It can be an exciting time when you decide to buy a home. Maybe you just landed a new job, just got married or are expecting a new baby. Sometimes, real estate transfers become necessary because of stressful events in your life such as when the care of your home becomes too much to handle. Regardless of why you enter the real estate market, most people do so without a great deal of experience.
As you start this journey, we hope that you research your options and consider contacting your attorney right at the beginning — before you sign a sales agreement. While many people move through a real estate purchase safely with the assistance of real estate agents, bankers and closing agents, we want you to consider their interest in your particular transaction and their role in this process.
The real estate agent, who customarily represents the seller, is responsible for securing a buyer and then closing the deal. The agent will help a seller value the property, advertise it and market it for sale, show the property to prospective buyers, and then help place the property under contract to a buyer who is willing to meet the seller’s demands. The real estate agent is also there to answer questions about the quality of school districts, the tax rates of various municipalities, character of neighborhoods and the travel time involved in commutes to work or local stores. This is a real estate agent’s area of expertise, but remember, typically, the real estate agent represents the seller.
A banker’s role is to loan prospective buyers money to finance the purchase of a home. Bank representatives deal with questions about mortgage financing, interest rates, loan origination fees, title insurance and closing costs. The banker does not represent the buyer since the banker is chiefly concerned with making an appropriate type of loan to a qualified buyer and thereafter securing the bank’s position with regard to the repayment of that loan.
The closing agent is responsible to collect the purchase price, record all of the documents at the courthouse and complete, in a timely fashion, all of the paperwork that may be required by the lender to complete the deal. The closing agent may have been suggested to the buyer by either the real estate agent or the banking institution. Again, the closing agent’s role is to make certain that title to the property passes to the buyer and that the bank’s loan documents are in order and are properly recorded to insure the bank’s security interest in the property.
The roles of the real estate agent, banker and closing agent are important roles and are pieces of a larger puzzle, but they do not represent all of the pieces of the puzzle. None of these people protect the interests of the buyer in a real estate transaction the way an attorney can. Since purchasing a home is one of your biggest investments, you should bring an attorney into the picture as soon as possible.
We are distressed when we see how devastating a real estate deal gone bad can be for all parties concerned. If a septic system is not in working order, a house is damaged or infested by termites or is discovered to have mold in the basement, then these are problems that a buyer owns after the transaction is completed. The cost of correcting these home repair disasters can be extremely expensive, especially if it results in litigation.
Many times we review what has happened during the process of closing a real estate deal after it has gone bad and realize that, if an attorney had been involved in that process, the bad situation may very well have been avoided. That is the attorney’s part of the puzzle. The attorney is your advocate and can work hand in hand with the realtor, banker and closing agent to hopefully minimize your risk and potential for difficulty.
Your real estate attorney can help you negotiate the terms of your sales agreement, including contingencies such as the sale of your present home, securing appropriate financing, and performing inspections and tests. You also need advice regarding the time deadlines and the waiver language contained in these agreements.
Further, the attorney can give the buyer a voice in securing good and marketable title. As a buyer, you are responsible for obtaining a title search. A title search is a record search of the property and all previous owners to make certain that there are no outstanding claims or liens filed against the property, that ownership of the property is clear, taxes have been paid, and rights of way or restrictions have been explained. With this advice, you have protection that would perhaps not have existed if the title search and closing were simply handled by the bank’s closing company.
The need for legal counsel as part of a real estate transaction applies equally to buyers and sellers. At QuatriniRafferty, we have experience helping both buyers and sellers and want to help you avoid making a costly mistake during your real estate transaction.
For more information please visit our Wills, Estate Planning, Estate Administration and Probate Information page.
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