A Primer on Considerations for the Buyer.
A buyer of real estate must be aware of a number of issues before entering into a Contract of Sale. These issues can include:
Pre-contract tests and inspections
The buyer may elect to conduct a number of evaluations regarding the quality of the house to be purchased, including: a) termites; b) lead paint; c) engineer’s report; d) radon; e) environmental study; f) appraisal; and g) neighborhood study (e.g., New Jersey now requires disclosure of any sexual offenders in the area). Many of these tests will provide key information regarding the house which may be needed for several reasons, including whether the house should be purchased, what items the seller should repair or cure prior to closing, or what concessions should be made in the purchase price.
Mortgage requirements
The buyer may want to contact a mortgage lender or mortgage broker to see if s/he is qualified for a mortgage. The lender may require a substantial down payment or income qualifications. The lender may offer mortgage loans at different rates, based upon the type of property; income or no-income verification; or payment or “points” up-front.
Title considerations
The buyer will conduct an inspection of the title records concerning the property to ensure that the property is free of all liens and encumbrances, and that the description of the property in the Contract of Sale exactly matches the property as listed on the county’s records. They buyer will retain a title company to conduct the search, and will purchase title insurance to cover any possible claims. Various issues may arise concerning title, including: a) Mechanic’s liens; b) bankruptcy; c) Environmental Control Board violations; d) Fire Department violations; e) Certificate of Occupancy issues; f) issues with the “chain of title” from the seller or prior owners; g) tax arrearages or tax liens; and h) Judgments against prior owners. Many of the various title issues can be resolved prior to, or at closing. In some situations, corrective action will be needed to pass “clear” title.
copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.
