Expert on title and settlement

Posted on February 23, 2008
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by Shane Smith
PURCHASING HOMES WITH TITLE COMPANIES

The purchase of a home is major milestone in many people’s lives. Most people spend their life’s savings on the purchase or go into debt to purchase their dream home. Hence it is crucial that the title of the home is clear in all respects. Once you take possession of the house it should come only to you and should not in any way involve you in any legal wrangles. Hence it is imperative to check all the documents pertaining to the house.

Before going in for the purchase you need to check the purchase agreement which is actually the contract between the buyer and seller of the home. Before you sign the agreement just make sure that it includes everything important. If the agreement is in writing it is enforceable. When you buy a house you are also buying the land and all structures on the land. In most purchases the buyer makes an offer by signing the agreement and giving it to the seller. The buyer can agree to the agreement or ask for changes. When both sign the agreement then the parties have a binding contract.

If the buyer makes a deposit, it will be held with the Title Company, or real estate agent or lawyer. If any condition is not accepted then the money will be returned to the buyer.

Most buyers go in for financing through loan or mortgage, or on land contract. With the land contract the buyer makes down payment and pays the seller the balance over time or they can go in for a lease with a purchase option. This permits the buyer to rent the home for a period of time before deciding to purchase it.

The purchase agreement should allow the buyer to inspect the building thoroughly, for which he can employ the services of a professional inspector who will check the property for structural defects, roof and basement leaks, heating, mechanical, electrical and plumbing problems, and environmental matters such as the presence of asbestos, radon or nearby contaminated property. The septic system or well should be checked to see if they are in working order.

Most purchase agreemnts sell the home in as is condition and the buyer is liable for any problems after the closing. The laws of some states ask for the seller’s disclosure statement which should be made before the purchase agreement. Disclosure statement tells what the seller knows about the condition of the property. If the home comes with any lead based paint then the laws requires this to be disclosed also.

When you buy a home you must make sure of clear titles over the property. Problems with the title could include rights of tenants, unpaid taxes, existing mortgages and land contacts, or dower. Titles may also be affected by easements or building and use restrictions which limit how the property can be used.

The deed is the legal document used to transfer the title of the property. A warranty deed is generally use while selling the home, with this the seller guarantees certain things related to the title of the property. Before closing the agreement the buyer should receive the title insurance which lists recorded easements, building and use restrictions and liens on the property. If there are any problems with title, the seller should correct those problems before closing.

If any further problems occur then you can seek the advice of a lawyer.

Shane Smith is the author of this article on Expert on title and settlement. Find more information about Expert on title and settlement here.