Buying or selling real estate can be fraught with disaster; doing it wrong can cost you much more than what you are paying for the Property. Their are five things you must know before buying or selling real estate.
- Contract:Real Estate contracts must be in writing. There are some exceptions, but those are few and far between and can easily end up in costly litigation. A written contract is absolutely necessary. Beware before you sign the contract. It is a binding obligation, and one that you may not be able to undue or alter. Avoid disaster by having a qualified attorney, knowledgeable in the area of real estate, review and advise you on the contract before you sign it. The legal fees you may incur can be miniscule compared to the financial disaster that you may face with a poorly drafted contract.
- Realtor:A good realtor can be the difference between a bad deal and a good deal. A knowledgeable realtor will guide you as to the financial aspects of buying or selling a property. They have access to the multiple listing services which provide access to a multitude of other realtors who have buyers and sellers hunting for properties to buy and sell. The obligation of the buyer’s realtor is to his buyer to find the best property for the least amount of money. The obligation of the seller’s realtor is to the seller to sell the property for the highest amount possible. Do not get confused as to whom you are talking and what you are saying. If you are a buyer and you say to the seller’s realtor that you are offering $xxx,xxx.00 but are willing to pay $yyy,yyy.00, that realtor’s obligation is to the seller and must tell the seller. By law, a realtor cannot give legal advice. Good realtors know this and will always advise you to have legal counsel. Not only is it good advice, but it also reduces their risk of being accused of crossing the line and providing legal advice without a license. If the realtor has not figured that out, you do not want them representing you. What else have they not figured out?
- Title Insurance:It insures you from defects in title. Title insurance is a must in every purchase. The premium for this insurance is paid once at the closing and lasts for as long as you own the property and beyond if a title defect comes back to haunt you. The title company will issue a title commitment prior to closing and issue the actual policy after closing. These need to be reviewed carefully by your attorney. There are exceptions in the commitment/policy. Some are standard exceptions and some are specific to the property. Most title companies will remove certain standard exceptions if requested by the attorney. Many times your attorney will find that a specific exception does not even apply to the property and should be removed. Sometimes there are restrictions affecting the property which affect the use of the property which is contrary to the buyer’s intended use. Review of the commitment and policy is one of the ultimate roles of an attorney in a real estate transaction. The removal of an exception can mean the difference between being covered and not covered for a problem down the road.
- Caveat emptor:Caveat emptor is Latin for “Let the buyer beware.” This applies to the real estate transaction. The physical condition of the property is not something that either your realtor or lawyer will opine upon. A good realtor and a good lawyer will advise you to have the property thoroughly inspected, and will provide so in the contract. In certain consumer real estate transactions there is a property disclosure form provided by the seller, but if you read the form and if you read the real estate contract itself, you will probably find provisions that state that you are relying solely on your own examination of the property. Again, there are some exceptions, but these exceptions are few and far between, and can result in costly litigation. Find qualified people to inspect the property and understand through your attorney the procedures and time frames that apply in the event that you find a problem with the property.
- Lawyer:Know the role of your attorney and make sure you bring him or her into the transaction as early as possible. The contract is the road map for the transaction, and therefore, if your attorney is involved in its creation, he or she can help assure that the transaction is on the right path. Your lawyer should always be there for any complications that arise during the transaction. As indicated above, the lawyer’s role in the title and title insurance is paramount. Even if you do not remember anything I have written, remember, HIRE A LAWYER. A real estate transaction is often a person’s largest transaction of their life time. To do it without legal counsel is foolish. Even if it is not from our firm, hire a lawyer, knowledgeable in this area. Not all attorneys know this area. We have been hired by other lawyers to represent them in the real estate transactions. Likewise, when we are involved in a real estate transaction in a state outside of our area of practice, we will hire a real estate lawyer in that area. The fact that attorneys hire lawyers for their real estate transaction is testament to absolute necessity of one in the real estate transaction.
Learn more about the real estate attorneys at Joseph & Joseph.