what not to do when buying a home

The first home that I bought with my husband was a very difficult learning experience. We purchased the house as-is and worked directly with the owners instead of using a real estate agent. About a year later, we learned why the former owner sold the house for so much under market price and why they didn't want to use a real estate agent to sell it. Our blog outlines the many mistakes that can be made if you purchase a home without a real estate agent or attorney working with you. Hopefully, our mistakes will help you learn what not to do.

Understanding Legal Title Restrictions When Purchasing A Home

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Purchasing a home involves more than just buying the building and the land it's on. When you buy a home, you also receive the title to it. This gives you certain rights, the most obvious of which is the right to use the home and property. But titles may also have restrictions on them, and it's important to understand the title you're purchasing and what restrictions may come with it.

This is an area where having a real estate attorney can be very useful. While a title company is important (and usually required) when it comes to finding out the specifics of a title, an attorney can help guide you through dealing with any issues that the title company might find.

Covenants

Covenants are agreements that restrict how your property can be used. They can range from usage clauses, such as banning the raising of livestock, to aesthetic requirements, such as mandating what color you can paint your house. Some neighborhoods have very strict requirements based on their overall theme or design. However, it is possible to renegotiate covenants; if the covenant is illegal, it may be contested in court.

Easements

Easements are rights to use someone else's property for something specific. For instance, utility companies often have easements on properties that allow them to run gas lines, electrical poles, or other utilities through private property. Neighbors sometimes have easements as well: neighbor A may give neighbor B the right to drive down a road through A's property in order to reach B's property.

It's important to know of any potential easements because it's illegal to interfere with them. If you're unhappy with an easement, however, you can discuss with a real estate attorney, like those at Levin & Levin, LLP - Attorneys at Law, how it might be removed. Easements may also affect your ability to build outbuildings; for instance, if you build a shed where a gas company has an easement for a gas line and they later need to come and repair the line, your shed is interfering with that, and you will have to pay to have it taken down.

Liens

A lien is a legal right that one person or entity may have on another person's property in order to settle a debt. For example, the most common type of imposed property lien comes from unpaid taxes. If a property owner has unpaid taxes, either state or federal, the government can place a lien on the property. On the other hand, a mortgage is a type of consensual lien where a property holder agrees to put up their home and property as collateral.

Liens can be complicated and their specifics can vary from state to state, but most banks won't give you a mortgage on a property which already has a non-mortgage lien. Mortgages are a special case as it's very common to buy and sell properties with existing mortgages.

Remember, if you agree to purchase a property with an unpaid lien, the creditor – the holder of the lien – can most likely pursue you for payment of the debt.

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26 June 2015