Have you ever lived in a home, thought about buying a home, or sold a home? If you answered ‘Yes’ to any of those questions, you’ve been involved in residential real estate. It’s an extremely intricate field, and while many people would like to know more about it, it’s hard to know where to start. I’ve always found learning about residential housing to be a fascinating lesson in patience, complexity and nuance, but anything one can do to pass on knowledge in a straightforward fashion is a good thing.
Here are some frequently asked questions about residential real estate (with the answers, of course!):
What are some issues worth considering when reviewing a contract to purchase a home?
The most important step in purchasing a home, without a doubt, is the purchase contract. The details of this agreement will determine what you buy or sell and how you can buy or sell it. Before signing the contract, be sure to thoroughly read the agreement and consider a few details:
- When can the buyer take possession?
- Assuming the property is new construction, have utilities been installed?
- What land, furnishings and buildings are included in the offer?
- If the offer is accepted, which party will pay for examination of the title?
These are just a few examples of questions you should ask yourself while reviewing the document, but it’s important to err on the side of being too thorough (rather than not thorough enough).
What is an easement?
An easement is an interest in land owned by a person who isn’t the owner of the whole parcel. Examples of easements could include right of way, right of entry, right to the support of land and buildings, or right to water. The land benefiting from an easement is called the dominant estate. Unlike a lease, an easement can last forever, but it usually doesn’t give the holder the right to exclusively possess or sell the land.
What is a survey, and why pay for one?
A survey is a drawing of the property which shows improvements, boundary lines, and any encroachments affecting said property. The details of any given survey depend on what was required of the surveyor in their contract, as well as what’s implied by the certification that the surveyor gives. The surveyor can certify whether the property is located in a flood zone, whether there are easements for any encroachments on the property (such as utilities, another party’s right to enter, structures, etc.), whether improvements are located within boundary lines, and so on. Most residential lenders require that a survey be obtained prior to closing.
How does the buyer know that the land surrounding the property will be used?
In most circumstances, the seller doesn’t guarantee how land in the surrounding area of a property will be used. If you’re concerned about how the land near your new home will be used, consider contacting the tax collector for the county in which the property is located and determine who owns the surrounding land. Assuming you’re purchasing a property, you’ll need to take responsibility for finding out what uses may affect you.
What’s an escrow, and what does it mean to have funds in escrow?
An escrow is a hold on an item (usually funds) which usually expires at a certain time or until the occurrence of a condition, at which point the escrow agent hands over the item to another party. To say that funds or documents are in escrow is to say that they’re being held by a third party, and it’s generally understood that it won’t be forever.
Source: American Bar