RESOURCES
Purchase Agreement Secrets – 5 Tips to Save you Money
At times it is easy to become so focused on the sales price of a home, that other areas directly impacting the total cost are overlooked. Following are five tips to review that will save you money in the long run.
1. Title Insurance. This is insurance that protects homeowners and lenders against legal problems resulting from errors in the transfer of property from one owner to another. This protection covers outside claims to ownership in your home or debts tied to the home from a prior owner. Normally, the owner’s policy is provided and paid for by the seller. However, in the event your purchase agreement does not require the seller to provide the owner’s policy, you can buy a policy to protect yourself.
2. Home Inspections. An inspection by a qualified home inspector is highly recommended for all home purchases. This inspection provides protection for one of the largest financial decisions you can ever make – your new home. The right to make inspections should always be included in the purchase agreement. Many times inspections lead to repairs that may be covered by the seller and cost more than the amount paid for the service.
3. Survey. A survey is a drawing or sketch of your property including boundaries, easements and structures. Sellers normally have an existing survey for the property, and are often willing to provide a copy to the new buyer. When you request a survey from the seller, you should indicate that you will accept an existing survey, “if it is acceptable to the lender”. If after you, your buyer’s agent, the title company and the lender have reviewed the survey, and it is not found acceptable, a new survey will need to be taken. Asking the Seller to pay or provide a survey upfront can save you from $150 to $500. A “Lot Survey” will show property lines but is not acceptable for a purchase because it does not show the location of the house or newer improvements such as a garage, swimming pool or pole barn.
4. Rent from the Seller. On occasion the seller will keep possession of the property for up to 30 days after the sale is closed. It is reasonable to ask the seller to pay “rent” for the days they retain possession. You can only collect rent from the seller if it is specified in the purchase agreement.
5. Real Estate Taxes. Real estate taxes need to be paid on every property. The purchase agreement should specify how the taxes will be divided or prorated between the seller and buyer. Your home funding specialist can help you understand the current taxes for the property, new taxes, and how taxes are typically split in your area.
The five items listed above can help you save hundreds or even thousands of dollars in the purchase of your new home. Be sure to consult with your realtor and home funding specialist to take maximum advantage of the savings.
