Protecting Yourself in the Home Purchase Experience

Buying a home is no small decision – it’s potentially the largest investment you will ever make. As you enter into a purchase agreement, it’s important to protect yourselves. You want to protect your heart, your wallet, and your time.

Purchasing a home isn’t just transactional. It’s also emotional and sentimental. Most buyers, with good reason, get very excited about the purchase of their new home. They get emotionally attached to the property. They envision their furniture in the home, dream of paint schemes and new design options. In other words, they mentally move in.

It’s terrific to be passionate about the move; however, there is no guarantee the road to home ownership will lack any bumps. There’s always a slight possibility that the deal could fall apart for reasons beyond anyone’s control. My advice to any buyers is to proceed with cautious excitement in the beginning. Hold off on the real celebration until after the sellers slide their keys across the table and all documents are signed. Then, break out the champagne and the new paint samples.


Most buyers want to know how their finances will be protected. In the majority of transactions, an “earnest money deposit” is applied to the transaction. The purchase agreement should spell out clearly who will hold the deposit, and all terms and conditions for why and how it would be released or returned. Typically, there is language that makes the sale contingent upon obtaining financing and inspections on the home. If you need to sell your current home in order to buy your next home, you may need to write in additional terms to make the purchase contingent upon the successful settlement of your previous home. If there are other special circumstances surrounding your financial ability to purchase, it’ll be critical to add some protection. Consider some of those worse case scenarios and make sure that there’s language within the agreement to protect your funds.
In addition to the financial investment, buyers also should consider their closing timeline with realistic expectations. On the one hand, you want to make sure that you’re not counting down the hours to a specific closing date. Professionals will work tirelessly to hit their mark, but it can often be a moving target. Needing to reschedule movers, painters, contractors, and travel arrangements can be overwhelming if you’re up against the clock. As best as you can, it may be helpful to give yourselves the buffer of several days or a week to close on your home and begin the moving process.

Additionally, you may want to place certain safeguards in the purchase agreement to ensure that you’ll get timely responses and can close in a reasonable amount of time. In your initial offer, you’ll likely want to dictate how long the offer stands. You don’t want the seller to sit on your contract and not get back to you.

Short sales are potentially the hardest transaction to comply with such parameters. As a purchaser, it’s important that you give the seller enough time to respond as needed; however, you must ensure that you won’t wait indefinitely. On short sales, bank owned properties, and/or other properties that have a 3rd party involved, you should expect a longer expiration period.

As the closing date approaches, the seller should make diligent effort towards settlement. If the Seller is unable to cure any title defects, and the Purchaser is ready, willing, and able to close, there may be terms to allow for the Purchaser to terminate the contract and have the deposit refunded. In most circumstances, time is of the essence. Purchasers and Sellers alike should be careful to manage their time appropriately, as it can have costly and frustrating effects.

At the end of the day, purchasing a home is one large business transaction. There are many moving parts and pieces – binding documents, attorneys, banks, lenders, real estate professionals; and, not to mention, substantial equity is involved. Enter into the purchase agreement wisely with conservative expectations. The contract itself should have safeguards to protect your finances and your time. For your emotional peace of mind, begin the process knowing that there will be ups and downs. Along the way, keep your eye on the prize, and before you know it, you’ll be living happily in your new home.

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