Buying real estate is one of the most expensive transactions that most people will be involved in during their lifetimes. It can be a stressful process, especially for first-time homebuyers who have never been through it before and have no idea what to expect. It’s easy to feel overwhelmed by the sheer amount of paperwork involved in buying a property, but it is important to remember that you are entering into a contract. And as with any contract — you need to understand what you are signing and why.

Whether you are buying your first home or making plans for the dream home to go with your early retirement, it is essential to make sure you are organized and up to speed on all the legal ramifications of buying a home. From the legal documents that you may need to whether you need a real estate lawyer, here is what you need to know.

Do I actually need a real estate lawyer?

Not every state requires homebuyers to make use of a real estate attorney. And it may be tempting to save on the potential costs of using a real estate lawyer when you’re exploring your options. The internet can be a great resource full of tips on everything you need to know, but the average person often doesn’t understand all the legal obligations they are entering into, as well as the deadlines that they are required to meet when they sign things like an offer to purchase.

There is no substitute for the knowledge that an experienced real estate lawyer can bring to the table. It is their job to know about any updates to local property laws and by-laws, as well as understand the legalese that real estate contracts and paperwork are filled with. They can explain everything to you in plain English — and make sure that you’re not accidentally signing your soul away! Real estate attorneys charge a flat rate for their services. So you can and should budget for one.

What are all the legal documents I may need when buying a house?

It is not unusual for a property to receive multiple competing offers within days of being listed on the market. So it is helpful to make sure that you understand all the paperwork you may need and to have as much of it ready and waiting to send beforehand.

Documents to prepare before buying a house:

Home purchase checklist or worksheet

A home purchase checklist or worksheet can help you establish whether you are really ready to buy a home. It does this by having you evaluate your personal finances and calculate anticipated mortgage payments to establish your price range for a property.

Home evaluation comparison worksheet

It is not unusual to find yourself interested in more than one property when you are exploring the market. A home evaluation comparison worksheet can help you objectively compare the different properties you are considering and ensure you’re making the right choice.

Mortgage pre-approval letter

Many real estate agents and private home sellers will require a mortgage pre-approval letter before scheduling a viewing. This is both to deter people who are nothing more than casual browsers, as well as ensure that you are a serious buyer who would be able to meet the seller's asking price.

Real estate agent contract

If you intend to have a real estate agent represent you during the purchase of a property, it is important that you have the contract signed beforehand.

Documents that may be required when making an offer on a home:

Earnest Money Agreement

An Earnest Money Agreement is where a potential buyer assures the seller that they intend to purchase their property in good faith. Many sellers will require a deposit during the negotiation phase, and while this document isn’t required, it can strengthen your offer.

Offer to Purchase

Although it may be shorter and seem less complex than a Purchase and Sale Agreement, an Offer to Purchase is a legally binding contract. It contains details such as the price that you as the buyer are willing to pay for the house, the date that the sale will close, and various other important terms that may be involved in the transaction. Nearly all home sales will use a state-approved form for Offers — but it is still important to have an attorney review it. This is because they will often have one or more attachments known as addendums, which add more terms to the standard Offer.

This is one of the most important documents in the home buying process. This is because an Offer to Purchase becomes a Real Estate Purchase Agreement as soon as the Seller signs it, and there are often penalties if you renege on the contract. These include things like forfeiting your good faith deposit — so ensure you are really ready to complete the purchase before you sign this document!

Documents needed when completing the purchase of a home:

Home inspection report

You should schedule a full home inspection almost immediately after your Offer to Purchase has been accepted. Make it clear in your OTP that you will be doing this, and be wary of any seller who tries to prevent or limit how a home inspection is conducted. This is because they can provide valuable insight into the true condition of the home you want to buy.

Appraisal report

This is a detailed document that outlines the full value of a property based on its location, current condition, quality, and surrounding market conditions. They are compiled by real estate appraisers and can help you ensure you’re paying a fair price for the home you’re interested in.

Amendments to the Real Estate Purchase Agreement

The home inspection and appraisal may prompt certain changes to the terms and conditions of the sale, such as repairs that need to be made before the sale is concluded. These amendments must be signed and added to the original Purchase Agreement.

Simplify buying your new home with help from a real estate attorney

There are many ways that an attorney can help you as a buyer; including reviewing and advising on buyer agency agreements or dealing with real estate brokers, drafting and reviewing your Offer to Purchase, evaluating financial options and helping solve related problems, answering questions and resolve problems that may crop up during the transaction, among others. Make the smart choice for your future and enlist an experienced real estate lawyer to help ensure one of the biggest financial investments of your life goes off without a hitch.