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McNEVIN & McINNES, P.C.
Your Indy Advocate
A contract for the sale of real estate is not enforceable in the State of Indiana, unless it is in writing and signed by both parties to the sale. Therefore, a written contract is the generally accepted means of purchasing and selling real estate. When you think about the myriad of issues that give rise to conflicts during a real estate transaction, there should be no doubt about the importance of a written agreement. Real estate professionals typically use boilerplate forms, which are tried and proven in their ability to address most of the contingencies that might arise between the time the offer is made and the time the closing is concluded. However, despite the best laid plans of the drafters and the real estate professionals who fill in the blanks, things often go wrong.
Buyers and sellers need to be concerned about such things as deadlines for submission of earnest money, deadlines for closing, insurance coverage up to the transfer of ownership and thereafter, right to inspect the property, right to withdraw the offer, right to make repairs, right to possession, responsibility for property taxes, express and implied warranties, what appliances and other personal property stay with the real estate, and more. By reaching agreement on these issues at the inception of the contract, the parties can expect to avoid problems later. When contingencies arise, some parties find themselves inextricably shackled to a legal problem and those legal problems are often complex enough to require the assistance of an experienced real estate attorney.
Protect Yourself
What Can You Do?
There is not much the seller needs to do to guard against contract disputes other than to play fair and hire experienced real estate professionals to assist with the sale. The buyer should do the same, but keep in mind there are so many unknowns from the buyer side of the transaction, a buyer cannot afford to be anything less than vigilant. “Let the buyer beware. A simple checklist may go a long way toward guarding the unsuspecting buyer from a disastrous transaction.
BUYER’S CHECKLIST
1. Consider making your purchase subject to financing, even if you are not dependent upon financing. This may give you an escape option you might not otherwise have.
2. Require a Warranty Deed and an insured closing through a reputable title company, whenever possible.
3. Make your offer subject to inspection, and then hire an inspector to inspect the home. Don’t sign a contract with an inspector, if he limits his liability in any substantial way. It is not unreasonable, however, to limit their liability to matters which can be seen by a visual inspection.
4. Be sure to have a pest inspection. This type of inspection is usually not included within the scope of a standard home inspection.
5. Have a survey performed by a licensed surveyor and then review the survey and the property by personal inspection to rule out the possibility that structures on the real estate or neighboring real estate are encroaching and to insure the existing structure does not violate any city or neighborhood set-backs.
6. Review the Indiana Seller’s Real Estate Sales Disclosure Form carefully, and ask about
matters that might not be disclosed on the form, such as prior illegal drug dealing activity
at the location, and other psychologically related history. (No such form is required for
new construction or for sellers who never owned or lived in the home, such as the County Sheriff, or the Executor of an estate).
7. Ask for a copy of the covenants. Under Indiana law, a buyer of residential real estate can withdraw the purchase offer, if they make a timely objection to the covenants. So be sure to obtain a copy, review it carefully, and prepare to object timely, if you can’t abide by the restrictions and obligations set forth within the covenants.
8. Require licensed contractors to perform all work required by any inspection response and always, always, always have the inspector re-inspect the property after the work has been completed to insure the work was performed properly and according to code. You won’t get another bite of this apple after the deed transfers into your name.
10. Have a radon test performed, and if radon is discovery, make sure remediation is confirmed prior to closing. The EPA recommends remedial action be taken, if radon is discovered above 0.4 pCi/L.
11. If you are buying from a builder or developer, require a written warranty and a signed vendor’s affidavit at closing.
12. Never close without a title search.
13. Insure access to the property is either directly connected to a county or state road, and if it is not, insure a proper easement is in place to insure you won’t be held hostage by a neighbor on whose property the driveway may traverse.
14. When purchasing a home with new appliances demand all owner’s manuals and product warranty information, where applicable.
15. Never waive the walk-through prior to closing.