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Buying a Home Information

Introduction:

    Home ownership can provide you with many benefits; secure shelter, a long-term investment and tax advantages. However, a home is also a major financial commitment. There are ways to avoid costly mistakes that can strain your budget and your patience. Here are a few tips to help you avoid problems when buying a home.


Deposit

Most purchase contracts provide for a cash deposit to show the seller that the buyer is serious. It should contain details about who will hold the deposit and how it will be applied. If you don’t go through with buying the home, you may lose the deposit. Your lawyer can advise you about the circumstances that affect your rights to the deposit.
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Affordability

A home is the largest investment of most Americans. So the first question is can you afford the home you want to buy. At the time of your home purchase, when the legal title is transferred to you, you will have to pay the price for the home and closing costs. Usually the bulk of the purchase price is paid with a mortgage loan. Afterwards, you will need to budget for insurance premiums, maintenance, monthly loan payments, property taxes, utility bills, and repairs. To avoid surprises, examine the seller’s bills to get an idea of the monthly expenses for the home. Also check the age and condition of the appliances, plumbing, roof, structures and wiring since they might need repair after your purchase.
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Closing the Purchase

The “closing” of a purchase contract usually completes the purchase and takes place at a meeting in the office of an attorney, escrow agent, lender, or title insurance company. At the closing, the buyer, seller, and lender sign a deed and mortgage, pay the purchase price and exchange documents. At this time, the buyer may also receive a title insurance policy, a statement of closing charges, and the keys to the house. Your lawyer usually attends the closing to assure that the documents and computation of closing costs are correct.
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Conditions

Any conditions that must be met before you complete a home purchase should be stated in your purchase contract. For example, many buyers make their home purchase contingent upon obtaining, selling their present dwelling or obtaining a satisfactory report from a home inspector. Before you sign a purchase contract, your lawyer can make sure it contains provisions allowing you to cancel the purchase and get your deposit back if your conditions are not met.
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Purchase Contract

In some states, you may need to sign a binder and submit it to the seller to start the home buying process. A binder can be an agreement to sign a purchase contract or the purchase contract itself. In other states, the first document you sign is a purchase contract that contains the purchase price. Purchase contracts are called a variety of names, including deposit agreements, earnest money contracts, purchase agreements, and receipts. You should not sign a binder or purchase contract unless it protects your rights. A lawyer can prepare the document or review a printed form agreement that you receive from your real estate agent.
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Using a Lawyer

A lawyer can help you through the home buying process by preparing or reviewing the purchase contract, advising you about financing and title insurance, answering your legal tax questions, and arranging for the documents necessary to complete the purchase. When you first visit a lawyer, you can ask for an estimate of legal fees and closing costs. You should consult a lawyer before you sign a contract to buy a home. Although a printed form may be used for the purchase contract, your lawyer can make changes that protect you. For example, a change in the form may give you the right to cancel the purchase (and get a refund of your deposit) if you obtain an unsatisfactory inspection report.
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