the house. For example, rugs, carpets, drapes, blinds, curtain rods, refrigerator, dishwasher, storm windows, TV antenna, stove, microwave, chandeliers, fireplace door and accessories, barbecue equipment, lawn and garden equipment, wall mirrors, dog house, kennel, outside storage shed, swimming pool/spa equipment, etc.

Good faith contingencies
The contract should provide the parties will deal in good faith.

Financing
If you have to borrow money to pay for the house, you may want an escape clause that cancels the agreement if you cannot obtain the necessary financing at a satisfactory rate.

Sale of your house
If you are selling your house while buying another one you may get stuck paying mortgage payments on both if your current house does not sell in time. To avoid this, your contract should be contingent upon selling your house by a specified date or the deal is off.

OTHER PRECAUTIONS
Inspect the house
Examine the condition of the house. Ask about defects. Does the basement leak? Does the roof leak? Are there any known structural problems? You have a right to know. If you prefer, a professional inspector can be hired for a relatively small fee. Make sure you engage the inspector. Relying on the Seller's inspection may limit your remedies if there is a post closing problem. Also, inspect the house just before closing to assure everything works and the house will be delivered according to the contract. It is much easier to correct a problem before the money changes hands. Seller should warrant in the contract there are no latent defects.

Inspect the land
Will zoning restrictions affect your use of the land? How is surrounding property used? Is there a common fence with a neighbor? You may want to have the property surveyed to assure your boundaries.

Have your attorney check the title
The Lender's attorney is responsible to the Lender-not you.

Decide how title will be held
Have your attorney explain the differences between individual ownership, tenancy in common, and joint tenancy. Each contains different legal and tax consequences.

Watch out for possible mechanic's liens

This is a lien placed on the property by someone who has recently performed work on, or supplied material to the property and has not been paid. You should confirm that all of these people have been paid. If not, you may be the one who pays them.

Check utility costs
Unexpectedly high utility bills can destroy the most carefully drawn budget.

Check if anyone else is living in the house
Find out if someone rents the property and when their rights as a tenant terminate.

Get the right signatures
Make sure you are dealing with the actual owner, or his or her authorized agent. Also, be sure to have spouses sign the contract.

Nuisances
Ask whether the neighbors are noisy, if there are "barking dogs", if there are any ongoing neighborhood disputes, etc.