THE ROLE OF THE REAL ESTATE LAWYER
You are not required to have a lawyer for a real estate deal. (You can also fix your own transmission and fill your own cavities.) The cost of a lawyer is small, and the benefits are large – perhaps huge. This process is fairly complex and involved, but for a real estate lawyer with experience in these matters, it is rather routine (usually!) Gone are the days of the simple handshake and well wishes. Most people feel that the fees charged by lawyers in this field are very reasonable and “well worth it.”
Real estate agents are experts at marketing homes and matching buyers with sellers. Without their skills and efforts, buyers and sellers would have a very difficult time finding each other. Once the deal is made however, each party needs to look out for its own best interests, and each needs to comply with the requirements of the contract and government rules and regulations – that is where the lawyers get involved.
FOR A SELLER
From the time your house is listed for sale through the closing and beyond, selling a house is a process fraught with peril and potential traps for the unwary. What you don’t know could cost you thousands – perhaps many thousands of dollars.
The attorney for the seller first reviews the contract for legal sufficiency, and sometimes suggests modifications that would put his client in a better position. Many times the signing of the contract is just the start of the negotiations.
Professional home inspections often reveal concerns about the house that the buyer wants to have corrected prior to closing, and sometimes the seller is willing to address the concerns – sometimes not. The lawyers are usually the ones to negotiate these issues and then put the agreement in writing.
Once the parties have reached their final agreement, the buyer gets started on the process of securing mortgage financing. The attorney for the seller begins the task of assembling and drafting all of the documents that will be necessary to transfer the house to the buyer.
A search of the county records must be ordered to determine the current status of the title to the property. Who is the owner of record? Are there any liens or claims against the title? Is there an outstanding mortgage? Taxes? Is the house in a trust? A plat of survey must be ordered to show the lot lines, easements, encroachments and other possible concerns with the physical property. Any problems revealed by the title search and/or the survey must be dealt with so that clear title can be conveyed on closing day. If the property is a condominium, a paid-assessment letter must be obtained, as well as the legal documents that must be turned over to the buyer. Some towns now require inspection of the property and payment of water and other bills prior to issuing their transfer stamp (without which the deal cannot close). Mortgage payoff letters must be ordered. Transfer tax forms must be completed in order to obtain the required stamps from the state, the county, and in many cases the city or village.
Duplicate property tax bills must be obtained and calculations made to ensure that a proper credit is given at closing so each party pays its correct share of the property taxes. Documents of conveyance must be prepared for the seller to sign at or before closing - Deed, Bill of Sale, Affidavit of Title – to name just a few.
Once all of the papers are obtained or created, the lawyer for the seller will schedule and attend the closing – sometimes with the seller, sometimes without the seller. With pre-signed documents and a Power of Attorney, the seller need not actually attend the closing. Arrangements can be made for the proceeds of the sale to be delivered to the seller after closing, or even wired directly to the seller’s bank.
FOR A BUYER
From the time you start looking for a house through the closing and beyond, buying a house can be a confusing process filled with anxiety. Throughout the process you are expected to take direction from several people, all of whom expect to be paid and all of whom expect you to trust them and do what you are told. You are expected to reveal your most personal and private information, as well as to spend large sums of money. What you don’t know could cost you thousands – perhaps many thousands of dollars.
The attorney for the buyer first reviews the contract for legal sufficiency, and sometimes suggests modifications that would put his client in a better position. Many times the signing of the contract is just the start of the negotiations. Professional home inspections often reveal concerns about the house that a buyer wants to have corrected prior to closing, or to receive a credit so he or she can make the repairs after closing. Sometimes the seller is willing to address the concerns or give the credit – sometimes not. The lawyers are usually the ones to negotiate these issues and then put the agreement in writing (or get you out of it!)
Once the parties have reached their final agreement, the buyer gets started on the process of securing mortgage financing. The attorney for the seller begins the task of assembling and drafting all of the documents that will be necessary to transfer the house to the buyer.
At the closing, the attorney for the buyer will review and explain all of the mortgage papers (and there are many), and work with the title company and the attorney for the seller to “close” the deal. Calculations will be checked to be sure you pay exactly what you should and nothing more. Legal documents will be reviewed to make sure that when you walk out of the closing you actually own the house.