You must know the essential basics of real estate law. Dilip Barot, one of the most popular real estate entrepreneurs of America, believes it is vital that agents understand real estate laws better to avoid dreary lawsuits in their careers. Also, it is equally essential for the buyers of real estate properties to have a thorough idea of real estate laws for flawless transactions. Interestingly, the basics of real estate law are not complicated.
Let's explore some crucial basics
Pre-Qualification: Before you decide to make a real estate purchase, you should know how much you can spend. You must work with your lender to determine the amount that you can afford. Doing that, they'll provide you with pre-qualification documents that you should present to the seller or the real estate agent. Dilip Barot highly recommends having an accurate idea of these papers so that you don't have to face hassles moving forward and end up filing a lawsuit against the agent. If you are pre-qualified for a mortgage, sellers will look upon you more. So, it's beneficial to do so.
Mortgage: Not everyone can plunk down massive sums of cash anytime and buy a house. Instead, most of the buyers prefer to put down a deposit and finance the rest. That finance generally comes in the form of a mortgage. This is one of the best ways to ensure your property buying process is a smooth one. The mortgage is nothing but the sum that you receive from the bank or other financial institution, and you promise to pay it back over time with interest. The mortgage document is the legally binding contract that consists of all the details of your agreement.
Offer to Purchase: Let's assume you've found your dream house, and it's in a price range you know you can afford. The next step you should take is to make an offer. The best thing about being the buyer is that you can decide how much you want to pay. To discuss the price with the real estate agent can be a fair idea as they can help you get a better idea of the actual valuation of the property based on the attractions it offers. Dilip Barot says such a conversation will help you understand the agent's intentions better initially. This will save you from having any hassle with the agent later on and even avoid filing a lawsuit against him.
Moreover, the seller's listing price might not match with the price you propose. That's okay, but you get to make the offer you feel is fair. Ultimately, you submit in writing, along with an earnest deposit. This deposit is nothing but a small and refundable amount of money that demonstrates you are serious about the purchase.
Purchase & Sales: If the seller accepts the offer you have made, the next legal document you should sign is a Purchase & Sales Agreement. The items of the P&S are who's selling, who's purchasing, the cost of the property, the deposit, the sales commission, the mortgage amount, property inspection and walk-through details and dates about when the deal will be due and done.
Closing: The closing is when all the legal documents are placed together with all the parties involved in the real estate transaction. At last, you'll sign settlement agreements, and the seller will transfer the financial document and property deed to you, the buyer. Just ensure to remain cautious, there is a discrepancy happening in the entire process so that you don't have to deal with any strict legality like a lawsuit.
I hope the above information helps you deal with real estate laws and buy a house effortlessly.