Ten Questions You Must Ask Owners before You Ever Buy a Real Estate Option

Prior to buying a real estate option, make certain that you have the property owner sign a property disclosure statement approved for use in your state in the presence of a notary public, which asks the following 10 questions:

1. Are there any hazardous substances at, on, under, or about the property? The term hazardous substances shall mean and include those elements or compounds that are contained in the list of hazardous substances and toxic pollutants adopted by the U.S. Environmental Protection Agency (EPA) or under any hazardous substance laws.

2. Have any documents ever been filed in the public records that adversely affect the title to the property?

3. Are there any liens against the property for unpaid bills owed to architects, surveyors, engineers, mechanics, laborers, and materialmen?

4. Are there any actions, proceedings, judgments, bankruptcies, liens, or executions recorded among the public records or pending in the courts that would affect the title to the property?

5. Are there any unpaid taxes, claims of lien, or other matters that could constitute a lien or encumbrance against the property or any of the improvements on it?

6. Have any improvements been placed on the property in violation of applicable building codes and zoning regulations?

7. Are there ongoing legal disputes concerning the location of the boundary lines of the property?

8. Is any person or entity other than the owner presently entitled to the right to possession or in possession of the property?

9. Has the title or ownership of the property ever been disputed in a court of law?

10. Are there any unrecorded mortgages or deeds of trust and promissory notes for which the property has been pledged as collateral?

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