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    What to Know When You’re Buying a Home

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    HouseforSaleAbout a decade ago, I bought my first home. It was a “sweat equity” fixer-upper, and I was a poor law student. The price was right, and I wasn’t deterred by the fact that the place came with no water heater and blank wall space where the kitchen cabinet had been ripped out. The whole interior – ceilings included – was painted lavender, but I didn’t care. Hey, I was a homeowner!

    I may have been a bit naïve as to exactly how much blood and sweat it would actually take to get the place looking good again (remember, the whole house was painted purple inside), but I did have a thorough inspection of the house prior to buying it. So, I knew what I was getting into, and what kind of financial burdens I was taking on.

    Being prepared is the key to a smooth home purchase. And many of you may be looking to embark on the journey toward home ownership this year. According to the Richmond Times- Dispatch, the local housing market has improved vastly in recent months, with a ten percent increase in median price and a seventeen percent increase in the number of sales in the fall 2013 quarter compared to the fall 2012 quarter. If you are looking to join the ranks of Virginia’s homeowners, consider arming yourself with knowledge and a team of professionals that represent your interests. Here’s some information you should know about:

    Real Estate Agents

    Most real estate agents work for the seller. They get paid a percentage of the sale price and have a legal duty to the seller, so your interests are not necessarily represented. If you want someone bargaining solely on your behalf, consider hiring a buyer’s agent to separately represent you. Two significant advantages are that the agent will be helping you craft an offer to your best advantage and the agent will be helping you search for a property that best meets your needs – all without thinking about making a sale at the same time.

    Inspection

    The most important step in the (home-buying process is the inspection. (If a magazine could insert blinking lights around text, this would be the appropriate place, people!) A thorough home inspection is the most likely place to turn up problems with the property, so this is not the place to cut any corners. Find an independent inspector rather than going with one recommended by the seller’s real estate agent; this will eliminate any conflicts of interest that may arise.

    Know what’s covered in the inspection and what’s not. Some common omissions include mold, lead, and radon testing, for which you can hire independent inspectors. A few hundred dollars now could save your retirement fund later.

    Title Search and Insurance

    Another key step in the home-buying process involves title. A title search should reveal any liens, judgments, or easements on the property. A lien is a security interest against the property; one common example is a mechanic’s lien filed by someone who did work on a house and didn’t get paid. If such a lien exists, is should be settled by the current property owner before you take title. Likewise, if there is a judgment against the property owner, for example, from a court case, that must be cleared up before you take title. A title search should also disclose any restrictions on the property, such as an easement. For example, a local ordinance could prevent you from building within ten feet of your property line, or a utility easement may prevent you from installing that in-ground hot tub you have always dreamed of.

    Additionally, you’ll want to purchase title insurance, which protects your interests if the title to the property turns out to be flawed. Such occurrences are rare but dramatic. A few hundred dollars will protect what is likely one of the biggest investments of your life, and many mortgage companies require it as well.

    Taking Title

    If you are purchasing a home with another person, there are a few options regarding how you can take title: joint tenancy, tenancy in common, and tenancy by the entirety. I know, I know. Cocktail party terms, if the cocktail party is at a real estate law firm, that is.

    If you are legally married in Virginia, consider taking titles as tenants by the entirety, which affords some creditor protections. Note that this form of ownership is only available to people in marriages recognized by Virginia, so for now, same-sex couples should consider joint tenancy with survivorship rights. How you take title is something you should talk to your attorney about, as the legal consequences are far-reaching.

    And in the midst of the mountain of legal paperwork, don’t forget to have some fun. That first coat of paint does wonders, especially if it’s covering up a sea of lavender. If undertaken with care and attention to detail, becoming a homeowner can be a pretty phenomenal experience.

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    Kelly Hall
    Kelly Hall, Esq., is a full-time mom and part-time attorney. She practices law in Richmond.