why cant you buy a house the way you buy a car?

Question

I give you money, you give me a house. Whats up with all the rules and lawyers and signing a whole phone book?

Answer 1

You can but most don't have the money. Also it is a big deal for most people so they have laws like you can't buy it without looking at it. Each property is unique not like assembly line cars where you could get another just like it.

Answer 2

You can do it your way, if you want to. Give $200,000 to the owner. Have the owner sign a quitclaim deed to you. Record the quitclaim deed at the recorder's office, and the house is yours. Perfectly legal.

The problem is, most people don't have $200,000 lying around, so they need a loan. The loan documents alone are probably three fourths of your proverbial phone book.

Of course, the financing company wants to be sure that their collateral (the home) is worth at least the amount of the loan. So, you need appraisers. More paperwork. Also, is the collateral in good condition? Well, hire a home inspector and termite inspector.

Next, you don't know if the owner is the "true" owner of the property, nor do you know if the property has encumbrances, such as liens, mortgages, back taxes, potential claims, easements, etc. So, you need a title company to do a title search for you. More paperwork.

I agree. The volume of forms, disclosures, and the like, is ridiculous. And, buyers will rarely, if ever, read all of the fine print. Given the current subprime collapse and alleged deceptive practices by mortgage brokers, it will get worse, all in the name of so-called consumer protection.

Answer 3

The purchasing of real estate for primarily consumer purposes reasons means the transaction is covered by more federal banking regulations, such as the Real Estate Settlement Procedures Act and Regulation Z. These regulations require lenders to disclose more documents than in the case of loans extended for the purchase or refinance of an automobile.

Answer 4

i know it seems like a lot of paperwork, but it is all for your protection. you want to make sure that the house is yours with no liens or problems. The title companies and lawyers (depends on your state) will do a complete title search and make sure that the property is yours and that no one else will come back with a claim to it later. They also need to make sure that all money changes hands properly and that all taxes and utilites are transferred properly and paid by the right person. You can't fight it.

Answer 5

The lender stands to lose much more money than on a car. Hmm, losing $15,000 on a repoed car vs. $150,000 on a foreclosure, huge difference. The process is still easy on both purchases if you pay in cash.

Answer 6

$500,000 house vs $25,000.00 car. I am glad there is more involved when buying a house.

Answer 7

Its like divorce. It comes down from English law and we're still using it.

Answer 8

more money involved!