Real estate comes with a high price tag. When you go to purchase property, saving money becomes a priority. You can do so by handling closing tasks on your own. Before deciding to go this route, learn whether doing so is legal in the state where the property is located.
Some states require a
local real estate attorney to handle all closing duties. Texas is not one of those states. Often, buyers and sellers rely on their title company and escrow officer to ensure all paperwork is in order. Nevertheless, it never hurts to have an attorney review the documents. Why might this input be beneficial?
Expert Advice
Buying or selling a property is a life-altering decision, one that comes with a hefty price tag. Any mistakes could come with long-term financial consequences, ones the buyer or seller can avoid by using an attorney. They are familiar with all aspects of the real estate purchase process and can identify areas of concern so the buyer or seller may rectify them before completing the transaction. When is it wise to hire this professional?
Lien Concerns
A buyer or seller should always work with an attorney if there are liens on the property. These liens could hold up the transaction. Once the attorney sees they are present, they begin taking steps to have the liens removed so the sale proceeds smoothly. The attorney works with the title company to ensure all parties receive their monies. In addition, the attorney works to uncover hidden liens that could impact the sale.
Short Sales
Short sales come with extra rules and regulations. If any steps are missed, the sale might come to a halt. Avoid this by working with a real estate attorney. They have experience with these types of sales and walk clients through the complexities to ensure there are no delays in the completion of the transaction.
Joint Sales
Two or more individuals might choose to invest in a property together. Unlike married couples, each party has their interests when completing the transaction. Every partner in the transaction should work with an experienced real estate attorney to protect their interests rather than using one lawyer for all parties.
Property Auctions
Countless individuals believe they can get a good deal on a property at auction. However, buyers must take care when purchasing real estate using this method. In addition to many localities not allowing an inspection of the property before purchase, a buyer will find they have limited time to finance the purchase. Most localities require a large down payment on the auction date and payment in full within a matter of days. Often, the buyer must pay in full the following day.
Before purchasing property through an auction, a buyer should consult with a real estate attorney. The attorney can do a title search and more to uncover any potential problems with the property that could affect the new owner. This information is helpful when determining whether to proceed and how much to bid on the real estate.
Divorce Sales
Working with an attorney when going through a divorce is helpful. However, a divorce attorney might not be the best person to consult when it comes to discussions regarding property owned or purchased during the marriage. Having a real estate attorney at closing ensures each party receives fair treatment and the sale or transfer of the home is completed properly, so the former spouse with no financial interest in the property is free and clear of this property once the closing is finalized.
Property in Another State
A person might choose to buy a property in another state before ever physically stepping foot on the property. Doing so has become more common in real estate markets with limited supply and extreme demand. Buyers know they must act quickly or risk missing out on a property they want.
In this type of situation, having a real estate attorney at closing to represent the buyer is essential. Virtual closings have become commonplace in recent years, but this doesn’t mean they require less scrutiny than traditional closings. The attorney ensures nothing is overlooked, so the buyer has confidence in the transaction and that the property is now theirs with no concerns.
Properties with Structural Damage
No person wants to deal with buyer’s remorse after spending a large sum of money to purchase a property. When damage or defects are found within days or weeks of this purchase, remorse is expected. Work with a real estate attorney to ensure all damage and defects are reported before or during closing. Ask that the attorney put provisions in place to handle any damage and defects the seller should have reported. The buyer may need to
sue for nondisclosure. Steps taken by the attorney during closing can make this process easier.
Estate Sales
When a person inherits a property, they probably aren’t thinking clearly. They are mourning the loss of a loved one and often don’t have the time or energy to deal with real estate matters. A real estate attorney becomes of great help during this period, as they oversee the transfer of ownership for the heir.
Pulling Out of a Deal
A buyer might find they need to
pull out of a real estate deal. They might do so as structural damage was found by the inspector and the seller is not willing to pay for remediation work. At times, the buyer cannot obtain financing and needs to back out of the deal.
Regardless of why this step is necessary, the buyer needs legal representation at closing to handle these matters if they must back out of an agreement when the time comes to sign the closing documents. Hiring an attorney early in the process reduces the risk of needing to pay a lawyer for representation in a lawsuit filed by the seller when the deal does not go through.
Real Estate Attorney Fees
As the purchase or sale of real estate comes with multiple fees, a person might worry about the cost of hiring an attorney. Some attorneys charge a flat fee, while others charge by the hour. When speaking with different attorneys, learn which method each uses and how many hours they expect to spend working on the case. Having this information will help prevent unpleasant surprises as the process moves forward.
This fee comes on top of conventional closing fees paid by buyers and sellers. For example, sellers often pay closing costs for title insurance, prorated real estate taxes, and a transfer tax along with their agent’s commission. Buyers pay closing costs for the appraisal and inspection, the notary fee, and the mortgage origination fee, along with many others.
As with all closing costs, the real estate attorney’s fee may change as the process moves forward, depending on any issues that arise. Most closing costs can be negotiated as part of the deal. However, each party pays their attorney, so it falls on them to negotiate the fee of this professional if they will be part of the real estate closing.
Additional Professionals Involved in Real Estate Closings
A buyer or seller might decide they don’t need other real estate professionals at closing if they work with an attorney. However, each individual takes on different tasks. What other professionals are of help when completing a transaction of this type?
Real estate agents handle many tasks related to the sale of a property. They list the property and market it to prospective buyers. It falls on the agent to show the property to interested parties. Overall, their job is to facilitate all aspects of the sale or purchase while ensuring deadlines are met. A real estate broker carries out the same duties. The difference between a broker and an agent is a broker may work independently and have agents working under them.
Mortgage lenders typically require the property to be appraised and inspected to determine if there are potential issues. The appraiser determines the property’s fair market value, so the mortgage lender knows it can recoup its money if the buyer doesn’t make payments as agreed. The inspector examines the property to identify areas needing repair or replacement. The buyer can then negotiate to have these tasks completed or request a lower selling price to account for the cost of the repairs.
An agent of the selected title company underwrites the title insurance. This individual also transfers a clean title to the buyer. As the process moves forward, an escrow manager holds funds to ensure all parties receive the monies they are due when finalizing the transaction. This professional may work independently or be employed by the title company.
Never assume that an attorney present at the closing represents all parties. Every person needs legal representation at closing to represent their interests. Each lawyer looks out for the best interests of their cient. That is their job. Have someone in your corner at this meeting for peace of mind. When the transaction is complete, you will know you have done everything possible to protect yourself and your new asset. Hire a closing attorney today for this peace of mind.
Disclaimer:
Ruelas Andino Law, PLLC makes no claims as to the accuracy of the information contained within the external links in this blog article nor does it endorse any of the businesses contained in the links. Information contained in this blog is for informational purposes only and may not be construed as legal advice.
