Five Legal Mistakes to Avoid When Buying or Selling a Home
When you're buying or selling a home, there are many important legal issues, large and small, that you should be aware of. To begin with, residential real estate is not an uncomplicated process. When such a major investment is transferred from one party to another, even the subtle legal details need to be taken care of. If not, then they can turn into major problems if not handled correctly.
It is essential to be informed to properly protect yourself in the process of buying or selling a home.
Because there are many legal issues to consider, your first step is to consider choosing reputable and experienced professionals to represent your interests. When selecting your Real Estate Agent, ensure that you find someone who has extensive experience with the process. They should also refer you to a local Real Estate Lawyer who can ensure your interests are protected.
1. Site Survey & 2.Title Search
Home buyers have the right to add clauses to view and approve the site survey, title search and the property disclosure statement. Home owners, you should be aware of the implications of these clauses. If you cannot find your site survey, then you may be asked to buy one. If your title search has pending litigation or claims affecting your title, then the buyer can opt not to purchase your home. It could be in a Land Use Contract, or your ex-spouse may have put a lis pendens (pending lawsuit) on your title and you will be required to rectify any claims prior to selling.
3. The Property Disclosure Statement
In the event your Property Disclosure Statement does not prove that your home has a clean bill of health, the buyer may choose not to continue any further with the purchase.
When filling out your Property Disclosure Statement be sure to review each question & if there are issues, then either correct them or disclose them. With between 40 - 60 initials and signatures needed, you want to be sure everything is correct.
4. Home Inspection Clause
Some contracts collapse due to the wording of the home inspection clause. In this clause, the buyer has the right to collapse the offer if dissatisfied with the outcome of the home inspection by their home inspector - even for the smallest of issues.
In some cases, this clause is used as an escape, where rather than making some minor repairs, this legal loophole is used if the buyer has a change of heart. Meanwhile, the seller lost both time and money, may have declined other offers and missed the opportunity for other offers.
Secondly, now that an offer has collapsed due to the inspection, the home now may have been unfairly labeled as a "problem house" which could cost the seller in terms of the dollar amount in future offers.
5. Subject to the Sale Offers
If you find yourself working with a subject to the sale of another home, then you need to ask yourself the following
- Will the other property be priced at market value? Will it be for sale by owner or marketed by another realtor?
- How do you know that the Realtor working with the buyer has the ability and experience to sell the buyer’s home on time? (Does the Realtor have a team and a proven home selling system? If not, then it may not be in your best interest to accept this kind of offer.)
- Does the offer contain a 12, 24, 48 or 72 hour clause so your Realtor can continue marketing you property and look at other offers?
- By accepting this kind of offer, will other Realtors actually consider showing your home when they find out you, as the seller, have accepted a Subject to Sale offer?
By being aware of these and other legal issues, and by getting advice from an experienced Real Estate Professional, you can protect yourself against unnecessary cost and selling stresses.
For a Free Buyer’s or Seller’s Consultation call us at 604-859-2341 or fill in the form below.