{"id":369090,"date":"2016-04-04T10:47:12","date_gmt":"2016-04-04T15:47:12","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/realestate\/buying-a-home\/tips-for-buying-your-first-house.html"},"modified":"2024-01-31T10:19:59","modified_gmt":"2024-01-31T15:19:59","slug":"tips-for-buying-your-first-house","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/realestate\/buying-a-home\/tips-for-buying-your-first-house.html","title":{"rendered":"Legal Issues To Avoid When Buying Your First Home"},"content":{"rendered":"\n<div class=\"wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n    \n    <div class=\"fl-page-articles fl-section-main fl-section-main-full-width\">\n        <h1 class=\"fl-no-margin-top\">Legal Issues To Avoid When Buying Your First Home<\/h1>\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/melissa-mccall-j-d\/\">Melissa McCall, J.D.<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/katrina-wilson-esq\/\">Katrina Wilson, Esq.<\/a>\n                | Last updated\n        <time>\n                            January 31, 2024\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n<p>Buying a new home is often joyous and complex, especially for first-time homebuyers. Any real estate transaction has many moving parts, and it is easy to overlook the necessary steps. This includes legal issues. Unfortunately, legal issues can delay the transaction or cause the prospective homeowner to lose their dream house.<\/p>\r\n<p>This Findlaw article highlights a few legal issues you should avoid when buying your first home.<\/p>\r\n<h2>Potential Legal Issues During the Home-Buying Process<\/h2>\r\n<p>\u200bThe home-buying process consists of three major phases, including the following:<\/p>\r\n<ul>\r\n<li><b>Financing<\/b>: Securing financing for your first home<\/li>\r\n<li><b>House-Hunting<\/b>: Hiring a real estate agent and physically looking at a potential home<\/li>\r\n<li><b>Closing<\/b>: Finalizing the home sale<\/li>\r\n<\/ul>\r\n<p>Legal issues can arise during any phase of the process and lead to time-consuming disputes. It is better to understand these issues in advance and avoid them. Potential legal issues include the following:<\/p>\r\n<ul>\r\n<li>Not exploring all financing options available to you<\/li>\r\n<li>Not understanding the consequences of making an offer<\/li>\r\n<li>Not purchasing title insurance<\/li>\r\n<li>Not ordering a home inspection<\/li>\r\n<li>Not conducting a final walkthrough<\/li>\r\n<li>Not reviewing your disclosure statement<\/li>\r\n<\/ul>\r\n<h2>Explore Your Financing Options<\/h2>\r\n<p>As a first-time buyer, you can finance your home if you are not paying in cash. You are not limited to a conventional mortgage loan. The federal government and many state or local governments offer mortgage assistance programs and down payment assistance to first-time home buyers.<\/p>\r\n<p><a href=\"https:\/\/www.hud.gov\/federal_housing_administration\" target=\"_blank\" rel=\"noopener\">Federal Housing Authority<\/a>&nbsp;(FHA) loans are one example of a federal-backed mortgage program. The FHA is a part of the&nbsp;<a href=\"https:\/\/www.hud.gov\/\" target=\"_blank\" rel=\"noopener\">U.S. Department of Housing and Urban Development<\/a>&nbsp;(HUD). Private lenders grant FHA loans, and the FHA&nbsp;<a href=\"https:\/\/www.consumerfinance.gov\/owning-a-home\/loan-options\/fha-loans\/\" target=\"_blank\" rel=\"noopener\">regulates and insures<\/a>&nbsp;these mortgage loans. FHA loans&#8217; interest rates and down payment requirements are often lower than conventional loans. This can help you save money, so it is worthwhile to determine your eligibility for mortgage loan programs.<\/p>\r\n<p>The&nbsp;<a href=\"https:\/\/www.va.gov\/\" target=\"_blank\" rel=\"noopener\">U.S. Department of Veterans Affairs<\/a>&nbsp;(VA) and the&nbsp;<a href=\"https:\/\/www.usda.gov\/\" target=\"_blank\" rel=\"noopener\">United States Department of Agriculture<\/a>&nbsp;(USDA) also offer mortgage loan programs for specific populations. Your lender can help you determine your eligibility for these mortgage loan programs.<\/p>\r\n<h2>Understand the Consequences of Making an Offer<\/h2>\r\n<p>Making an&nbsp;<a href=\"https:\/\/www.findlaw.com\/realestate\/buying-a-home\/making-an-offer-on-a-house.html\">offer on a home<\/a>&nbsp;is a serious endeavor that is usually binding. Your offer is the first step in creating a contract governed by contract law. When you make an offer, you also demonstrate your intent to enter into a contract. A contract, or&nbsp;purchase agreement,&nbsp;forms when the seller accepts your offer. If you change your mind and try to withdraw your offer, the seller may sue you for breach of contract.<\/p>\r\n<p>For these reasons, you should be sure that this is the house you want before you make an offer and not make multiple offers. If you make multiple offers, you risk several breach of contract lawsuits. Talk to your realtor or real estate agent before making an offer, as they are experts in your local housing market. They can also refer you to a real estate lawyer who can give you legal advice based on a review of your offer and purchase agreement.<\/p>\r\n<h2>Purchase Title Insurance<\/h2>\r\n<p>Title insurance protects you against unforeseen claims against your deed (title). Getting a title report is one of the first steps to closing. A title search should confirm the seller&#8217;s ownership of the house. A title search company or a real estate attorney can conduct a title search and prepare a title report. The title report should reveal any encumbrances on the house&#8217;s title. An easement granting access to your local power company&nbsp;for electrical lines&nbsp;is an example of an encumbrance.<\/p>\r\n<p>Title insurance protects you financially if the title search does not reveal an encumbrance, like a lien on the house. This insurance will cover the costs of fighting the claim, saving you thousands of dollars.<\/p>\r\n<h2>Order a&nbsp;Home Inspection<\/h2>\r\n<p>The home inspection aims to ensure that the house is structurally sound and free of any infestations. You should hire a licensed home inspector to conduct this investigation. If the inspector will check the following for any defects:<\/p>\r\n<ul>\r\n<li>Foundation of the house<\/li>\r\n<li>Plumbing systems<\/li>\r\n<li>Electrical systems<\/li>\r\n<li>Roof and gutters<\/li>\r\n<li>Rodent or pest infestations<\/li>\r\n<\/ul>\r\n<p>If your purchase agreement has a contingency clause and the home inspector uncovers defects, you can ask the seller to repair the defect or reduce the home&#8217;s purchase price. If you don&#8217;t get a home inspection and later discover defects, you will not have any recourse.<\/p>\r\n<h2>Conduct a Final Walkthrough<\/h2>\r\n<p>Before closing on the home, do a final walkthrough with your realtor or real estate agent. Check to make sure that the seller made any promised repairs. Once you close on the house, it is too late to mention any issues. It is better to take care of any issues before closing. Once you close on the house, the house and any concomitant issues belong to you.<\/p>\r\n<h2>Read Your Disclosure Statement<\/h2>\r\n<p>Under federal law, your mortgage lender must give you a&nbsp;<a href=\"https:\/\/www.consumerfinance.gov\/ask-cfpb\/what-is-a-closing-disclosure-en-1983\/#:~:text=A%20Closing%20Disclosure%20is%20a,your%20mortgage%20(closing%20costs).\" target=\"_blank\" rel=\"noopener\">closing disclosure statement<\/a>&nbsp;at least three business days before you finalize your home loan. This gives you enough time to compare the disclosure statement to your loan estimate before you close. You also have time to ask the lender questions about the loan.<\/p>\r\n<p>The closing disclosure should include the following:<\/p>\r\n<ul>\r\n<li>Loan terms<\/li>\r\n<li>Monthly mortgage payments<\/li>\r\n<li>Estimated property taxes<\/li>\r\n<li>Homeowners Insurance cost<\/li>\r\n<li>Closing costs, which&nbsp;may include payment for your credit report, documentation fees, and real estate agent commissions<\/li>\r\n<\/ul>\r\n<h2>Get Legal Help<\/h2>\r\n<p>Your path to homeownership as a first-time buyer is unique, and so are your needs. This article may outline only some of the possible legal issues you may encounter with your first home purchase. A real estate attorney is an expert in real estate law and can help you avoid legal issues during the home-buying process. Speak to a&nbsp;<a href=\"https:\/\/lawyers.findlaw.com\/real-estate-law\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">real estate attorney<\/a>&nbsp;today for sound legal advice.<\/p>\r\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        >\n            <span class=\"was-this-helpful__button-text fl-text-bold\">Yes<\/span>\n            <i class=\"was-this-helpful__button-icon\">\n                <svg width=\"22\" height=\"22\" viewBox=\"0 0 22 22\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n              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          class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Other\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--negative-other\"\n                        >Other<\/label>\n                    <\/div>\n                <\/fieldset>\n            <\/div>\n            <div class=\"was-this-helpful__form-buttons-container\">\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--positive at-feedback-submit fl-button secondary\"\n                    type=\"submit\"\n                >\n                    <span class=\"fl-button-content\">Submit<\/span>\n                    <i\n                      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or neighbor disputes may need the help of local police\n\n                <\/li>\n                            <li data-testid=\"fl-editors-summary-content-item\">\n                    <i class=\"fa fa-check medium fl-editors-summary-content-item-icon\" aria-hidden=\"true\"><\/i>\n                    Complex real estate issues (such as construction defects or illegal landlord actions) may need the support of an attorney\n\n                <\/li>\n                    <\/ul>\n                    <div class=\"fl-editors-summary-content-description\" data-testid=\"fl-editors-summary-content-description\">\n                <p>Buying or selling a home, facing foreclosure, or mortgage loan issues can benefit from legal expertise. An attorney can offer tailored advice and help prevent common mistakes.<\/p>\n\n            <\/div>\n                            <div class=\"fl-editors-summary-content-link fl-flex\" data-testid=\"fl-editors-summary-content-link\">\n                <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                <p class=\"find-attorney\"><a href=\"https:\/\/lawyers.findlaw.com\/real-estate-law\/#USER_GEO\/?fli=esum:FL43\" target=\"_blank\" rel=\"noopener\">Find a local attorney<\/a><\/p>\n\n            <\/div>\n            <\/div>\n<\/div>\n\n\n<div class=\"email-subscription fl-mb30\">\n    <div class=\"email-subscription-header\">\n        <div class=\"email-subscription-header-content\">\n            <h3 class=\"fl-callout-sm fl-no-margin\">Stay Up-to-Date With How the Law Affects Your Life<\/h3>\n        <\/div>\n        <div class=\"email-subscription-header-image fl-flex fl-items-end\">\n            <img decoding=\"async\"\n                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