Buying your first home is an exciting prospect, but it can also be confusing and stressful. Having saved for years, you want to be sure you spend your money wisely.
There is a lot to learn about the real estate process, from understanding how much a mortgage will end up costing to working out how low an offer you can make without insulting the seller. Yet nothing is as crucial to understand as the closing process.
Contingency clauses protect you when closing on real estate
When you are ready to close, you need to protect yourself from anything untoward happening during the final stages. You need to include the appropriate contingency clauses in the contract to allow you to withdraw from the deal if you spot a last-minute issue. Here are some of the things that could go wrong, for which you need contingency clauses:
- The bank will not lend you the money: You should have talked to a lender and got their initial approval for a mortgage first. Yet, problems can still arise once you go to finalize the deal. The lender may increase the interest rate or refuse to lend because you have changed jobs and no longer have the same secure income.
- The house has faults: Most buildings have a few flaws, which is fine as long as you are aware and understand their extent. Carrying out detailed surveys is essential.
- The property has a title issue: When you buy a piece of real estate, you need it to have a clear title. There are legal ways to clarify things if you are unsure.
Take time when buying your first home and get help to ensure a dishonest seller does not take advantage of your enthusiasm and lack of knowledge. It may cost a little more time and money to do things properly, but it could cost much more if you do not.