Real Estate Overview
The purpose of this page is to give you general information concerning purchasing a home in Tennessee. It is not intended to advise you on any specific problem and does not cover many of the more complex problems of purchasing a home such as the tax consequences resulting from owning a home in your name alone or jointly with your spouse or with some other person. For specific questions about your particular situation, you should always consult with an attorney.

Offer to purchase and contract.
The contract is a most important legal instrument. If not in writing, no contract for the purchase and sale of a home is enforceable. Though the instrument may be caption "Offer of Purchase" or something other than "Contract," if it includes a written offer, is signed by you, and is accepted in writing by the seller, you have a binding contract.

When you are preparing and evaluating your contract, some of the matters to be considered other than price and terms of payment are:

Have all of the owners and their spouses signed the contract?
Is the description of the real property adequate to ensure that you will obtain the property you expect to purchase?
Are all items of personal property which you intend to purchase (stove, refrigerator, draperies, etc.) included in the contract?
Is the seller obligated to convey good and marketable title by a general warranty deed?
Is your obligation to purchase conditioned upon the property's being free and clear of all restrictions and zoning regulations which would prohibit or restrict your intended use?
Does the contract provide adequate time for you to obtain necessary financing and is it conditioned upon your ability to obtain such financing?
Is your obligation under the contract conditioned upon your ability to complete the sale of your present home?
Does the contract allow you to inspect the structural, electrical, mechanical, plumbing and other systems to determine that they will be in good working order at the time of closing?
Is the home to be free and clear of termites and other wood destroying insects as well as to be free from insect damage, water rot, dry rot, etc.?
Does the contract give you the right to check for environmental hazards such as radon?
Does the contract specify who is to pay the fees related to closing as well as taxes, assessments and other charges against the property?
Does the contract limit your liability for violation of its terms to the amount of your deposit?
Does the contract provide specifically that your deposit will be returned to you and when it will be returned if any condition of the contract is not met or if the seller is unable or refuses to perform?
These are only some of the matters which you should consider. If you have signed the contract prior to consulting your attorney, you have limited significantly his ability to assist you in these and other important considerations. Rather than being in a position to advise you of what your contract should or should not contain, your attorney now can inform you only of your rights and obligations.

The title search and title insurance.
Title to real property is not a document such as a certificate of title to an automobile, but is an ownership right. "Marketable title" in Tennessee is a title that is free from such claims of others that a court will enforce the terms of contract for its sale. To determine the status or quality of your seller's title, a title examination must be made.

Title examination involves an extensive review of the public records and requires a thorough knowledge of many areas of the law. For this reason, the examination should be made by or under the supervision of an attorney. Those matters affecting title which are revealed by the public records include, among others, outstanding deeds of trust, judgments, unpaid taxes and assessments, easements and building and use restrictions. If you have retained your attorney to examine the title, the attorney will provide you with a written Opinion on Title or will obtain an owner's policy of title insurance for you. Following examination, the attorney will advise you of the findings and may give you an opinion of the marketability of title.

However, the attorney's opinion cannot advise you of or protect you from title difficulties not disclosed by the public records. Some examples of these "hidden risks" are forged deeds in the chain of title, fraud and undue influence in connection with the execution of deeds, deeds signed by minors or by incompetent persons and missing heirs not disclosed by the public records. Protection against such difficulties can be afforded only through the purchase of an owner's policy of title insurance.

It is important to note that a title insurance policy in favor of your lender or in favor of a prior owner does not protect your interest. Title insurance is a contract between the insurer and the insured. Only if you are named insured in the policy are you protected, and then only as set forth in the policy. You should be aware that your title insurance policy may exclude from coverage certain risks which you may not be willing to assume. Ask an attorney about title insurance.

Not only can the attorney procure an owner's policy for you, the attorney will advise you prior to closing of the exclusions from coverage and will explain the potential consequences of these exclusions. The attorney can also advise you in selecting a reputable title insurance company.

The Closing
The closing of a real estate purchase is both technical and complex. It is not the mere formality of exchanging money for a deed. Closing is the time for you to be assured that all terms of the contract have been met by your seller, that all documents relating to any financing are prepared in accordance with your agreement with the lender and that you are aware of and understand your rights and obligations as they relate both to the property and to the loan documentation.

Prior to the payment of the purchase price to the seller, your attorney will assure that your deed is in proper form, that it is executed and acknowledged properly and that it is recorded in the County Register's Office. If there are repairs to be made after closing, your attorney should make sure that adequate funds are placed in escrow to pay for those repairs.

To contact The Law Offices of Tommy L. Fullen about this area of practice, please send an e-mail to: realestate@tommylfullen.com