Buying a home could be the biggest transaction you make in your life, which is why most people usually get nervous when approaching this subject. First time buyers are usually wary of buying at an inflated price or getting ripped off by dishonest sellers. The key to protecting yourself is to be proactive throughout the transaction by paying attention to details on documents, and having a capable team of experts such as real estate agents, lawyers, mortgage lenders and escrow officers to help you make the correct decisions and protect your interests:
Perform due diligence
Real estate transactions are often hassle-free. Unexpected frustrations, cumbersome document reviews, contracts, tax issues and other proceedings make the process complicated. Here are a few important tips you can use to protect your real estate transaction and ensure your home purchase closes on time and with minimal frustration.
Involve a title company to help look into the history of the house you plan to purchase, so as to unearth any problems that could hinder you from obtaining clear and free ownership. Issues with water connections, tax receipts, industrial pollution, access roads, water and electricity connections and title documents can be overwhelming, so get an experienced title company to follow up on every little detail and ensure that the property is not engulfed in any issues that could slow down or even curtail the transaction.
Consider involving a notary
With so much at stake, hiring a notary to advice you on the transaction and review documents will be money well spent. The notary will first go through the finer points of the transaction, ensuring the property is free of liens and that the seller has a clear title to sell the house. He will then review important documents such as the Agreement of Purchase and Sale, survey certificate and essential inspection reports.
Signed contracts are legally binding, so your notary should be there to ensure you don't sign documents with omissions or errors, and should also ensure the seller's compliance of all provisions in the contract before the transaction is finalized.
Finally, your notary will settle all tax compliance issues, register all final documents including the transfer of title and ensure the closing goes on smoothly.
Get to understand "earnest money"
In real estate transactions, a buyer is usually required to put down a good faith deposit with a title company as proof that they will follow through with the purchase. This deposit known as 'earnest money' is usually sizable, so you should involve a real estate agent to help you understand what the purchase agreement says about the amount in case the transaction collapses or certain contingencies are not met.
For more help, or if you have other questions, contact a professional tax lawyer to learn more.