There is a lot of fine print in the real estate industry. Purchase and sale agreements, mortgage commitments…there’s a lot there that most people don’t read too closely. Ultimately, you should, but if you’re not going to, you need to at least be aware of what could bite you so that you can ask a trusted advisor what applies in your situation.
When buying, always look at what you’re agreeing to assume in rentals. Is there a furnace rental, or a water softener? If so, do you want them, or would you rather have ones that you own? If you agree to take on a rental, you have to do so. Conversely, if you’re selling, be sure that you’ve at least addressed all of the rentals. It’s never pleasant to find out not long before closing that you have to buy out an expensive furnace because it didn’t get listed in the agreement. Sellers should always be aware of what they’re agreeing to provide for a survey, and make sure they have it before they sign. And if you’re buying or selling, always, always read the extra schedules so that you’re sure what you’re agreeing to do.
With mortgages, it’s important to look beyond the rate. Do you want to be able to pay it down aggressively? Have you talked about the length of the term and the amortization? It’s obviously important to get the best rate you can, but if you have other objectives, you want to ensure they’re being met.
As they say, the devil is in the details. And a devil is not what you want in your new home or mortgage.