When my husband I decided to start a business, we didn't think about the legal aspects of doing so. We didn't realize that purchasing business insurance, getting building permits and making investments all required some type of legal advice. But after speaking to a close friend, who also happens to own a small business, we contacted a business attorney. Now, we have the legal smarts to make the best decisions for our business, as well as the legal representation in case something happens to our company. I hope that you find my blog helpful and informative for your own business. It's a great resource for finding the legal advice, resources and guidance you need to get your company up and running.
Buying a new home is a big investment. The average home sold in the U.S. in January of 2014 cost about $188,900. If you're thinking of putting in a bid for a new home or applying for a mortgage, you definitely need to make sure that all of your bases are covered. Unfortunately, a real estate agent may not always have your best interest at heart since he or she may be more interested in closing a deal. Because of this, it's crucial that you hire a real estate attorney to go over the real estate purchase contract with you. More often than not, your attorney may recommend adding several provisions to protect your best interest. Here are 3 particular important provisions that may wind up saving you a fortune.
A Mortgage Contingency Provision
Whether your real estate purchase contract has a mortgage contingency provision in it is crucial, as your ability to pay for the real estate may be based on whether you can get a mortgage or not. A mortgage contingency provision will release you of your obligations to purchase the property should you not be able to get a mortgage loan at a specific interest rate within a specific amount of time.
While almost all real estate purchase contracts will have a mortgage contingency provision in it, the wording of this provision is of absolute importance. You need to get a real estate attorney to carefully go through the provision to make sure that there are no loopholes that will hold you responsible should you be unable to get a mortgage. A real estate attorney will also give you more information regarding the specifics of what you must do in order to meet the requirements set in stone in the provision.
Provision Regarding Seller Responsibility of Property Up Until Closing Date
Until the keys are placed in your hand on the closing date, you should not be held responsible for any of the expenses that the property has incurred. This is particularly important if you will be finalizing the real estate purchase with the seller or a real estate agent soon, but will not be moving in to the property for some time. Your real estate attorney will definitely want to include a provision that absolves you from expenses, like property tax, home insurance and even utility bills, up until the closing date.
The provision will need to clearly state that the seller is responsible for these expenses. In addition, the provision should also state the length of time that the seller will have to pay off these bills. In general, most attorneys will recommend requesting the sellers to have paid off all of these bills on the closing date.
An Inspection Contingency Provision
If you haven't had the property properly inspected yet, you might not want to jump the gun and finalize the transaction because there might be hidden problems present. Most real estate attorneys recommend including an inspection contingency provision into the real estate purchase contract. This way, the contract will be voided in the event that the building inspector finds any problems with the property.
Naturally, it is important that the provision clearly states the types of problems that would allow for the contract to be voided. For example, the provision might state that the presence of specific minor defects, like air bubbles trapped in the paint of exterior walls, will not be sufficient for voiding the contract since they do not affect the structural integrity or safety of the home; however, major defects, such as compromised support structures like collapsing concrete columns, will be sufficient for voiding the contract. The provision will also need to clearly state how many days you have after the closing date to get the property inspected.
Before you close on a property, make sure you get a real estate attorney to go through the real estate purchase contract with you to make sure that you are protected legally. The real estate attorney may recommend adding different provisions or may recommend changing the wording in existing provisions in order to protect your legal standing.