Over the past several weeks I have received a steady stream of calls from people who are interesting in buying real estate. Whether it be a home for their family or commercial property for the operation of a business, the important points to consider are largely the same. Consider all of these seven points before purchasing real estate:
1. Work with a good Realtor.
2. Get an Inspection. Once you identify a property to buy, get a professional inspection to make sure that you all the issues that may impact the value.
3. Read and understand the purchase and sale agreement! If you put in an offer and it is accepted by the seller, you will need to enter into a purchase and sale agreement. The terms of the purchase and sale agreement are very important because they will control the ultimate transfer of the property from the seller to the buyer. If you don’t know what the terms mean and don’t know if any important terms to protect your interest are missing, consult with an attorney.
4. What are your escape options?
The terms that allow you to walk away from the transaction and get your deposit back (which is typically thousands of dollars) under specific circumstances constitute the most important provisions of the purchase and sale agreement. Make sure the terms to get your deposit back are clear.
5. How will you take title?
If the inspection looks good and both sides sign the purchase and sale agreement, you then have to decide how you will take title at the closing. Simply put, you need to determine whose name will be on the deed. Will it be you and your spouse? Will it be you and your business partner if you are buying this for your business? Should you set up a corporation or limited liability company to own the real estate? If you don’t understand all the implications resulting from how title to the property is held, discuss this with your attorney.
6. Look out for unique issues, e.g., Easements. Does the property you are buying have the benefit of an easement over the neighbor’s property? Or does your neighbor have an easement over the property you are buying? Easement disputes can be very frustrating to land owners and you need to fully understand the benefits or burdens of any easement BEFORE you complete the purchase.
7. Are there limitations on future use? If you are buying the property with a specific purpose in mind, make sure you investigate whether that use is possible before you buy the property. If you want to operate a business on the property make sure the zoning allows for such use. If you want to put in a pool you need to make sure there are no restrictions to prevent you from installing a pool. The time to learn about any limitations that may impact you is BEFORE you buy the property.
While this does not represent an exhaustive list, it does address some of the more important issues to consider when purchasing real estate. If you are considering the purchase of real estate, talk to your attorney. If you don’t have an attorney, give me a call to set up a no-cost consultation to review the issues to make sure your interests are protected.
This column constitutes legal advertising, and is designed only as an information service. While every effort is made to ensure the accuracy of the information, it should not be relied upon as legal advice. Legal advice is only provided after a careful review of the specific facts provided by a client after formation of an attorney-client relationship.