Purchasing or selling a home is probably one of the largest financial transactions most people will make in their lives. While real estate transactions often go smoothly, there is no way to know what situations may present themselves when you begin the transaction. Having an attorney to protect your interests is a relatively small investment when you consider the problems which might be encountered and which can be avoided with competent legal advice. For the most satisfactory results, consult with an attorney who concentrates his practice in real estate transactions.

The purchase/sales contract is the document by which the purchasers commit themselves to purchase the home and the sellers commit to sell. It should contain all of the terms of the sale. Although some people use "form" contracts, almost every contract has its own individual provisions, which effect the rights and obligations of the purchasers and the sellers. Both should take great care to read and understand every provision in the contract. If there are any questions, the parties should seek professional advice.

Then, before signing any documents or depositing any money preparatory to entering into a real estate contract, purchasers should consult with an attorney or a Real Estate Agent of his choice to ensure that his rights are properly protected.

How much you can afford

Most people have a general idea of how much they feel comfortable spending. It's equally important how much the lender calculates you can afford. Evaluate your financial situation as the lenders do. Typically, your total monthly housing costs should not exceed 30 percent of your gross monthly income.

Ask how your lender determines the total monthly housing cost figure. It usually includes your mortgage principal and interest payments, property taxes and hazard insurance (PITI). Determine how much your financial institution is willing to lend you. Call on your sales associate for help during the prequalification process. Know how much you can afford in monthly payments. Lenders factor in sales price and down payment, but place more importance on how much you can handle monthly.

What kind of house

When buying a house, you'll want to define your needs, tastes and preferences. By discussing this now, you'll save plenty of time in the house-hunting process. Your sales associate will show you only the houses that fit these requirements.

Describe the style of house you like, whether it be two-story, contemporary, ranch or something else.

List your priorities in home features, such as a two or three-car garage; gourmet kitchen; a family room or a formal dining room.

Think about your lifestyle. If you don't like yard work, ask your sales associate to show you condominiums, townhouses or garden homes with smaller yards.

Where to buy your house

Bricks and boards may determine the cost of a home, but a neighborhood determines value. Consider the identity of the neighborhood. The overall impression given by an area is key to its value. Drive through and around the neighborhood. Valuee is enhanced by other well-aintained properties. Conversely, be cautious of areas with unkept yards and homes, and businesses mixed in with residences. Ask your sales associate about the property tax assessment in the area, including any special assessments or pending bond issues. Pay attention to neighborhood zoning. Good residential communities are zoned to keep out commercial and industrial users. Ask about other regulations in the neighborhood, such as on-street parking.

New house from builder

Because many people who buy a home from a builder are not represented by a realtor or an attorney, they often sign a contract without professional advice. The most important issue when negotiating with a new homebuilder is to insist on a contingency for attorney review of the contract. (A builder will usually agree to a reasonable time for this. If he is opposed to such a contingency, you should be concerned!)
Many homebuyers come to us after they have signed a new home contract. It is usually too late at that point to negotiate changes with the builder. Homebuyers are typically presented with a form contract and sign it, unaware that there may be pitfalls in the contract, which can be remedied by negotiation.

Some of the most common issues to consider when buying a new home are:

1. Providing for protection for the buyer against unfiled mechanic's liens.
2. Assuring marketable title to the buyer.
3. Verifying that the contract does not require the purchaser to waive the statutory new home warranties, or, if it does, that it provides an acceptable substitute.
4. Reviewing the Homeowners' Association or condominium documents within the statutory time limits.
5. Determining the results of the purchaser's failure to use the lender, title company, or other service provider recommended by the builder.

These and other issues can be addressed by your attorney when you bring the contract in for review.