6 Things Lawyers Wish Everyone Knew Before Buying a Home

Buying a home is a legal process involving signing a contract that buyers could be in for the next 30 years. It is also a significant financial transaction, with the potential for numerous pitfalls and complications, especially if this is your first time buying a home.

In every situation, you can avoid wasting money by speaking to an attorney who can provide you with one-on-one legal support and guidance, answer all of your specific contract- and negotiation questions, and help you avoid financial mistakes.

Consider these essential but often not well-understood components of buying a home, which your lawyer wants you to know before you sign on the dotted line.

One of the most important components of buying a home is agreeing with the other party about its value and condition. Many contracts have contingencies or specific rules about what happens if certain circumstances occur.

Contingencies related to inspections and financing help protect buyers if the unexpected occurs, such as a home inspector finding a crack in the foundation or the lender backing out of the loan. Use contingencies to protect your rights from the unknown.

Shawn Good from the Good Law Group, a Chicago-based firm specializing in real estate law, recommends a general home inspection contingency. He notes, "It could also include things like radon, mold, lead, asbestos, and environmental studies." He also recommends a sewer line inspection.

A home inspection benefits the buyer in nearly all home sales transactions. It clarifies the current condition and helps pinpoint unknown factors that could contribute to problems later.

The attorneys at Robinson & Henry, P.C., agree that hiring a good home inspector is critical. "A competent home inspector can uncover expensive construction defects you may not see during a walkthrough of your potential dream home — allowing you to walk away before closing," they state.

Home buyers don't always want to pay out-of-pocket for a survey, but it could be a critical factor. A survey provides exact information about property line locations and clarifies any confusion.

Many rely on Geographic Information Systems (GIS), but attorney Tiffany Webber from Thomas & Webber warns that "GIS isn't accurate on property lines." She also notes that "a contract requires a seller to remedy in some way, shape, or form." If you don't know where your property lines are, and you end up encroaching on a neighbor's property, that will lead to concern down the road.

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There are benefits to purchasing a home with a real estate agent, especially if you do not know much about the property, area, or process. However, attorney Ann Marie Mehlert shares that there are times when you may benefit more from a lawyer.

"If you are an experienced buyer who knows what you want but mostly needs assistance with the purchase contract, then before you hire the real estate agent whose fee is either paid by you or by a seller who's not aligned with your interests, consider first talking to a real estate lawyer. It could save you a lot of money," she said.

Closing disclosures are standard in your agreement, but many home buyers don't read and understand them. Leila Rogers from Thomas & Webber explains why this is a concern.

You'll run into delays if you don't read your disclosures beforehand and find them in your documentation at the closing table. "It really derails things. Every change that's made on a closing disclosure has to be done on the lender's side, with lender approval."

If you're considering purchasing a property with friends or family, not as a married couple, you'll want to consider your contract terms and conditions carefully. That's true for those who are dating as well. With real estate prices high, many people have sought to buy a home with their friends.

Attorney Bill Kessler emphasizes the importance of structuring a contract in these situations. He says, "It answers more specific 'what if' questions. What if I want to refinance and (other party) doesn't?" Clarity in function is critical in these situations.

Buying a home is not just a decision about where you plan to live and how many bedrooms you need — it's a legal decision that could bind you into an agreement for years to come.

When considering money moves for homeowners, arming yourself with a lender, real estate agent, and lawyer could help you make the best decisions for you, while considering what's legally binding under local laws.