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BUYING A HOME IN VIRGINIA

JB LANGLEY-EUSTIS LAW CENTER

Updated April 2017

This handout is designed to help you understand

some of the major issues involved in the purchase of

a new home. Although this pamphlet is not all-

inclusive, this information should help make the

process a little more bearable.

Should I buy or continue to rent?

- Do I have a steady source of reliable income?

- Do I have a good record of paying my bills?

- Do I have few outstanding long-term debts,

such as car payments?

- Do I have money saved for a down payment?

- Do I have the ability to pay a mortgage every

month, plus additional costs?

Buying a home can save you on taxes because your

mortgage interest and real estate taxes are tax

deductible.

Home Considerations

- Check to see if the house is in a low-lying

area that might be flooded, is in a high-risk

area for natural disasters (like earthquakes,

hurricanes, tornadoes, etc.), or in a hazardous

materials area.

- Be sure the house meets building codes and

consider hiring a home inspector to test the

home for defects.

- Consider local zoning laws, which could

affect remodeling, landscaping, or making an

addition in the future.

- Be mindful of property tax trends in the

community from year to year.

Real Estate Agents – Real estate agents are valuable

resources. They can easily search listings, help you

find homes that most closely match your desires,

provide you with forms associated with purchasing a

home, and assist you in obtaining advantageous

financing. However, never forget that the real estate

agent works for the seller. This means the agent is

paid to promote the seller’s interest. Despite this

fact, most agents can and will assist you in making

the purchase of your home as smooth as possible. Be

cautious of the agent who represents himself as a

“buyer’s agent,” especially if he will be receiving a

percentage of the commission earned by the seller’s

agent. Find out how the agent is getting paid!

Bottom line: If you are not paying for the service, the

agent is not working for you exclusively.

Making an Offer – Once you have decided on which

home you want, you will be expected to make a written

offer. This offer is an extremely important document. It

lists the price, terms, and conditions under which you

agree to purchase the property. It gives the seller the

power to bind you to a legally enforceable contract if the

seller accepts your offer. NEVER make an offer unless

you are willing to be bound by its terms!! Never make

an offer on more than one property at any one time

unless you fully intend to buy more than one property!!

ALWAYS write a time limit on your offer so that it

expires automatically after the seller has a reasonable

time to consider it. (Two to three days is usually

enough.)

After you make your written offer, the seller may:

1) Accept your offer on your terms;

2) Expressly reject your offer;

3) Let the offer expire automatically at the end of

the stated time limit; or

4) Make a counter-offer which you may either

accept or reject.

Remember, if the seller accepts your offer, the result is a

legally binding, enforceable contract. This contract is

known as a “sales contract,” “purchase agreement,”

“contract for deed,” etc., and is no more than an

exchange of promises. You promise to pay the agreed

upon price, and the seller promises to convey the deed to

the property. Therefore, if you renege or back out of the

contract, the seller has the right to sue you for any loss

they suffer such as advertising, maintenance, taxes and

the like. This contract DOES NOT transfer title to the

property.

Terms and Conditions – If you don’t request it in

writing, you won’t get it. Make sure you list all your

terms and conditions for purchase in the contract. When

in doubt, list it. The most common conditions include:

1) Names of the parties to the contract,

2) Description of the property,

3) Purchase price (including terms of financing,

interest rate, VHA, FHA, or VA),

Updated April 2017

4) Fixtures such as lights, blinds, water heaters,

etc.,

5) All other items you wish to list in the contract

such as refrigerators, washers and dryers, and

6) Home inspection(s) (typically paid for by

seller),

7) Closing costs (can be paid by either party).

The condition of the premises should clearly be

stated in the contract. For instance, the seller should

agree to maintain the heating, air conditioning,

plumbing and appliances in working order until the

property is conveyed. In addition, the seller should

provide you with a wood infestation report.

Liability for damage or destruction to the premises

prior to closing or possession is another area that you

should address in your initial offer. To protect

yourself, you should include a provision in the offer

stating that the risk remains with the seller until

closing or possession. Although such a provision is

common, many sellers insist that the risk shift to you,

the buyer.

ALWAYS specify that the agreement is contingent

upon your obtaining financing within a specified

time. This way, if you cannot obtain the financing in

the specified time, you can get out of the contract and

recover your money without threat of a lawsuit. If a

home inspection has not been performed, this too

should be a contingency within the agreement.

The closing date and date of possession should also

be specified in the contract. The closing date is the

agreed upon date to transfer the deed in exchange for

money. Possession usually occurs at closing;

however, it is not uncommon for the seller to permit

the buyer to occupy the premises on a rental basis

until the paperwork has been completed.

Closing Costs

Several fees may be due, including:

Legal fees- charged for holding the settlement

meeting; includes the fee paid to the title company to

review the deed and other documents filed in the

county land records to make sure that title can be

transferred free and clear.

Appraisal fee - paid to the mortgage company when

the loan application is made or paid at closing.

Lender fees- Lenders charge fees associated with the

closing, including documentation preparation, points

charged in connection with the determination of the

interest charged, and application fees (which are not

charged by all lenders but are still seen when using the

services of small banks or mortgage brokers).

Recording fees- fees or taxes paid to the county or state

in which the property is located.

Real Estate taxes- often pre-paid at settlement with

escrow accounts set up by the lender to continue to pay

the tax payments until the property sells.

Your lender will prepare a detailed GOOD FAITH

ESTIMATE when the loan application is taken. Most

real estate agents will prepare a BUYER'S ESTIMATED

CLOSING COSTS when preparing your Contract of

Sale so you'll be prepared for settlement costs. Closing

costs in Virginia are approximately 3% of the purchase

price.

Other Issues

Buying a home can be a trying experience. If you have

any questions about the offer you are planning to sign,

seek legal assistance from a civilian attorney or the

Langley Law Center.

Note: The information in this handout is general in

nature. It is not to be used as a substitute for legal

advice from an attorney regarding individual

situa

tions.