Buying your first home is an exciting yet intimidating milestone that involves several legal considerations. For first-time buyers, navigating real estate contracts, financing, and property laws can be overwhelming. It is important to find the right professionals who will make this journey simple and reassuring as possible. This article aims to provide first-time homebuyers with an understanding of the legal aspects involved in purchasing a home, helping them make informed decisions and avoid common pitfalls.
An Overview of the Homebuying Process
Pre-Approval and Financing: As you begin your home search, it can be beneficial to secure pre-approval from a lender. This involves meeting with a lender who will assess your financial situation and determine how much they are willing to lend you. This step can assist with understanding your budget throughout your home search.
Offer and Agreement of Purchase and Sale (APS): Once you find a property, you’ll make an offer, typically formalized in the APS, which includes the purchase price, contingencies (like financing or inspections), closing date, and deposit. A lawyer can help ensure the contract protects your interests if you request a review prior to execution.
Home Inspections and Due Diligence: Before finalizing the purchase, conduct a home inspection to identify potential issues. The APS may allow you to renegotiate or back out based on inspection results. A title search is also crucial to ensure the property has a clear title without encumbrances.
Completing the Transaction: The closing process involves finalizing the mortgage, reviewing the closing documents, signing all documents, and paying all outstanding closing costs. Once all signed documents and funds are provided to the seller’s lawyer and the transfer is registered, you will receive the keys to your new home.
Common Legal Pitfalls to Avoid
Underestimating Closing Costs: Budget for additional expenses such as title insurance, inspection or appraisal fees, land transfer tax and legal fees/disbursements.
Not Reading the Contract: Always review the APS carefully with legal advice, this will help prevent any miscommunications throughout the transaction.
Skipping the Home Inspection: This crucial step helps avoid costly repairs and unwanted surprises.
Not Understanding Mortgage Terms: Ensure you comprehend the loan terms when reviewing the documents with your lawyer.
Post-Closing Considerations
After closing, there are still legal matters to address:
Property Taxes: Understand your responsibilities for paying property taxes from the date of closing.
Utilities: Generally, utility companies will only accept change of address/ownership from the responsible parties themselves. Make sure contact relevant companies directly prior to the scheduled closing date.
Common Expenses/Maintenance Fees: If you are buying a property within a condominium corporation, you will be responsible for additional monthly expenses.
Purchasing a home is an exciting process, but understanding the legal aspects is crucial. By navigating the homebuying process with legal knowledge and professional advice, you can avoid costly mistakes and ensure a smooth transaction. Want to learn more? Contact Samantha Machado, Associate Lawyer at Boardwalk Law to learn more: [email protected] / 905.798.5770
