Why you need a lawyer for a real estate transaction?
Nearly everyone, at some time in life, faces the need to buy or sell real estate. Because the purchase of a house is probably the largest single investment a typical person will ever undertake, any buyer or seller should carefully consider the practical and legal complications of such a transaction before proceeding. The following information described the real estate purchase and sale process.
Contracts
As a buyer, once you have found the house you want to buy and have agreed on the price, you will probably be asked to sign some kind of document and pay a deposit. This document may be called a binder, receipt, purchase offer or agreement. The seller’s agent usually prepares it (upstate, usually a real estate agent/broker; downstate, usually the seller’s attorney). If a real estate agent or broker prepares a contract, it will usually be subject to approval by the parties’ attorneys within a specified short time.
Any one of these papers may constitute a binding contract obligating you to purchase the house. Before signing it, you should consider seeking legal advice. Once you sign a contract, your rights and obligations are determined. Your attorney may no longer have the opportunity to structure the contract to meet your objectives.
Whether you are seller or buyer, you should understand the contract terms and how they affect you. Other parties to the contract probably have no obligation to tell you what the contract means. You may not understand the legal meaning of much of the terminology or what must be changed or added to protect you.
So, if you plan to have an attorney represent you in the transaction, the time to consult one is before you sign anything – or immediately after you sign a contract that is subject to attorney approval.
The contract of sale will identify the parties and the purchase price and how it is to be paid. It should adequately describe the property to be sold, the type of deed to be delivered, the quality of the seller’s title to the property, a description of personal property included in the sale, and the date the buyer will take possession. It should also cover dozens of other issues about the property and the responsibilities of the parties to each other.
The contract should in most cases let the buyer cancel the contract if the buyer can’t obtain a mortgage loan or if the sale falls through for some other reason that isn’t the buyer’s fault. In each of the se cases, the buyer should receive back it deposit.
Sometimes a seller wants to stay in the house after closing while arranging new accommodations. Although this can be risky to a buyer, it does occur, and the attorneys can work out an appropriate arrangement to protect both parties’ interests.
Title
The “title” to real estate means the right of the owner to its peaceful possession and use, free from the claims of others. The exercise of that right is, however, often limited by other rights, such as “easements.” To obtain electricity, sewer, telephone, and other service, an owner often gives the municipality or public utility the right to run its lines or pies across his or her property to the house. Other easements and restrictions often encountered relate to drainage of surface water, or access rights of way such as for a jointly used driveway. An owner must comply with these easements and a buyer needs to consider them.
An owner’s use of its property may also be limited in other ways. Deed restrictions might apply. So might local zoning law. Almost all land is subject to real property taxes. If those taxes are not paid, the owner may lose its real property. The property may also be subject to other debts, such as special assessments or levies. If not paid, these obligations may create their own problems.
When you buy a house, you need to know that you have the right to occupy it without interference and that you later will be able to sell or mortgage it without problems.
After you sign a contract as a buyer, you should satisfy yourself that the seller can convey to you title to the property as the contract requires. In different areas of the state, buyers use a range of methods to confirm the seller’s title.
Title insurance does not eliminate the need for an attorney. Although it may protect you against financial loss and the possible expense of defending your title in court, it does not lesson the importance of your attorney’s advice. Your attorney can advise you about whether and how to obtain title insurance and also on its terms, exceptions, and limitations. Title insurance does not cover zoning or environmental issues at all.
Closings
The most important reasons for retaining an attorney for your closing occurs at the time of closing. Your attorney is there to make sure that you receive good title from the seller ( that you receive what you paid for).
Up to this point, your attorney has worked in conjunction with your bank or mortgage broker to secure the necessary financing to purchase your home. Your attorney will ensure that the documentation necessary for the purchase is in place and that you understand your financial obligations to the lending institution.
Before any monies are exchanged between you and the seller, your attorney will review the Deed and Affidavit of Title from the seller. Your attorney will have to review your title work and address any issues raised in the title work as it relates to your purchase.
All of this means that you will have peace of mind when you move into your new home.
For more information, contact us at info@hjslawoffice.com