The biggest asset you will ever own is a home, so whether you are purchasing a condo, starter home or a mansion, it is a transaction that would go much more smoothly when you hire an attorney who specializes in real estate transactions. A real estate lawyer is experienced in the law of real property, skilled in dealing with any issues or problems that may arise during the home-buying process. In some states, lawyers may be specialized as “Real Property Specialists”.
Real estate attorney
In most home purchases, the home seller enters into a written brokerage contract with a real estate agent, generally before the home is put up for sale. Once the real estate agent finds a potential buyer, negotiations are then conducted through the broker, who often acts as an intermediary. When a handshake agreement, or informal agreement is reached between the parties, the buyer and seller then enter into a formal written contract for the sale of the home. This is known as a purchase agreement. The purchase agreement is the single, most-important document in the transaction. Although standard printed forms are helpful, a boilerplate document is not always the preferred way to go, thus, a lawyer is helpful in explaining the form and making changes and additions to reflect the buyer’s and the seller’s desires. There are many issues that may need to be addressed in the purchase agreement; below are some common examples of what issues may get “ironed out” in the purchase agreement, like questions or potential problems concerning the property itself:
- Has the property been altered, i.e. has there been an addition to the property, and if so, was it done lawfully?
- If the buyer has plans to change the existing property, may the planned-for changes be done lawfully?
- What happens if a buyer has the property inspected by an engineer or architect and termites, asbestos, radon, or lead-based paint is found?
- What if the hazardous waste is found on the property?
A purchase agreement is valuable as it documents financial ramifications pertaining to the sale, like:
- Suppose the closing does not transpire, then what are the legal consequences. and what happens to the down payment, or, will that down payment be held in escrow by a lawyer in accordance with appropriately worded escrow instructions?
- How is payment to be made?
- Is the closing appropriately conditioned upon the buyer obtaining financing?
After execution of the purchase agreement, it then starts the ball rolling on the sale. The buyer must secure a commitment for financing. The real estate attorney will do a title search to satisfy both the lender and the buyer. When these items are accomplished, only then is the property ready to be formally transferred from the seller to the buyer, and the seller then will receive the purchase price as negotiated for in the contract. As recited above, you see that there are multiple steps to get from simply browsing at homes, either by participating in a virtual walk-through for the property online, or by quickly scoping out the neighborhood and the exterior of the home by doing a “drive-by” view. While the steps may seem simple and seamless, without a lawyer on board throughout the process, the consequences may be more disastrous if the home turns out to be a “lemon”, or not as depicted. For example, a real estate attorney, with a lot of experience in this endeavor, may be able to help you avoid the most-common issues involved with a home purchase or sale.
Even if the parties feel an attorney is not needed during the course of negotiations, the buyer and seller may each have their own set of questions of a financial nature pertaining to the sale or the tax consequences during the course of the transaction. For example, a seller wants to ensure that tax consequences are not formidable and that is where an attorney might come in handy, as he or she will assist in allowing for exclusion of capital gains in certain circumstances. If you are looking to purchase a home you should consult with a real estate attorney in New Jersey.
Additionally, employing the skill of an expert who deals with real estate matters on a frequent basis means he or she has honed that craft to perfection and will be able to tackle any issues that crop up based on experience. A real estate attorney is able to review and interpret the purchase agreement language, make suggested recommendations and help to make the transaction go smoothly for you. An attorney will be able to decipher legalese and help you interpret the various types of mortgages available to you as well as mortgage loan documents. Additionally, after this purchase agreement has been executed, a title search will be ordered to establish the state of the seller’s title to the property to the buyer’s as well as to the financial institution’s satisfaction. An attorney will help review the title, determine if the legal description is correct and review any legal restrictions.
Finally, a real estate attorney can help assist you with any last-minute details that may crop up at the closing, which is the most-important event in the purchase and sale transaction. The deed and other closing papers must be prepared so that title passes from seller to buyer, who pays the balance of the purchase price. While this balance is generally paid in part from the proceeds of a mortgage loan, there should be a closing statement prepared in advance of the closing delineating all debits and credits to the buyer and seller. Thus, an attorney is extremely helpful to have for explaining the nature, amount, and fairness of closing costs. Once the deed and mortgage instruments are signed, an attorney can assure you that these documents are appropriately executed and explain any details to the various parties.
The closing could be somewhat confusing and/or complex, especially to first-time buyers. Having a seasoned pro like a New Jersey family law attorney on hand to smooth the way is really essential for a seamless process to take place.