Buying a home does not only involve money exchanging hands. It’s not about signing the papers and the checks. It’s not even just about the bank approving your mortgage application. There are many legal and administrative problems that you can encounter when buying a home, especially if you are doing it for the first time. Since this is one of the most expensive purchases you will ever make in your life, it pays to be aware of all the legal things you have to take care of.

From applying for a mortgage preapproval to searching for conveyance quotes, there are plenty of things to do when you want a seamless process for home buying. Thankfully, the internet is chock full of information about buying a property, so you’ll never miss a thing if you do thorough research. Here are the most important legal issues you have to face when buying a real estate property:

Mortgage Preapproval

Why get preapproved for a mortgage loan if you can apply for it later? A mortgage preapproval will make it easy for the seller to accept your offer. When the bank has already approved your loan, that means you already have the first steps to affording the property. Preapproval does not mean you are approved for the loan, but it means you are qualified for one. That’s important information for the seller.

It’s easy to get preapproved for the loan. The bank will need your details and how much you can pay for the down payment. Then, the bank will give you a letter stating that you are preapproved for a specific amount and a specific time period.

Purchase Offer

The purchase offer is a formal offer to the seller to buy the home. It’s a complex document, so you need the help of an experienced real estate agent and lawyer to draft it. The purchase offer will include how much you’re willing to pay for the property. You may want to offer less than the asking price. The seller is not obliged to sign the document anyway, so you might also offer the amount you’re comfortable with.


This part is a bit tricky. If the seller wants to negotiate with you on the price of the house, you may have to revise the purchase offer repeatedly. The purchase offer includes a lot of things that may be difficult for a homebuyer to understand. This is why you will need a real estate agent and lawyer.

The purchase offer will include, among others, the earnest money (the cash buyers will commit to the seller until the sale is completed), contingencies, settlement date, and date of possession. The seller has to agree to all of these things. He/She may also ask for more concessions, particularly how much earnest money they will require.

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Mortgage Approval

After the seller accepts your offer, the mortgage approval process will begin. Usually, this is when the financial institution (the bank or lending company) will investigate whether you can truly pay for the mortgage. While you’re already preapproved for the loan, you will still need to provide more documentation to convince the lenders to finance your purchase.

You will need the help of a lawyer and real estate agent at this point. They can guide you on how to navigate the overwhelming process of getting that mortgage approval. Also, you have to be ready to talk about your finances.

Mortgage Closing

After the approval of the loan, you’ll have to call on somebody for a home inspection. The home insurance company will need this report. Also, you’ll find out if you will encounter more problems with the house in the future. But once all of these are settled, you’re going to close the mortgage. This means that you’ll sign agreements and review all financial details to ensure that everything is in order.

This is when you will also need a conveyancer or solicitor. They will take care of transferring the deed and property titles and registering the new ownership in the proper government agencies and departments. The sale of the property is not yet final until all necessary documents are with the local registry.

The rules for property buying vary state-by-state. Some states will require only a notary until the completion of the buying process. Others will want only a lawyer to sign the papers, as well as a licensed real estate broker, of course. One thing is for sure, though: homebuying is a complicated process. It’s nerve-wracking at worst and stressful at best. You need all the help you can get. The amount of money you need to pay the fees are necessary for a seamless process.

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