One would think that purchasing a property is like buying anything else with the sole difference of the high amount of money involved in the transaction. However, youd be surprised to know that there are many precautions that you should take when purchasing a property as there are many commercial and legal details that you have to be aware of.
Though a sale contract can be signed, the property is not legally owned till the deal is fully closed and you get (symbolically) the key of the property. Thus, the property of the house is perfected when you take possession of the property and when you are legally entitled to take that possession. Its not enough with the sale contract, you need to actually move in.
Property And Possession
Transferring the ownership of real estate requires great formality. In order to rightfully own a house you need not only to possess it but also to have a legal title over it. This title will be the consequence of a sale contract, a donation, an inheritance, etc. On many places, it is even possible to obtain such title by the continual and uninterrupted possession of a property for a long period of time.
Thus, possession is not the same as property and even if you possess a property, there is no guarantee that you rightfully own it. Tenants recognize the ownership of the property on the head of the landlord, they possess and enjoy the property but they dont own it. The consequences of this distinction are very important when it comes to the precautions you need to take when purchasing a property. The risk is to purchase a property from someone that doesnt own it or from someone that is subject to a court process.
Thus it is important for you to go through all the details about a property and request information from public records and registries so as to make sure that the property is rightfully owned by the one claiming to own it and that there are no processes going on that may jeopardize the transaction or eventually put in risk your ability to keep the property. The aid of a lawyer or a trusted real estate agent is a must in these cases.
You need to make sure that the money will be ready when it comes to perfect the sale contract. The reason for this is that a pre-approval for a home loan does not necessarily imply approval and thus, the deal may fall at the last minute because the borrower doesnt qualify and consequently doesnt have the money needed to pay the seller.
This is not such an uncommon situation. There are many deals getting blocked every week due to failure to obtain finance. Most sellers would be willing to postpone the transaction for up to a month so as to give the buyer enough time to obtain a loan from another source. But if the situation cant be modified, then the deal will hopelessly fall with loses for both parties in terms of time and thus, money.