Buying a home is a complex process, which means that aspiring first-time buyers have a lot to learn. Frequently, their focus is on the features and location of property. They look at the kitchen and the closet space to ensure that the home meets their needs.
Unfortunately, that approach can result in buyers overlooking potentially serious issues with the property that can affect its value and their use of the home in the future. Those hoping to buy a home need to learn about potential complications beyond the basic amenities of the property.
What issues with real estate do first-time buyers sometimes fail to notice?
1. Title defects
Usually, mortgage companies require title insurance coverage. The research required before issuing the policy can help identify any major title issues.
Particularly in scenarios where there isn’t a mortgage lender to demand title insurance, buyers may overlook title issues. Title issues can eventually result in title claims, which may impact the ownership rights of the buyers. Even if they successfully defend against title claims, the process of resolving title disputes can be expensive and stressful.
2. Building issues
Mortgage lenders tend to require inspections as well as appraisals to ensure that the property is in acceptable condition and that it is worth what the buyers offered. In scenarios where buyers waive the right to appraisals and inspections, they could overlook latent defects that could be very expensive to address later.
Problems with the foundation or other major systems in the home can prove quite costly to address. Especially in cases where first-time buyers try to inspect a property on their own, the possibility of overlooking expensive issues is a major concern.
3. Restrictive covenants and easements
Perhaps the property is in a community governed by a homeowners association. There may be local community rules that limit how the buyer uses their property. Restrictive covenants worked into community agreements or closing documents can impact the use and quiet enjoyment of a property.
In some cases, neighbors, utility companies and other parties may have easements. Easements grant them certain access privileges and can impact the value of the property in the future.
Buyers often benefit from having legal representation throughout the purchase process. Attorneys can assist with the due diligence process and with the analysis of title records, as well as seller disclosures.
First-time buyers often need help identifying signs of property issues and protecting their interests, as enthusiasm often overshadows rational decision-making during residential real estate transactions. Having proper support when evaluating a property can help protect buyers from scenarios in which they overpay for homes in mediocre condition.