Are you planning on buying or selling a house? Then you should know that real estate transactions tend to be the most significant part of your life. They also involve real property law which raises special issues and problems which might not arise in other transactions. A real estate attorney such as a Yuba County, CA Real Estate Attorney is experienced in dealing with such issues and is trained to deal with them.
Purchasing a Home
In a typical house purchase, the seller would enter into a contract with the real estate agent in writing. When a potential buyer is found by the broker, the negotiations would be conducted through a broker who would act as the intermediary. After an informal agreement has been made, the buyer and seller would enter into a legal contract that is the purchase agreement. Then, the buyer would obtain a commitment for the financing of the purchase. The title would be searched to satisfy the buyer and the lender. Finally, the property would be transferred to the buyer from the seller. The seller would receive the agreed purchase price as mentioned in the contract. It might seem like a simple process but without an attorney, the consequences could be disastrous.
Avoid Unclear or Vague Terms
There are certain issues with the home sale or purchase which can be avoided with the help of an attorney. For instance, a seller might sign the brokerage agreement which does not cover certain legal issues. The truth is that it is a common situation and realtors tend to use forms that are standardized thinking that such forms would cover all the situations or be customized easily to cover unusual circumstances.
If in agreement, there is an absence to the contrary, the property seller might find himself/ herself liable to brokerage commission payment even when there is no sale at the end or might need to pay a lot more as compared to the prescribed brokerage commission. Such a problem might be avoided in case the agreement had allowed the seller to negotiate in the first place on personal behalf.
The realtor’s rights can be negotiated with the help of a lawyer in case the property seller considers to withdraw his/ her house altogether.
The guidance and advice of a lawyer are vital when it comes to an agreement. The terms should be explained to the seller in all cases if the agreement is available in a standardized form and revised if needed. The attorney will also determine whether the agreement has been properly signed or not.
If you feel that an attorney is not required during the negotiations, both the parties still have to consult with their lawyers to understand important terms and conditions as laid out in the contract in case of tax implications of the real estate transaction. The mentioned tax implications should be crucial to the seller. For instance, income tax needs to be paid by the seller after the sale, especially if a huge gain is made by the seller. A lawyer will advise whether there are tax provisions that the seller might take benefit of such as which allow for capital gains exclusion under specific conditions.
Considered as the single most important document in your real estate transaction, the purchase agreement is often available in a standard form. That is why it is a good idea to have your attorney explain the form to you and make changes or additions if needed to reflect the seller’s or buyer’s requirements. Various issues have to be mentioned in the agreement of sale such as the ones mentioned below.
- What would happen in case the property were to be found containing hazardous waste?
- What would happen if an architect or engineer is hired by the buyer to have the property inspected and there are asbestos, radon, or termites are found in the property?
- If any changes had been made to the property, would there be any legal consequences and what is the procedure to do so?
Many questions need to be asked and only an attorney can offer you the answers to such questions. Certain crucial details need to be considered such as the down payment, the need for an escrow account, the procedure for payment and related issues.
A significant portion of the purchase price for the house is financed with the help of a mortgage loan from a financial institution by most of the buyers. A carefully worded provision should be included in the purchase agreement that specifically states that the buyers need to obtain a commitment for financing.
Once the purchase agreement has been signed, it is important to establish the seller title’s state to the buyer and lender. A title search is generally ordered from a title insurance company. The status of the title should be reviewed by the attorney.
Title insurance might be customary where you live and a lawyer can review the title search to explain the title exceptions in detail so that you can understand what is not insured and the legal description can be determined whether it is correct or there are problems with prior owners. The effect if agreements and easements can also be explained to better understand the restrictions imposed by the prior owner. It will allow you to determine if you can sell the property in the first place.
Finally, the closing is the most important event in the real estate transaction. The deed and other documents should be prepared. The title will pass from the seller to the buyer. The attorney will help with the confusing process to both the buyer and seller. There is always a possibility of last-minute disputes which is why having an attorney present can help ensure that matters are taken care of. Moreover, if you are the only person without a lawyer, then your rights are at a greater risk of being violated without you even knowing.