When you decide to purchase a home, there are certain important protective measures in place that will afford you rights as a buyer. These rights are known as consumer rights and they are provided by various consumer protection laws.
Without such rights, the purchaser of a home would be exposed to many risks and uncertainties connected to that property. Instead, consumer protection laws help a homebuyer avoid those risks and uncertainties by requiring sellers to comply with specific legal standards and by providing homebuyers with a means of legal recourse.
Although consumer right laws tend to vary considerably from region to region, the majority of these laws give consumers the right to do the following activities to protect them when purchasing a home, including the right to:
- Learn more about a real estate agent’s relationship to the seller as well as to the property itself;
- Choose and interview the professionals that will assist the buyer in making the home purchase, such as real estate brokers, lenders, appraisers, and home inspectors;
- Negotiate for the price of the home, to make repairs on the home, or to build a new home altogether;
- Use purchase agreements or contracts when accepting an offer on the property;
- Give approval or disapproval over the property in question based on the physical condition of the home (note that there may be deadlines and specific time frames associated with such a request);
- Perform tests or evaluations to discover structural and/or environmental defects in the home (usually at the buyer’s expense);
- Revoke the offer during the escrow period (if applicable to the situation);
- Obtain a copy of any documents that are signed in connection with the purchase of the home as well as to have those documents explained to them by a professional;
- Have any documents associated with the home purchase reviewed by a lawyer (again, usually at a buyer’s expense); and
- Move into the home once all contract obligations have been met and fully satisfied by the parties.
While the above list contains many of the rights and privileges that are afforded to most homebuyers, it would still be in your best interest to consult a local real estate lawyer for further advice if you are planning on purchasing a house.
As mentioned, these rights will change based on jurisdiction. Therefore, you want to make sure you know which protections and privileges you can claim in the event that there is a lawsuit or you want to back out of making the purchase.
Additionally, an experienced real estate lawyer will also be able to assist you with negotiating a fairer asking price and possibly for the seller to make certain repairs on the home. Thus, you should hire a lawyer before you sign an official contract.
What are Some Rights of Mortgage Borrowers?
The majority of homebuyers apply for a mortgage loan when purchasing residential property. As such, mortgage borrowers (i.e., mortgagors) are also granted a number of significant consumer rights and protections. Again, though these will vary from state to state, they will generally include the following:
- The right to shop for different types of loans as well as to compare the offer rates of different mortgage lenders or brokers;
- The right to be informed about the total cost of the loan, such as the interest, fees, and other kinds of charges that could accrue;
- The right to know which fees on the loan are refundable (if any);
- The right to request a good faith estimate of the entire cost of the mortgage before the homebuyer accepts and signs the loan or makes any payments towards it;
- The right to ask a mortgage broker questions and to have them explain the variety of services they intend to offer the buyer;
- The right to know whether a loan can be cancelled, how long the homebuyer will have to cancel it, and any other important cancellation procedures in connection with the loan;
- The right to know how much money the broker will receive from both the purchaser and the lender;
- The right to ask questions about any loan terms that the homebuyer does not understand;
- The right to be informed of the reasons as to why a homebuyer’s loan application was denied (if applicable); and
- The right to be free from discriminatory practices during the credit approval process (e.g., discrimination is prohibited if it is based on race, religion, sex, national origin, age, gender, marital status, pregnancy, and/or disability).
What if My Consumer Rights as a Purchaser Have Been Violated?
A seller should take care not to violate the consumer rights of a homebuyer during the home purchasing process. Such a violation of consumer rights can have very serious legal ramifications for the seller. For example, if a seller refuses to provide signed copies of certain documents, their conduct will not only hinder the sale of the home, but may also potentially expose the seller to legal vulnerabilities that could result in a lawsuit.
The requirements as well as the types of remedies that a homebuyer can recover will vary by state and by the kind of violation that occurred. However, a homebuyer should generally take the following steps if they believe that their consumer rights have been violated during a home purchase transaction:
- The homebuyer should keep a personal written account of the circumstances leading up to the violation. The statement should contain a short description of the events in a diary or journal format. For example, if the seller refused to hand over copies of signed documents, then the homebuyer should note that down along with a description of which documents, the date, and the time of the seller’s refusal.
- The homebuyer should also be sure to keep and make copies of any important documents that are associated with the home purchase transaction. This is especially true in regard to signed documents, contracts or agreements, and documents that have been negotiated and reviewed by both parties.
- Finally, the homebuyer should gather as much information as they possibly can, such as real estate licenses, certificates, witness statements, and/or testimonial statements from all parties involved in the transaction (e.g., seller, seller’s real estate broker, escrow agents, title insurance companies, etc.).
The three steps above will help prepare the homebuyer in the event that they need to file a lawsuit against any of the parties involved in the transaction. For instance, many of the items mentioned in the above list are things that can be used as evidence during court proceedings and will likely be requested by an opposing party or by the homebuyer’s lawyer for review purposes.
Do I Need a Lawyer for Help With Consumer Rights in a Home Purchase?
The process for buying a home typically involves many intricate requirements and is governed by complex real estate laws that often vary by state. Thus, if you are interested in purchasing a home, then it may be in your best interest to hire a local real estate lawyer to help guide you through the process.
An experienced real estate lawyer can review and draft any necessary legal documents and can aid you in negotiating for a more favorable purchase price. Your lawyer can also inform you of your consumer rights under the law as well as can assist you in making sure that those rights are adequately protected against unlawful conduct.
Additionally, in the event that you encounter a legal issue or are involved in a dispute over a home purchase transaction, your lawyer will also be able to provide representation in court should it become necessary.