Buying a home means signing a contract, and it means signing multiple contracts if you are financing your purchase, hiring a builder, or doing many of the other things that homebuyers do. There are other legal considerations involved in buying a home in Washington as well. And in order to protect yourself as a purchaser, you need to make sure that you do not overlook any issues that could create problems down the line.
This is not meant to scare you – most home purchases go off without a hitch, and most residential property owners never encounter legal issues after they close. But, if an issue happens to arise (and they do arise from time to time), it will be important for you to have the necessary protections in place.
What Are the Legal Issues Involved with Buying an Existing Home or New Construction?
So, what are we talking about? Here are seven important legal considerations for buying a home in Washington:
1. Title to the Property
First, and perhaps most importantly, you need to make sure that you will receive clear title to the home (unless you are knowingly preparing to buy a home with title issues). Before buying a home, it is important to order a title search, which will identify many (but not all) types of title defects.
Since a title search isn’t fully comprehensive, it is also important to purchase title insurance. This insurance will provide financial protection in the event that someone else claims to own the property you purchased. This does not happen often, but it can occur in situations where, for example, a piece of property was transferred by will or pursuant to a divorce and the transfer was never formally recorded in the county title records. Before signing your purchase agreement, it is a good idea to make sure the agreement includes appropriate title ownership representations and warranties from the seller as well.
2. Easements and Rights of Way
Along with potential ownership issues, it is also important to make sure that no one else has a right to use the property you are buying (or at least to make sure you are aware of any pre-existing rights). These rights can take the form of an easement or a right of way.
Easements and rights of way may be granted for a variety of different reasons. For example, a home owner may grant an easement to an adjacent property owner in order to allow access to a part of the homeowner’s property. Or, an easement may exist to allow the county or a utility company to install and maintain critical infrastructure that rests on a portion of the property. Whatever the case may be, an easement or right of way isn’t necessarily a bad thing, but you need to make sure you know what you are buying and that you are comfortable with (or proactively address) any rights that exist.
3. Seller Disclosures
By default, homeowners are required to provide seller disclosure statements to prospective buyers. However, Washington Law gives buyers the option to waive receipt of a seller disclosure statement (with a limited exception for certain environmental disclosures), and some sellers will attempt to avoid making disclosures about their property.
As a prospective homebuyer, you generally want to have as much information as possible. If the seller knows something about the property that he or she does not want to tell you, this could be a bad sign. Sellers can face liability if they fail to complete the seller disclosure statement to the best of their ability; so, the form you receive should be complete. However, in addition to conducting your inspections, you may want to conduct various other forms of due diligence as well.
4. Financing, Inspections, and Other Contingencies
Financing, inspection, and certain other contingencies are fairly commonplace in residential purchase agreements. However, the specific language can be important. Aside from establishing deadlines, you will also want to ensure that your agreement establishes clear rights in the event that you need to exercise one of your contingencies.
5. Unclear and Inconsistent Contract Terms
Unclear and inconsistent contract terms can create situations in which it is not clear who is in the right and who is in the wrong. This is the opposite of what a contract is supposed to do. As a homebuyer, you want to be as certain as possible that (i) the seller cannot back out of the deal, (ii) you have the ability to back out if you discover something unexpected, and (iii) you are getting what you are paying for. While much of the language in your residential purchase agreement will be fairly standard, there are still a number of provisions – including provisions completed by the seller – that can create issues if they are not worded properly.
6. Border Disputes, HOA or Condo Association Violations, and Other Issues
Disputes with neighboring homeowners, outstanding homeowners’ association (HOA) or condo association violations, and various other types of issues can create unexpected headaches for homebuyers as well. While, once again, you should be made aware of these issues prior to closing, you will want to avoid making any assumptions or overlooking any potential issues that could lead to unnecessary costs and headaches.
7. Failure to Close
What happens if the seller doesn’t show up for closing? What happens if you do not exercise any of your contractual contingencies but another unexpected issue prevents you from closing on your new home on time? Ideally, your closing will go off without a hitch – and, again, the vast majority of closings do – but, if it doesn’t, you need to make sure you know your next steps and are able to react accordingly.
Speak with a Tacoma Real Estate Lawyer at Bolan Law Group.
Our Tacoma real estate lawyers advise and represent local home purchasers in all aspects of the homebuying process. If you are preparing to buy a home in the Tacoma area, or if you have run into issues with your residential purchase agreement, we invite you to call us directly or contact us online for a confidential consultation.