In addition to money, there are a lot of emotions tied in with buying a home. When you fall in love with a house, you begin to envision your future there. Maybe it has a balcony where you plan on having coffee each morning, or it is near where you work. The latter may inspire you to consider new ways to spend your additional free time (e.g., playing with your kids or taking up a new hobby).
After your offer gets accepted, these dreams become that much more real. The inspection or due diligence period allows you to take a deeper look at your home. There are inspections, appraisals, and even (possibly) more negotiations.
These may put you in a position where you are forced to walk away from the sale. Because of how emotionally invested you are in the property, this could prove to be tremendously difficult. Another challenge is that some of the issues can be resolved through the previously mentioned negotiations. But at what point does it serve your long-term interests to walk away from the deal?
The Foundation
Yes, the physical property having a firm foundation is fundamental—and that is the important word: fundamental. Inspection reports can be hundreds of pages long. They will note everything from an aging roof that needs to be replaced to structural issues. Which findings present the possibility of being significant problems that may require attention for as long as you live there?
A noisy bathroom fan can be replaced. But it doesn’t compare to a basement that has water in it each time it rains.
When looking for long-term issues, think beyond the actual property itself. If a title search says there is a lien on the property or there is an easement on your land, then you potentially may be “buying yourself a problem” by quite literally purchasing a legal issue along with the house. What costs will you inherit after you walk away from the closing table?
Financing
The sale price of the home may change during the due diligence period. For example, the appraisal may come back low. Your lender may not want to loan you more than the home is worth. If the appraised value is low and your financing is in jeopardy, the seller may have to lower their asking price.
Otherwise, they risk re-listing their home and beginning over with a new buyer. Even then, they run the risk of arriving at the same issue a second time.
Auricchio Law Offices
At Auricchio Law Offices, we take a lot of pride in seeing our clients complete a transaction. When done correctly, it can be a very emotional and rewarding process. To ensure your interests are protected when you buy or sell a home, contact Auricchio Law Offices to schedule a free consultation.
Auricchio Law Offices
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