Selling or buying a house may seem like a big transition filled with excitement, anxiety, and a bit of stress. However, with the right knowledge of undertaking the procedure, the process is fun and easy.
This article looks at the top legal mistakes you can make when buying or selling a home and how to avoid them.
Legal mistakes when selling a house
- Not expecting expenses that come with home selling
The worst mistake a home seller can make is not expecting any expenses. Some of these expenses include;
- Agent commissions
- Closing costs
- Staging costs
- Home inspection costs and repairs
- Selling your home by yourself
Another big mistake that sellers make is going the ‘For Sale by Owner’ route. Not hiring an experienced real estate agent may save you on agent commissions. However, not hiring one may also mean you lose the chance of making even more money. Real estate agents are properly informed about selling a home and other important legal issues, and hiring them will be a big plus to your sale.
- Wrong pricing
Pricing a home is quite tricky. If your price is too high, you run the risk of turning away serious buyers. Pricing it low means you miss out on an opportunity to make more money in profit. The best way to counter this is to hire a local real estate lawyer and ask them to compile a comparative marketing analysis. This will show you how much houses in the area are selling for. You make a comparative decision on your price that buyers won’t turn down.
- Hiding major repairs
Most of your buyers will likely find a lawyer to help them understand a purchase and sale agreement. In many cases, buyers will request that the agreement include a home inspection clause. If you have skimped on house repairs before putting your house on the market and major problems arise after a house inspection, your buyer/buyers may opt-out of the deal. To avoid these kinds of issues, make sure that before listing your house in the market, you hire experienced professionals to do thorough checkups and maintenance on your house for your buyers.
Legal mistakes to avoid when buying a house
- Not preparing enough
When you go house hunting for yourself and your family, you need to be aware of your debts, obtain preapproval for finances, and understand your assets. Understand your family’s living requirements like how many rooms you would need, the backyard size, proximity to schools, health facilities, and transportation.
- Buying beyond your means
When house hunting for the perfect house for you and your family, you might be carried away by a house that looks like it has everything you and your family need, even though not in your price range. There may be additional interest raise rates in the future at some point. Therefore, your house purchase should remain within your planned budget until you can afford an upgrade without overstretching your finances.
- Choosing a mortgage that doesn’t suit your needs
Having your loan preapproved before you go house hunting is the best thing to have in check when choosing to buy a home. Talk to your lending institution and know exactly how much they will be lending you. Of importance is to have your finances in check and ensure that all your real estate transactions will be fully covered by the mortgage you choose.
- Considering only the price
When buying a property, buying cheap may mean saving money. However, price is not the only thing to consider when buying a home. Some other things to consider are:
- How easy will it be to sell the house in the future if you choose to?
- How close is the house to facilities like schools, hospitals, and transportation?
- How safe is the house’s location, and what’s the crime rate like?
Once the house you find checks all the boxes, they have a local real estate lawyer compile a comparative analysis of how houses in the same neighborhood are selling and make a smart and educated offer on the property. Make sure you are getting value for money.
- Not protecting your interests in the contract for sale
Once a contract for sale is signed, there is a very high chance that sellers won’t agree to any changes made later, especially with a fully executed contract. Therefore, ensure that all your interests are protected and covered in the contract before signing it.
Final thoughts
Learning how to buy and sell a house is crucial. It is important to be prepared financially and mentally for any scenarios that may arise during the process. It is better for the house you’re buying or selling to sit in the market but ensure that you have it right by the end of the process. You can avoid many mistakes that buyers and sellers make when buying a home with the right knowledge. This article looks at some of these mistakes with an example of a seller agreement to look at.
