Buying a home is a large and significant investment in a person’s life. It involves learning and understanding the law of real estate. There are different issues and concerns that may arise in every transaction and these issues constantly change depending on the state, location of the property, etc.
Real estate lawyers are trained to deal with these types of problems. An ordinary lawyer does not perform as efficiently as a real estate lawyer with experience. Real estate lawyers are experienced, seasoned, and updated when it comes to all the different types of real estate transactions.
BUYING A HOME
The seller usually enters into a brokerage contract with an agent in writing. The broker then finds a potential buyer and then negotiates until they come into an agreement. The buyer and the seller finalizes it and enter into a formal written contract called the purchase agreement. The buyer is obligated to commit to financing. After doing a title search, the property is transferred to the buyer.
It seems like a pretty simple task but without a lawyer, there are certain things that may be overlooked or overwritten. Real estate law constantly changes, which is why it requires consultation and professional advice.
AVOID UNCLEAR OR VAGUE TERMS
One common problem that a lawyer can help you with is making sure that all legal problems and issues that may arise are dealt with. Realtors have the habit of using standard forms but do not cover all the circumstances. This can be customized, especially for unusual circumstances.
If there’s no agreement drawn up, the seller may become liable to pay commissions even if the sale isn’t final. The seller may need to pay more than one broker commission as well so they should seek advice. Standard forms can be revised if necessary and thoroughly checked before an agreement is signed.
CONSIDER A CONSULTATION
Even if you think that you don’t need a lawyer for the negotiation, both the buyer and seller may have to consult with each other to answer important questions about tax consequences. Tax consequences are critically important for the sellers.
If the seller makes a large profit, the income tax consequences of the sale may be considerable. A lawyer can help give financial advice in terms of tax provisions. This way, they may allow the exclusion of the capital gain in the agreement to come up with a considerable price for the property. Overlooking this may cause issues or problems.
This is the most important document in the transaction. Even if it’s a standard form, ask a lawyer to go through it and explain the details to you. Necessary changes may be made to reflect both party’s desires.
Common issues are:
Altered property – If additions were made lawfully.
Changing the property – Are the buyer’s plans for the property lawful?
Engineer/Architect inspection – What if asbestos, radon, termites, or lead-based paint are found?
Closing – The mode of payment and financing. If closing doesn’t take place, what are the legal consequences? It also covers escrow and mortgage loans.
The purchase agreement should be specific, clear and carefully worded.
The seller’s title needs to be established to the buyer and financing institution’s satisfaction. The title search is ordered from the insurance company. It’s not typically done in some states but a lawyer’s review is essential to build the status of the title in line with policy.
If title insurance is required, a lawyer can explain title exceptions. They can determine what’s not insured and explain certain restrictions in the agreement imposed by the previous owner that may impair the buyer’s ability to sell the property. Do note that the title search cannot determine existing or prospective zoning – only lawyers can explain zoning ordinances.
This is the most important event of the sale transaction. All the necessary documents must be prepared by both parties and all payments must be secured from the buyer’s side. A closing statement is prepared to indicate the debits and credits to the buyer and seller. A lawyer is essential in explaining and ensuring the fairness of the closing statement.
Lawyers ensure that the documents are executed appropriately and are explained to all parties involved. It may get confusing without an attorney who explains everything, especially when there are last-minute disputes. You may risk losing your rights without a lawyer.
HOW AN ATTORNEY CAN HELP IN BUYING OR SELLING A HOUSE
A real estate agent or broker serves the seller by negotiating on his or her behalf. The lender, on the other hand, is obtained by the buyer. Both broker and lender set the goals on seeing the deal go through since this is the way that they will both get paid. They’re a huge help in getting your house in the market.
Neither of the two parties can provide legal counsel. Only a lawyer can give you the peace of mind that you need in making a big life decision. Consider speaking with an experienced real estate lawyer now.
Based on Materials from FindLaw
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