Closing on your first home will be the culmination of years of saving and months of searching. However long you have dreamt about turning the key in your own home, you need to proceed through the closing process with care.
The homeowner and realtor will be eager to complete the sale. It can leave you feeling pressured to move fast. Yet, several things could cause you problems if you do not anticipate them.
Contingency clauses are key when closing on real estate
Contingency clauses allow you to retreat from the purchase if specific problems arise. Here are a few reasons you may need them:
- You cannot secure the funding: Most first-time buyers require a mortgage. If your work situation has changed since the lender first offered you a mortgage, they may choose to retract their offer. Alternatively, they may alter the terms, making it unaffordable to you.
- There are problems with the title: It is crucial to check who owns the property and whether they have the right to sell it. If you discover an ownership dispute or a lien on the property, it might be best to walk away or wait until the seller resolves the issues.
- There are problems with the property: Never judge a book by its cover. A fresh lick of paint and some carefully positioned furniture can hide a multitude of flaws. There may be serious structural issues hiding. A complete survey is crucial to ensure you know the true state of the property.
Real estate contracts need careful revision before signing, and you need to understand the legal implications of everything the agreement contains. Otherwise, your home-owning dream could end in a nightmare.