Even if you don’t have an attorney during the process of listing or finding a home and the subsequent negotiations, an attorney can still be very helpful when it comes to finalizing the sale. The purchase agreement is the most important document in a real estate transaction. An attorney can draft this document for you, explain all of the terms and provisions, negotiate the terms with the other party, and also make edits or additions to a purchase agreement drafted by the other party so that it reflects the unique needs of the buyer or seller. The purchase agreement is also where any issues can be addressed, such as:
- What if the buyer plans to change the use of the property? Can this be done legally?
- What if the inspection indicates that a repair is needed? Who will bear the cost of and be responsible for the repair?
- What if the inspector finds hazardous waste on the property?
- What if lead paint, termites, or asbestos are discovered by the inspector?
- Are all the additions and/or alterations made to the property legal?
- What are the consequences if the sale doesn’t take place?
- What happens to the buyer’s down payment if the sale doesn’t take place?
- What is required and is any action needed if there are existing wells or septic systems on the property?
- Is the agreement properly conditioned on the buyer obtaining financing?
- What is the effect of any easements, restrictions, or agreements made by the prior owner and how will these affect your ability to sell the property at a later date?
- How will local zoning laws affect the buyer’s plans for the property
In addition to the purchase agreement, an attorney can also review your mortgage documents and explain the significance of the terms of the mortgage agreement. An attorney can also explain mortgage law and what the lender’s remedies are if you become unable to pay your mortgage.
The last step in buying or selling a home is the closing. The closing is the most important event in the purchase or sale of a home At the closing, typically the parties, a real estate broker, and the attorney for the mortgage company are present. Perhaps the most important reason to be represented by an attorney is the conflicting interests of the parties. Throughout the process, the buyer’s and seller’s interests can be at odds, and there can be conflicting interests even with the professionals involved in the transaction. The real estate broker generally serves the seller and the lender is obtained by the buyer. The broker and the lender want to see the transaction completed because they are often paid on commission or receive performance based incentives. Neither of these parties can provide legal counsel to an unrepresented buyer. An attorney hired to represent a buyer or a seller will serve only the best interests of their client. The closing process can be confusing because it is complex for both the buyer and seller. An attorney can draft all of the required closing documents and explain them to their client. It is very helpful to have a closing statement prepared prior to the closing which indicates the credits and debits of the buyer and seller. An attorney can draft a closing statement for you so that there aren’t any surprises on closing day. An attorney can also be helpful in explaining the nature, amount, and fairness of the closing costs. An attorney is very useful in answering any last minute questions and resolving any last minute disputes between the buyer and seller before the signing occurs. If you are the only person present without an attorney to assist you, then your rights could be at risk. Upon the signing of all documents, title transfers from seller to buyer.
What you risk if you don’t have an attorney: If the buyer or seller tries to back out of the agreement on short notice, you may have to scramble to get legal help. There are also issues that can occur after the buyer has taken possession of the property. For example, if you suddenly find out that the basement is infested with snakes (yes, we have actually seen this happen), then you may need to hire an attorney to get you out of the purchase or to negotiate a settlement to help resolve the issue.
Lastly, there are certain situations in which you should absolutely hire an attorney to assist you in buying or selling a home. You will need legal help if:
- You are the executor or heir of a property whose original owner is now deceased.
- You are buying a home with someone who is not a member of your family. For example, unmarried couples.
- You are separating from your partner or divorcing and want to sell the family home.
- The property you are buying is in probate or foreclosure or is a short sale.
- You are selling a property that is in some sort of financial distress.
- You want to sell a property with judgments or liens against it.
- You are aware of issues such as lead paint, asbestos, termites, or hazardous substances existing on your property and you want to sell it.
- You are buying a townhome, condo, or a home in a development with homeowner’s association rules.
- You don’t trust the other party, their realtor, or even your own real estate agent.
When making one of the most important decisions in your lifetime, it is important to have someone to ensure that your interests and needs are paramount. Our attorneys can help with buying or selling a home regardless of what phase of the process you are in. Call 952-445-2817 for more information.