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Know Your Rights Before Buying a Home

Authored By: Northwest Justice Project LSC Funded

6200EN - Questions and answers about things you should know before you enter into a contract to purchase a home.

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Why is it so hard to get financing from a bank?

Banks want to make sure lending you money to buy a home is a good investment. To do this, they require precautions, like:

  • inspecting the home to  make sure it is in good condition

  • appraising the home to make sure the price is fair

  • investigating the title to make sure the seller is giving the buyer clear title to the property

  • assessing whether you can afford the home

Why should I try to get bank financing?

Banks usually must follow laws that provide homebuyers some protections. If you buy a home with no bank involvement (examples: on a contract financed by the seller or a rent-to-own or lease option), you must act on your own to protect yourself.

What if I cannot get bank financing?

Some homebuyers that do not or cannot get bank financing turn to arrangements like a real estate contract or rent-to-own transaction. If you do too, make sure you:

  • get the home inspected

  • make sure the seller has clear title to the property

  • make sure the price is fair and the written documents are legal and protect your interests

We explain more below.

Should I enter into a real estate contract with the seller?

*Avoid sellers who advertise looking for homebuyers without social security numbers or with bad credit.

Maybe. Buying a home from a seller is complicated. Get independent advice first. Make sure this is a good investment for you. Do not rely on the seller to draft, explain, and/or to translate important documents or to tell you if the property is in good condition or if it is a fair price.

If you cannot afford to pay for independent professional advice, wait until you have saved enough so you can. If the seller discourages you from seeking your own independent advice, s/he may be trying to hide something.

*You do not have to get bank financing to find these independent services on your own.

What help and advice should I get?

Inspection: Have an independent professional inspect the property  

  • to make sure it is in good condition

  • so you know what needs repairing and how much it will cost

Appraisal: Have an independent professional appraise the property to make sure the price you are paying is fair.

Title search: Hire a title company to make sure

  • the seller is the legal owner

  • there are no claims or interests against the property

*The title company should give you a written title report.

Legal advice: Get help from a certified housing counselor, legal aid office, or lawyer to make sure

  • all agreements are in writing

  • you understand the documents

  • the documents are legal and fair

  • the documents represent your best interests

*Do not rely on the seller or his/her agent to explain or translate documents for you.

Writing and recording: To be legal, all agreements relating to real property (land) must be in writing and you must record them with the County auditor's office. Do not rely on the seller to record your interest in the property. Normally before recording, someone must pay a real estate excise tax. Make sure:

  • your agreement spells out who pays the tax

  • it gets paid!

Check with the county auditor's office to make sure your interest has been properly recorded.

Escrow company: Use an escrow company to close the deal and handle all your payments to the seller.

Enforce contract: You and the seller must follow the agreement. Make sure the seller is paying the taxes or the insurance if required to do so.

If you are in default because of missing a payment or some other violation of the contract, make sure the seller follows laws such as Washington's forfeiture laws. Get legal help if the seller is not following the agreement or if you become unable to do so.

When do I get title to the property under a real estate contract?

You should get title to the property after you have made all payments under the contract.

What rights will I have under a real estate contract?

If you default, the seller must record the real estate contract with Auditor in order to seek any remedies against you. Our publication called Forfeiture has more information. The state law on real estate contract forfeitures is at RCW 61.30.

What about rent-to-own, lease option, or lease-purchase?

These programs are similar. They depend on the details in the written agreement. Usually, you (the buyer) are a renter (tenant) until you actually buy the property.

Usually renters pay an upfront fee and have the option to buy the property at some time in the future for a set price. The landlord (owner) applies some or all of the rent paid toward the purchase price.

During the rental period, the landlord still owns the home and is legally responsible for it. The landlord may try to shift responsibility for all maintenance to you. You may lose your right to purchase the property and all you have invested in it by violating the contract in even in a small way, such as making a late payment or some maintenance violation.

*Renters seldom have the same rights as other homebuyers. The landlord can usually evict you just like regular tenants.

Make sure your agreement is in writing. Follow the steps in "Should I enter into a real estate contract with the seller," above to make sure:

  • the home is in good condition

  • you are paying a fair price

  • the seller/landlord actually owns the property and can give you clear title

  • you understand the written agreement and it is fair and legal

*Do not let a landlord use the rent-to-own agreement to get higher rent from you and shift the responsibility of maintaining the property to you, the tenant, with no realistic expectation that you will ever be the true owner of the home.

Where can I get legal help?

CLEAR is Washington's toll-free, centralized intake, advice and referral service for low-income people seeking free legal assistance with civil legal problems. 

  • Outside King County: Call 1-888-201-1014 weekdays from 9:10 a.m. until 12:25 p.m.  CLEAR works with a language line to provide callers with free interpreters as needed.  If you are deaf or hard of hearing, call 1-888-201-1014 using your preferred TTY or Video relay service.

  • King County: Call 211 for information and referral to an appropriate legal services provider Monday through Friday from 8:00 am – 6:00 pm. You may also call (206) 461-3200, or the toll-free number, 1-877-211-WASH (9274). 211 works with a language line to provide callers with free interpreters as needed. Deaf and hearing-impaired callers can call 1-800-833-6384 or 711 to get a free relay operator. They will then connect you with 211. You can also get information on legal service providers in King County through 211's website at www.resourcehouse.com/win211/.

  • Persons 60 and Over: Persons 60 or over may call CLEAR*Sr at 1-888-387-7111, regardless of income.

6200EN

This publication provides general information concerning your rights and responsibilities.  It is not intended as a substitute for specific legal advice. 
This information is current as of September 2014.

© 2014 Northwest Justice Project — 1-888-201-1014
(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial purposes only.)

Last Review and Update: Sep 15, 2014
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