Prior To The Signing Of A Contract
1. Do I need an engineer’s report?
It is good practice to have an engineer inspect the property you are purchasing, to look for defects or flaws prior to signing a contract. Obtaining an engineer’s report is a prudent step for both re-sales as well as new construction. Some lenders will require an engineer’s report, a termite inspection, & a water test as a stipulation to obtaining a mortgage.
2. Can I build any style house on my land?
Maybe. Many subdivisions have deed restrictions, also called covenants & restrictions, that can be used to dictate construction requirements, setbacks, size of structures, & aesthetics. Zoning laws can also restrict the style & size of house that may be built.
3. How do I know there are no zoning violations affecting the property?
Obtaining an updated certificate of occupancy prior to closing can assure you that there are no zoning violations on the property. Your title report should also provide a housing violations & certificate of occupancy search.
4. What if there are zoning violations affecting the property?
First contact your attorney. Zoning violations can be cleared up in a variety of methods. At its’ most extreme, structures may need to be torn down or moved or rebuilt or a variance obtained to resolve zoning violations.
5. Does the property have beach rights or rights to use common areas with others in the neighborhood?
Sometimes deeds or title history for the property grants to the owner certain easements or rights to common areas. An easement is a right or a privilege that one party has to use the land of another for a special purpose. Some easements are not written in the deed or set forth in a title report. For example: easement by necessity or easement by prescription. Check with your attorney about these or other easements that may affect the value & use of your property, either positively or negatively.
6. How do I determine the amount of real estate taxes on the premises?
Regardless of what your real estate agent or the listing agent or the seller says about the taxes, a buyer should ALWAYS go the local municipality’s Receiver of Taxes & find out for themselves what the taxes are on a property before signing the contract, so that there are no surprises. Most people make mistakes when reporting taxes on a property or have old, outdated information. In addition, buyers can find out about any deductions that may be available to them at this time, for example: the STAR or Veteran’s deduction.
7. How can I find out if there is a property owners’ association?
Your Realtor should be able to help you find out if the property is subject to the rules of a homeowner’s association. Most associations collect dues periodically to maintain common areas or roads in the area. Your Realtor should be able to tell you the amount of the maintenance fees & whether there are any outstanding maintenance fees due at the closing. The seller should pay any outstanding fees owed at the time of the closing. Buyers should also contact the homeowner’s association themselves to find out what the dues are & if there are any outstanding.
8. What are wetlands?
Wetlands are areas that are periodically or continually inundated by tidal or fresh water, or contain vegetation defined as wetland vegetation by state or local laws. Freshwater wetlands can exist in the woods around kettle holes & ponds. Development can frequently be limited near wetlands. Significant setbacks are sometimes required. Special permits are usually required. You may need to consult with an attorney for more information on how to proceed.
9. The property has no public water or sewer? What now?
If the property does not have public water or sewer then it will need a septic system & a well. Both have a finite life span & may need to be replaced someday. Septic systems need to be pumped every year or every 2 years. Septic systems & wells should be inspected prior to purchasing them. Water potability & flow rate are the tests associated with wells. The size of the septic system (number of gallons of the tank as well as linear feet of the leeching fields) will designate the legal number of bedrooms for a house. This is a critical factor in creating value for a home. The septic system’s certificate of occupancy showing the legal number of bedrooms should always be obtained by the buyer prior to signing a contract.
10. Is the seller obligated to make any disclosure regarding the condition of the property?
By law, sellers must provide a Property Condition Disclosure Statement to the buyer prior to the buyer signing the contract, or give a $500 credit to the purchaser at the closing. This disclosure statement includes 48 questions about what the seller knows or doesn’t know about the property. They cover 4 general areas: 1) general, 2) environmental, 3) structural, & 4) mechanical. It is intended to help the buyer increase his understanding of the property & supplement the inspections that the buyer does prior to signing the contract.
11. How important is it to hire a local attorney?
It is important to hire a local attorney who has knowledge of local zoning regulations & pending land use legislation that may affect the property’s value or use. An attorney’s experience with local real estate, insurance, & mortgage professionals, & building & tax department personnel can help expedite the transaction. Consider asking your attorney if he has previously handled real estate transactions in the town where you are purchasing.