Love Buying an Acreage Home – Week 11
This step-by-step series will take you through the entire acreage home-buying process — from finding a buyer’s agent to settlement day, and all the details in between. Every acreage home buyer will find this information-packed series easy to follow and understand. Make sure to tune in for the next few weeks!
Buying a home is a huge financial undertaking and you probably want your home value to appreciate with the market.
That’s why it’s so important for you to determine how stable and financially sound this real estate is before taking it on. That’s where reviewing disclosure docs comes in.
What Happens When You’re Under Contract
You’ll have the chance to review a stack of disclosure documents once you’re under contract to purchase a property. These documents include material facts about the property filled out by the owner and state and local mandatory disclosures that must be shared with the buyer. They will give you a better idea of the past history of the property and sometimes environmental, legal, etc.
Yes, it does seem backwards to review these docs after your offer has been accepted, but that’s how the process works! Every once in a while, sellers will have the docs ready and will share with you before you write an offer but not always.
Both you and your lender need to know what you are getting into with this purchase. This is a very important step when purchasing an acreage home and your lender won’t give you a loan if there’s something amiss.
Take every ounce of that time to review these important documents and show them to a lawyer if you need help understanding something:
- We would have written into the contract the amount of time you have to review these documents and can cancel a contract without any consequence if necessary.
- Carefully review the material facts that have been disclosed to you and sleep on them to decide if you can accept them.
Natural Hazard Disclosure
This disclosure docs include but are not limited to the following parts:
Whether the property is in a flood zone;
If the property is in close proximity to an airport;
If the property is in a high seismic zone;
And more…
Homeowner’s Disclosure
Basically, the homeowner is bound by law to disclose and materials fact about the property to the buyer. Anything from kitchen renovation from 15 years ago to a pest treatment last summer should be included in the disclosure.
In California, there is an exemption where a homeowner may not have lived on the property or may have inherited the property and is not aware of many material facts. In these circumstances, another document will be used to state so and the buyer would be made aware.
Be sure to review these documents also.
Preliminary Title Report
While under contract, you will be shared with the preliminary title report which is a document that provides information about the property’s title. If there is a lien (for example, the current owner defaulted on their income taxes and the IRS put a lien against their residence), this information would be documented on the preliminary title report.
The title company should be able to answer most of your questions about the title report. And remember, it is a good idea to have a lawyer explain what some of these terms mean.
More State Mandatory Disclosures
There is a scary amount of paperwork that’s mandated by State of California to make the buyer be aware of. We’ll attack it together when we get there!
We’re heading into the final weeks of my Love Buying an Acreage Home series and also for your final steps to buying a home. You’ll get the nitty-gritty in the next article, Almost There … Pre-Closing Details for Buyers. It provides a breakdown of what to expect so you’re ready for the big day.
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