Buying a House in Chicago? Read This First
You’ve decided to upgrade from your downtown studio condominium and buy a house in a hip neighborhood. Buying a house can be both exciting and terrifying at the same time. Is it the right house? Can you afford the payments? Should you go with a home that has more bedrooms than you need in case you have children down the road? While you’ll need to answer these personal questions, you will also want to consider the legal aspects of city home buying that many people are unaware of until they are far along in the process. You’re not alone if you’ve got questions that you are too embarrassed to ask, or you don’t even know what questions to ask. Here are five things to educate yourself about before embarking a single family home purchase.
What is an Easement?
Many single family properties (and condominiums) are subject to easements. Easements typically represent some sort of permitted use by a third party. For example, it is common for utility companies to have an easement over your land to provide utility services, meaning they can access a limited portion of your property for the purpose of providing that utility service. Sometimes a neighbor may have an easement over a section of your property to access an alley or sidewalk, or to construct a fence. Make sure you understand what easements are in favor of others, and also whether there are any easements that you can benefit from as to adjoining properties.
Understand the Local Zoning Rules Before Buying
Have ideas for the property? Want to add a second or third story, or maybe a hip roof deck? Maybe you envision operating your business out of the first floor. “The City” can bring these dreams to a crashing halt in a snap. While zoning issues are not directly connected to your contract and there may not be contingencies to cancel the contract, make sure you are aware of restrictions before you enter the deal, and certainly before you close the deal. Your attorney can assist you with some of these questions, but it may be advisable to involve an architect or other professional depending on your plans.
Understand the Community Association Rules Before Buying
If you are buying a home in a community, make sure you understand what you can and cannot do with your property. You’re probably familiar with the endless rules common to condominium associations. Many single family home community associations can have rules that are just as onerous. For example, some associations require approval before planting certain trees, or painting your home other than specified colors. You will have the opportunity to review all such rules prior to closing your purchase, but if you have the opportunity to review the rules before you make an offer or pay for inspection, do so. That will avoid surprises down the road.
The Home Inspection
It is essential to conduct a home inspection before buying a house, and your contract should be contingent on the home “passing inspection.” In other words, if the inspection results do not meet your standards, you can get out of the deal. In some cases, the property may be listed “as is” in which case you will not be permitted to cancel the deal because of inspection issues and the seller may not even permit an inspection at all. Make sure you use a home inspector that is licensed, bonded and insured and read the report thoroughly. It might make sense to have a contractor give you an estimate for any necessary or desired repairs ahead of time, so you can understand what your financial commitments might be down the road.
What is a Contingency Clause?
A contingency clause can refer to any of several clauses in the contract that give you the right to cancel the contract upon the occurrence or non-occurrence of specific things. For example, passing the home inspection or having your attorney approve the contract. Another common contingency is that you will be able to obtain a mortgage on specified terms. While you likely already know your mortgage eligibility before making an offer on a home, most contracts still give you the opportunity to find one under specific terms; if a bank does not ultimately approve you, or does not provide satisfactory terms, you may be able to cancel the contract. Make sure you understand what contingencies you have and the deadlines for complying with them.
These are just a handful of the more common questions potential home buyers have before buying their first single family home. If you have additional questions about legal issues surrounding buying a house, feel free to contact us.