March 21, 2019 8:00 am
It’s finally March, the first month of spring and the start of house-hunting season. Buying your first home is a big deal. It’s a large financial investment, and it’s often an emotional commitment. No surprise that trying to navigate the homebuying maze can be a source of tension between you and a loved one. To avoid those pitfalls, consider hiring a good real estate lawyer who can make the process much easier for all involved. We’ve had many clients and friends say, after the fact, “I wish I’d hired a lawyer” or “I am so glad we hired a lawyer.”
Whether or not you choose to have a real estate attorney represent you, here are some tips to help guide your house hunting:
- Test-drive the neighborhood. Before committing to any property, you should spend time in your potential future town. Chat with people who live there. They can provide great insider information. Where is the best grocery store? How good is the school system?
- Consider commuting time. How far is the home from your workplace? A long commute can quickly take a toll on your energy, which may impact your professional and personal lives. Another travel alternative to consider is the commuter rail or other public transportation. Is there a train, subway, or bus stop near your potential new home?
- Do a title search. Make sure you get a title rundown to see if there are any missing links. Not confirming that you as the potential buyer will have good title is like committing to seats on an airplane, then realizing before the flight that someone else had reserved those seats before you. [For example, we once heard of a homebuyer who did not know there was a 100 year old easement in his own backyard, which restricted his use! ] See our February Sidebar Blog for the importance of title rundowns.
- Have the home inspected. Once you’ve made an offer, make sure an inspector comes through to inspect the house. The last thing you need is to buy a home and then discover health hazards such as a mold, termites, a leaky roof, or a water heater or furnace that needs repair. These are only a few examples of large but avoidable expenses, so long as they are discovered before purchase.
- Research your access to a mortgage. Unless you plan to pay cash, make sure you get pre-qualified for a loan at the bank. Don’t waste your time looking for a home, only to stall the closing process because, for whatever reason, the bank will not extend you a loan.
- Investigate energy options and costs. The choice between whether your home runs on oil, gas or propane depends on your preferences. For some people, oil is arguably safer. For others, propane is more energy efficient. For still others, natural gas is preferable, although some rural areas do not have gas lines.
- Determine your property tax liability. As you may know, the deduction for state and local taxes (the “SALT deduction”) is now capped at $10,000 per taxpayer under the new federal tax law. For some people, real estate taxes alone total $10,000, or more, which they were able to deduct on their income tax returns prior to 2018. Make sure you find out what the real estate taxes will be on the property before you buy. Taxes can vary widely in each municipality. Unless the federal tax law changes, your deduction for real estate tax may be limited.
- Find out about estate issues. Ownership by deceased persons can pose another title issue. We’ve represented home buyers and sellers whose scheduled closing dates were stalled due to title issues involving ownership by deceased individuals whose estates were never probated. This is another important reason to run a title search before you decide to purchase the home.
- Understand the Purchase and Sale agreement. The contract that is used when transferring ownership of real estate is called a “purchase and sale agreement.” Make sure the purchase and sale agreement provides contingencies for title, inspection, Title V septic, if applicable, and a mortgage contingency clause. A purchase and sale agreement that includes a mortgage contingency clause should provide that if the buyer cannot get financing within a set period of time, the buyer can back out of the deal.
- Research pros and cons of septic tank vs. sewer. The costs differ between the two choices; if you purchase a home that uses a sewer system, you will pay the city or town’s water and sewer charges on a regular basis. A septic tank has costs associated with its repair and maintenance. Repairs to a sewer system are performed by the city or town.
- Know your water supply preferences. Like the septic vs. sewer question above, some people have preferences regarding a public water supply vs. a private well. While you may have to pay a water bill when on a city water supply, there are also costs associated with a private well, such as periodic water quality testing and repairs to the water pump. Also note that during a power outage, the water pump will not run, so you will not have water in your home.
- Do your homework about solar panels. Will you install solar panels or buy a home that already has them installed? Do the sellers of the home lease the solar panels, and if so, what happens to the lease when the house is sold? Many homeowners in Massachusetts are making the effort to be more energy efficient. Cost of solar panels is an important consideration. Homeowners may choose to own the equipment or lease the equipment, but be very careful in reading the fine print when entering into any agreements to lease. Leasing creates new issues for you to consider; for example, know how leasing impacts, if at all, your ability to refinance your home, or what happens if you choose to move.
Feel free to contact us for a personalized consultation before you begin your home-buying process.
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Image Credit: Alturas Homes