Purchasing a home is usually the biggest financial decision of a person’s life, and there are many different legal implications to look at during the home buying process. There seems to be an endless amount of paperwork to search through when buying a home, and one single mistake can have huge implications on the initial investment. These are three of main legal considerations that people need to think about when purchasing a home.
Taking the Title to the Property
While a single person does not need to worry about the legal aspects of the title to the property, a married couple or any group of people who purchase a home will have a few different options on the table. With a joint tenancy with right to survivorship title, the title of the home will be automatically passed down to another member of the family when the homeowner passes away. This is the perfect way to make sure that a home stays in the family over the long term. Tenancy by entirety is a solid pick for married couples who want to make sure that a spouse’s debt problems will not allow a creditor to come and take a home that is actually owned by two people. Business partners who are purchasing a home together may find that choosing title by tenants in common is the best option because it will allow either party to remove themselves from the investment by selling their share of the property.
Seller’s need to be upfront and honest about the condition of a particular property before putting it on the market. While the specific laws for this kind of thing vary from state to state, the fact of the matter is that sellers who say one thing about water, termite, or any other kind of damage while the reality of the situation is completely different can find themselves in serious legal trouble. While there are known issues that can be protected against when purchasing a home, it’s also vitally important to have a private inspect take a look around the property before any deal is finalized.
One last legal aspect of purchasing a home that is important to keep in mind is title insurance. This kind of insurance can protect the new homeowner in situations where the property lines were not laid out properly or someone else actually has higher ownership of the property when it comes to making certain decisions, such as installing a pool. With title insurance, the entire history of the property’s ownership will be searched to see who else may have claims to the piece of land. In some, although rare, cases, a title insurance claim can actually end up paying off the entire mortgage shortly after the down payment on the property was made by the buyer.
By keeping every aspect of the law in mind when buying a home, a new home buyer can better protect themselves against the common issues that cause huge amounts of stress and financial ruin to people across the country on a yearly basis. It’s important to realize how much money is really at stake when buying a home, so every loose end needs to be tied up before that contract is finalized.
Parry Jacobs is a freelance writer for Cooper | Coons, a Las Vegas based law firm, specializing in estate planning, probate and asset protection.