Top 5 Reasons Why Attorneys Are Necessary For Real Estate Transactions
WOW! The real estate market in America really took a turn, didn’t it? The sub-prime lenders have received the brunt of the blame. However, I blame the purchaser, not the lender for the fall. Yes, it is called “predatory lending”; but why have the persons who signed the documents and had the benefit of living in their “dream home” be given a “get out of jail free” card. There should be some accountability for these persons entering into agreements and sometimes actually receiving monies back from the lenders. Please don’t get me wrong. I do feel sorry for many of the homeowners who were “victims” of predatory lenders; however, I don’t believe that all persons who are part of the foreclosure phenomena are victims. I think that unless there was actual fraud involved in the transaction, the purchaser had the ability to fully read and understand the documents signed, and if any questions arose, a further explanation should have been requested by an independent attorney.
In order to further prevent the failures of the system, certain requirements have been made of lenders. What about the purchasers? This is most likely the largest purchase of the new homeowners life and they are being led by agents and officers who have a financial stake in the transaction. The purchasers should be required to have an independent attorney review all of the documents they are signing in the transaction BEFORE the documents are signed. It’s simple. The process is as easy as hiring Baltimore car accident lawyers.
The purchaser often enters the closing room or meets with the loan officer who quickly goes over the documents. These documents are legally binding and purchasers should have an experienced attorney review the documents before signing.
There are more than 5 reasons why attorneys are necessary for real estate transactions, but I will set forth the top 5.
1) LARGEST PURCHASE OFYOUR LIFE – Attorneys can explain all aspects of the transaction.
Attorneys can walk the first time purchaser through the entire transaction before any binding documents are signed. There are many situations that may arise during the pendency of a real estate transaction. The attorney can assist in keeping the deal together or in the alternative, in getting the purchaser free from the transaction. At a typical real estate closing more than 60 pages are often signed by the purchaser. An attorney can summarize the documents being signed and highlight the important terms so that the purchaser can understand what they are agreeing to. Most attorneys charge hourly or may offer a flat fee for real estate transactions. Most attorneys charge between $175.00 – $300.00 an hour, but may vary depending on experience and location.
2) ISSUES USUALLY ARISE – Attorneys can assist in negotiating issues that arise.
No house is perfect. Inspections performed on behalf of buyer usually disclose defects that were not seen by the Buyer and if the contract allows, the issue of repair and remediation is best negotiated by the attorney. The contract should explicitly state what defect remediation will be the responsibility of the Seller and what will be the responsibility of the Buyer. This is not always the case, however, and it is imperative that an Attorney review the Contract prior to signing so that the purchaser understands that after the contract is signed it will be too late.
3) CONTRACTS ARE LEGALLY BINDING – Attorneys can also prevent a lawsuit.
Attorneys not only assist in explaining and enforcing the contracts. Attorneys help prevent potential litigation by assisting with amending the contract when needed to get the purchaser what it wants and protecting the buyer from being stuck with a house they do not want to purchase. It is imperative that the initial contract signed by the Seller and Buyer be reviewed by an attorney prior to signing the document. This contract is for the purchase of a house. Under the law, the buyer and seller can each enforce a contract to purchase after all contingencies have been met. A party cannot just walk away from a contract to purchase. Many times purchasers are under the impression that all they will lose is their “escrow” or “down payment” monies. This is not always true and many contracts allow enforcement of the contract to purchase for the entire purchase amount stated in the contract, not just the initial deposit.
4) DEED – Attorneys can explain.
Joint tenancy, Tenants in common, tenancy by the entirety – can you explain the difference? Your attorney can. Do you want the property to be held in a land trust? What about a Revocable Trust? What rights do spouses have to the property even if they are not in title? There are advantages and disadvantages for each form of title interest and an attorney can review the implications of each.
5) FREE AND CLEAR – Attorneys can make sure the title to the property is clear.
Attorneys must assure that there are no liens on the property and if any easements or mortgages are shown on a title search, the attorney will assist the purchaser in assuring that all liens are released at the time of closing. In addition, the attorney can review any agreements such as Restrictive Covenants, Easements, Party Wall Agreements, etc. that have been recorded on the parcel.
Only 5 reasons to hire an attorney, but there are thousands of dollars to be saved by simply finding an attorney to review the documents. Not all attorneys may practice in real estate law and you should look for attorneys who advertise that they practice in that area. Hire an attorney to assist in the purchase of real estate, and hopefully many of the “red flags” missed in the prior real estate crash can be discovered before the purchasers enter into agreements they will never be able to perform.