For most people, buying a home is the biggest financial transaction they ever get involved in. So, naturally you want your house purchase to go as smoothly as possible.
If you are not affraid to ask for help, buying a home does not have to be a difficult process.
Real Estate Contracts
Drawing up a contract for the purchase and sale of a home, and agreeing on the terms and conditions of the sale, has become more complex than ever. Buyers and sellers today are more informed about real estate contracts than ever before. But if something goes wrong, it could cost you a lot of money, or even your house. It is therefore more important than ever before to get sound legal advice from a real estate attorney before committing yourself to any contract of sale. A short interview with your attorney may be sufficient and it may save a whole lot of expence later!
A good professional service from an attorney is not only about the quality of legal advice. It also means prompt attention to your business, availability when you want to discuss something, and good communication to keep you informed about what is happening.
You will find that buying a home starts long before you actually make an offer or even see the property, and it does not finish when you get the keys!
Home Loans
At your first meeting with your real estate agent, you can discuss all the financial aspects of the property transaction. For example, discuss the price range you are interested in, your mortgage requirements, the different packages and incentives available and the expenses you will have to meet as soon as possible.
There are literally hundreds of mortgage and home loan products available in the current financial market. Many real estate agencies are either mortgage bond originators themselves, or they have a good relationship with a reputable mortgage bond originator. They have a close relationship with most, if not all, lending institutions and can arrange your home loan for you.You definitely need an expert guide to see you through the mortgage maze and make sure you get the best home loan out there!
Alterations and Additions
Some alterations and additions to the home you are planning on buying can cause some problems. If you notice that the house has been altered, or extended, you should check whether the current or previous owners obtained proper planning and building permissions.
I've heard horror-stories of brand new homeowners getting notice that a large chunk of their new home was built without approval, and that they have to either knock it down, or get it approved immediately! It might be wise to include a clause in the purchase contract to protect you in such a case.
Making sure that the planning permissions are correct and above-board may be of vital importance when you come to sell your house again one day.
Making An Offer To Purchase
If you decide to take the plunge, your estate agent can advise you on the terms of your offer. The pre-printed Offer To Purchase documents real estate agents use are quite complex documents designed to protect both the seller and the buyer against all the pitfalls of buying a house. It is important to get the Offer To Purchase right the first time, because it becomes the binding Contract Of Sale as soon as the othr party accepts and signs it.
Your real estate agent's expertise and experience in filling in or drawing up contracts are vital here. This is a crucial stage in the whole procedure of buying a home. Your real estate agent should also give you a copy of the contract for reference purposes.
Acceptance
If the seller decides to accept your offer, the real estate agent will inform you as soon as possible. Be careful of official acceptance letters that are attached to the original offer document, though. Sometimes such a letter requires your signature and it is possible that it can include conditions which attempt to modify the terms and conditions in your offer. Conditions like these are sometimes described as qualifications and the acceptance is therefore referred to as a qualified acceptance. This is in fact a counter offer, and not a true acceptance!
Your real estate agen't job is then to discuss the qualifications with you and give you advice about their implications, as with any other counter offer. You have the option to accept, reject or counter the offer. So, it is important that you are informed enough to make a decision. This may lead to further exchanges and communications before both sides are in agreement.
Occupation
Depending on the occupation date set out in the contract of sale, or as negotiated by the two parties, the real estate agent will make arrangements with the seller to collect the keys to the property. The real estate agent will in turn make arrangements with you to take receipt of the keys.
It would be wise to enquire about these arrangement a few days before the occupation date, because real estate agents are human and it is possible that they may forget this important part of the transaction.
Title Deed
Once the contract of sale is signed, the transferring attorneys must carry out a thorough examination of the title deed to make sure that the seller is truly the owner of the property and that his or her right to sell is not restricted in any way. The title deeds also describe the precise extent of the property, any title restrictions that may apply to the property and any other claims against the property.
An examination of the title deed of a property might be necissary BEFORE making an offer, to reveal whether there are conditions of which you should be aware, such as restrictions on business use, or erecting a second dwelling. Title deeds can be quite complex, and your transferring attorney can check them on your behalf.
Local Authority Matters
Before making an offer to purchase a property, you will want to make sure whether there are any planned developments or development proposals which might affect the property. You might have to contact the municipat town planners to get your questions answered.
The real estate agent has an obligation to make any information that may impact on the value or utility of the property available to you. A voetstoots clause will also not indemnify a seller who purposefully misleads you or witholds material imformation. But real estate agents and even the property owners might not be aware of planned developments that may impact the property, or even about defects in the property, so the responsibility to find this out is yours.
Mortgage Bond Registration
Your lender will instruct a registering attorney to carry out the lender's legal work. Sometimes the same attorney attending to the transfer of the property also gets appointed to handle the registration of the new bond. This can save time and money.
The lender will issue lengthy and detailed instructions to the registering attorneys in connection with the loan, which involve a substantial amount of work. The lender requires that you pay for this work. Provided that you have completed your loan application form in good time and supplied the lender with all the information it needs, your lender should be able to send the loan funds in time for the purchase price of the house to be paid.
Mortgage Bond Cancellation
The seller's bondholder will also instruct a cancelling attorney to carry out the bondholder's legal work. If you are very lucky, the same attorney attending to the transfer of the property and the registration of the new bond also gets appointed to handle the cancellation of the existing mortgage bond. This can save even more time and money.
The role of the cancelling attorney is to make sure that the lender's bond is cancelled anly after the original loan has been paid in full. You don't pay for this. This cost is for the seller's account.
Preparing for Transfer
As the date for settlement of the purchase (payment of the purchase price) and transfer of ownership approaches, the transferring attorney must draw together all the strands of the transaction. They must ensure that there are no outstanding queries about the property or the title, that all the necessary documents have been obtained and, if necessary, signed and that your funds (the balance of the purchase price, solicitor's fees, postage and petties and the VAT or transfer duty) and the mortgage funds are in their hands. The transferring attorneys shall also explain to you what will actually happen on the date of transfer.
Transfer Documents
There may be various documents for you to sign in connection with the transaction, the most important being the mortgage bond which secures the loan over your new property. Your transferring attorney can explain the effect of all documents which you have to sign and help you to get them properly signed in good time.
After Transfer
Following the conclusion of the transaction, the transferring attorneys will inform you, and report any details and matters that still remain unresolved - in particular any financial matters which are still outstanding. They will also send the new title deed to your lenderfor safe keeping and report on the transfer.
Bond Repayments
From here on, it is your responsibility to make monthly repayments on the mortgage loan, as agreed in the mortgage bond. If you fail to fulfill your responsibilities to your lender, the lender would be entitled to reposess the property and sell it to try and recoup it's investment.
If the lender is able to achieve a price that is more than the outstanding loan, due interest, penalties and costs, the excess will be paid over to you. But if the lender cannot cover all of it's losses, you may still be responsible for paying back the deficit.
