The purchase of a home is, to most people, the biggest single investment of their lives. The savings of years of hard work are invested in this one venture. It is therefore, extremely important for a prospective purchaser to use the greatest caution in selecting a home which will not only provide comfort, but will cause as little worry as possible, both while it is lived in and when it is time to sell it.

A house may seem to be ideal in appearance and cost, but may contain hidden defects which will later detract from its value. This may be true not only about the appearance of the house and its construction, but also in regard to the title to the land on which it is located. For example, there may be a right of way over the land which permits someone to drive across the property, or zoning regulations may permit the construction of a factory or commercial building on an adjacent lot, or there may be private restrictions which may affect the use or ownership of the property or impose additional assessments. It is possible that a title defect may prevent the later sale of the property or require a large sum of money to clear the title. These are just a few of the difficulties which you may encounter, but they show the importance of checking every detail before you buy a home.

Here are some of the things you should keep in mind when buying a home:

• Has the Seller given you, either prior to or after your execution of the Contract to Purchase, the Residential Property Disclosure Form prescribed by Ohio's Department of Commerce?
• Exactly what property, real and personal, is included in the purchase?
• What zoning regulations affect the property?
• Have the utilities been installed and paid for?
• Are there any easements or restrictions on the property?
• Are there any unpaid real estate taxes or special assessments, and if so, who pays them?
• How are current real estate taxes and special assessments to be prorated?
• Are there mechanics' liens or other monetary liens against the property?
• Is the seller to furnish a marketable title?
• What type of title evidence is to be furnished and who pays for it?
• What kind of deed must the seller give?
• What inspections should be made to the property before closing and does the Seller have any responsibility for curing any discovered defects?
• What are the terms of payment?
• When can I have possession?
• Has my attorney approved my Contract to Purchase before I sign it?
• Who will be responsible for fire or casualty loss if it occurs after signing the contract and before title is transferred?
• Are there any serious physical defects in the property and how can you be protected against such hidden defects?

A Contract to Purchase is a document that is just as important as the deed itself. It should contain an accurate description of the property and all of the terms of the sale, including the price, the terms of payment, the type of deed to be given, the date of possession, provisions for the furnishings of title evidence, proration of real estate taxes and casualty losses, and matters upon which the buyer may want to make the purchase contingent, such as financing, inspections, the sale of an existing residence, etc. In many cases, provisions for items of personal property or fixtures may be needed.

The important thing to remember is that you should consult your attorney before you sign the contract. All too often, a prospective buyer will sign a contract to purchase a home and then call an attorney for advice. When this happens, the attorney can only tell the purchaser what rights are covered by the contract; the purchaser may have signed away many rights. Had the purchaser consulted an attorney before signing, the attorney could have specified what rights should be included in the contract. When contracting to purchase a home to be constructed or which is in the process of being constructed but not yet completed, many other important considerations are involved which need to be discussed with an attorney.

A contract to purchase a home must be in writing signed by both the seller and buyer in order to be enforceable and, if the seller is married, by the seller's spouse. The reason for this is that the seller' spouse has an interest in the property that cannot be taken away without consent. Therefore, you should be sure that the contract you sign is properly binding on the seller.

Under Ohio's Residential Disclosure Law, the seller of a home, except in limited circumstances, is required to disclose to prospective buyers certain information concerning the condition of the home. The information must be disclosed on a form prescribed by Ohio's Department of Commerce. The Form is known as the Residential Property Disclosure Form. The Form must be executed by the seller and the buyer is to acknowledge receipt of the Form. The Seller's disclosure contained in the Form is limited and is not a substitute for a professional inspection of the home.

The buyer should require the seller to provide the Form prior to the buyer entering into a contract to Purchase. However, the Form may be given after the Contract is signed by the buyer. If the Form is given after the buyer has entered into the contract or if the Form is not given to the buyer, the buyer, without incurring any liability to the seller, has the right to rescind the Contract, but the rescission right must be exercised before closing and within certain limited time periods. The Residential Disclosure Law establishes other rights, obligations and limitations for both the seller and buyer. To fully understand these rights, obligations and limitations, an attorney should be consulted.

Prior to closing, it is essential that adequate title evidence be provided to the buyer and reviewed by an attorney. The type of title evidence and who pays for it are matters of contract and community custom. In most communities, an Owner's Title Insurance Commitment and Policy will be provided. A mortgage lender will probably require a lender's Commitment and Policy. Obtaining an Owner's Policy and a Lender's Policy at the same time should save on the cost. Title insurance is the best protection for a buyer. In a few communities abstracts of title or an attorney's title report may be acceptable title evidence. Those require an examination of various public records and a review of the documents searched. Because the review involves technical knowledge of the law, it should only be done by an attorney.

Mortgage lenders have their own attorneys examine the title to property on which they intend to lend money. Buyers sometimes assume that this examination frees them from the need for an independent title examination. It does not! An attorney is responsible to the client for whom the title is examined. A mortgage lender's interest in the property is different from that of the purchaser. The lender demands a margin of value above the amount of the loan. If foreclosure becomes necessary, some expense in clearing the title would not harm the lender. The mortgage lender knows that most mortgages are paid and that small title defects in those cases will not cost any money; therefore, the lender may be satisfied with a title which still contains some possibility of trouble for the buyer. The buyer should have an independent examination to warn of any possible further cost involved in clearing the title so that it will not cause trouble while the buyer owns the land, require expense at the time of sale, or cause expense and trouble to heirs.

No. In a warranty deed, the seller warrants the title against the claims of all other persons. If the warranty is broken, it may have to be enforced by a lawsuit. There is always the possibility that the seller may die or go bankrupt before a defect in the title is discovered. Should this happen, the buyer may not receive any benefit from the warranty or from a lawsuit. Although a warranty deed is desirable, and the buyer should insist upon this type of protection, the deed alone is not enough. The buyer should also have the title examined by an attorney.

If a title insurance policy is provided, it is a contract between you and an insurance company. Under the terms of the policy, the company insures that you hold a marketable title to the real estate described in the policy. Just as in other insurance, the provisions and coverage will vary but the coverage is somewhat standardized and certain endorsements (some at no cost) can be provided. Most policies cover you against all defects of title whether in or outside the records; however, exceptions to coverage may be contained in the policy, and you and your attorney should check carefully the meaning of these exceptions. The policy provides the maximum amount, which the company will pay. The amount, as well as the amount of the premium, is usually based on the purchase price of the real estate.

A Torrens Certificate is a document which shows title to registered land. Such Certificates are used in only a few Ohio Counties. Because the Torrens System and the statutes creating registered land the transferring of registered land are technical, an attorney should be involved in the process.

Extreme care should be taken in closing a real estate transaction. At the closing session, a final check should be made of all papers to see that the intent of the parties has been carried out. For protection, your attorney should accompany you to the closing. Contact Attorney David P. Drew for more information.  (330) 762-0080