The purchase or sale of a home is one of the largest transactions a couple or individual will make in their lifetime. If you are buying or selling a home with complicated terms, are dealing with short sales or foreclosures, or if you are a real estate investor in need of counsel, consult a real estate attorney to review your contract(s), negotiate terms, and ensure you understand the transaction.
The Complexities of Real Estate Contracts
Real estate contracts can be somewhat perplexing, particularly for first-time homebuyers or those without a legal background. Both residential and commercial real estate contracts comprise various steps and procedures about which you might wish to consult a lawyer, such as:
- escrow and taxes;
- following the steps necessary to replace any lost or missing documents;
- subdivision of property;
- reviewing the deed and mortgage loan;
- owner-financed transactions;
- loans and foreclosures;
- negotiating prices;
- seller’s liability for repairs after closing;
- purchase and sale agreements;
- drafting or revision of leases; and
- exiting contracts when defects or discrepancies are found.
Do you need an attorney, or will a real estate agent suffice?
Many people assume that their real estate agent will be able to prepare the purchase or sale contract. However, real estate agents are limited to standard form contracts and do not provide legal advice on terms of sale, property conditions or remedies.
It’s important to know exactly what you’re agreeing to when you sign a real estate contract. You will be bound by the law to uphold the contract once you sign it. Therefore, it’s best to consult an attorney proficient in real estate law to help you navigate transactions, rather than rely solely on an agent with minimal training.
In fact, having an agent and an attorney work in tandem on your behalf can be a cost effective way to facilitate fair and advantageous real estate transactions with a piece of mind that your rights and best interests are being protected.
How Much Is Your Property Really Worth?
This is a difficult question, especially in a volatile market. A qualified appraiser can provide you with an opinion of value, but it is just an opinion based upon an analysis of the market in the immediate area. Another approximate value is provided by the county assessor. This amount is mailed to homeowners each year and is the basis for calculation of your property taxes.
A realtor can do a market analysis, often for no charge. A certified appraiser typically will charge from $500-$1,000 for a simple residential appraisal.
However, when prices are changing rapidly, the only accurate measure of a property’s value is what a willing buyer is prepared to pay, and this is only known once a sale is consummated.
What is “Title Insurance”?
One misunderstood aspect of any property purchase is the function of title insurance. You pay for it, but few people recognize just how valuable it can be.
Most insurance policies insure you against events that have not yet occurred. For example, your automobile liability policy only comes into action if there is a covered event, such as an automobile collision where you have some degree of fault. Or, your homeowner’s insurance policy provides coverage in the event that you have a theft, or other covered event.
Title insurance is there to cover events that have already occurred, but are not discovered until later. This mind-bending concept is easier to illustrate with an example.
From time-to-time, a builder may misread a drawing and actually build a house in the wrong place. Neighbors may live together in harmony for years, until one of them has a survey and discovers that their neighbor’s house actually encroaches onto their property. Some, (but not all) title insurance policies will cover this occurrence.
The only way to determine whether you have a covered event is to read your title insurance policy carefully. A good lawyer, experienced in title insurance, may be needed due to the complex language present in many title insurance policies.