Caveat emptor is a Latin phrase that translates to “let the buyer beware.” This term was often used as a short hand statement in real property transactions warning the buyer to do his or her own due diligence, such as conducting research, asking questions, and performing inspections prior to closing the purchase transaction. This warning is still pertinent today. Once the transaction closes, it can be difficult to hold the seller responsible for problems that the buyer may encounter.
Experienced home buyers generally know what to look for when buying property. But what if you are not experienced in buying a home? Here are several tips we suggest that you do (or NOT do) to set you apart from the average home buyer and to help you protect your investment:
- Never waive your right to inspect. Your home inspection and any additional inspections (think: sewer, septic system, roof, fireplace/chimney) provide you with some of the most valuable information you can obtain from an independent party to the transaction. Home inspectors are trained to observe certain components of a home and property and point out issues that you may not otherwise see. These inspections provide you with insight into the condition of the property and give you educated information on whether or not the investment is a good one.
- Review the Seller Disclosure Statement (Form 17). In nearly all real estate transactions, a seller is required to provide you with a Seller Disclosure Statement, also known as a Form 17. The Form 17 contains a list of questions related to the property to which the seller checks a box of either “Yes,” “No,” “Don’t Know,” or “N/A.” Next to your home inspection report, this document is one of the most valuable documents you are entitled to receive in your purchase transaction. When you receive the Form 17, review it thoroughly, make sure that all questions are answered, and make sure that the seller has provided you with all documentation and/or information that was supposed to be provided.
- Know the deadlines in your contract. A savvy buyer will keep track of the deadlines in the Purchase and Sale Agreement. The reason being is so that he or she can keep up with the transaction as it moves through escrow. There will be varying deadlines in the contract, such as, counteroffer deadlines, inspection deadlines, financing deadlines, and various review deadlines. Many of these deadlines provide the buyer with opportunities to back out of the transaction without penalty. However, before backing out, you should always talk to your agent and/or an attorney first.
- Remember your agent’s motivation. Real estate brokers provide important services to their clients. However, they also earn a respectable commission once a transaction closes. As such, keep your broker’s motivations in mind when moving through the buying process. If, at any time, you feel like you are being pushed into something you are not comfortable with or something just isn’t right, remember that you have every right to say stop until you get the answers you need to feel comfortable moving forward.
- Ask questions. If you are unsure about anything related to the transaction, ask! The more informed you are about the property, the better prepared you are for making one of the most important decisions you will make in buying a home. Ask questions about the neighbors’ interactions with your property and any upgrades/remodeling that has been undertaken on the property or adjacent to it. Truly, there are no stupid questions, only questions that should have been asked, but weren’t.
Carpe diem!
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