June 18, 2013

Do I Need an Attorney for a Real Estate Transaction?

by: Richard M. Malad, Attorney
Typical real estate transactions involve a buyer, a seller, and real estate agents who represent each of the parties involved in the transfer of ownership of the property. Including an attorney in your real estate transaction can help either party ensure that their interests are being protected.
Day213 Blue Front DoorYou may be wondering why you would need to hire an attorney. Regardless of whether your transaction is typical or not,. An attorney can provide valuable assistance to make sure your interests are well represented in the transaction. Below are a few facets of the real estate transaction that an attorney can help you with.

1. Purchase Agreement

If you are a buyer, you might want to make sure you have some “outs” if things don’t go right. Conditioning your offer on being able to obtain acceptable financing can provide you peace of mind as you work with lenders. Including a provision for an acceptable home inspection can help you identify any defects in the home and protect your investment. Payment of property taxes can be negotiated. Proration or assumption of taxes can cause a swing of thousands of dollars for a buyer or seller.
2. Closing
An attorney can review the title commitment for either the seller or buyer to explain any exceptions that it might disclose. Some title issues can easily be cured and some cannot. The buyer and seller both need to be aware of any concerns with the chain of title, property liens, and other items.
An attorney can also review the HUD-1, or closing statement to ensure that it matches what you have agreed upon in your purchase agreement.

3. For Sale by Owner (FSBO)
–These transactions involve a seller who is not represented by a real estate agent. An attorney can assist you in these transaction by handling the following types of issues: Negotiate and prepare the purchase agreement
      &nbsp• Order title insurance
      &nbsp• Negotiate issues with any home defects which may show up in an inspection
      &nbsp• Coordinate the closing
      &nbsp• Review the HUD-1 closing statement to ensure that it matches what the parties have agreed to
      &nbsp• Attend the closing to help with any explanation needed
4. Contract Sales
If a buyer cannot qualify for a mortgage for reasons such as poor credit, lack of adequate income, or inadequate down payment, a seller may be willing to sell his house on contract. This is also referred to as a land contract or contract for deed. In a contract sale, the seller keeps the deed for the real estate in his name and agrees, by contract, to accept a down payment and payments with interest from the buyer, The title to the real estate will be deeded to the buyer once the contract is paid off.
The contract sale of a property can be very complex. You would be well advised to hire an attorney to assist you in this type of transaction regardless of whether or not a real estate agent is involved.
Purchasing or selling real estate is one of the largest financial transactions a person can make. This can cause a lot of stress for people who have little experience in these transactions. In the past 39 years, I have helped lots of people who have bought and sold real estate. An attorney can help save time, money, and frustration. Most of all, an attorney provides a buyer or seller comfort that his or her interests are well represented in a real estate transaction.

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