Real Reasons Why You Should Hire a Lawyer When Buying or Selling a Home
If you’re buying or selling real estate, you might have heard numerous times the question, “Do we really need to hire a real estate attorney at all? Almost all real estate transactions involved a realtor in the process, and you may not need a lawyer involved in a home sale or purchase.
Nevertheless, selling or buying your home is one of the most important financial events in your life. With every transaction made, there should be a creation of a real estate contract between the buyer and seller. It consists of the purchase and sale terms between the parties.
Having an attorney may be a great help. There are instances that you can’t understand the terms of your real estate contract or your circumstance needs complicated wording changes or insertions to the standard contract. Or instances where a realtor will not be involved, so it’s just important that you hire a lawyer to help you prepare the real estate contract. In this article, we are going to give you reasons why it might be right for you to hire a lawyer when you buy or sell a house.
Duties and Responsibilities of a Real Estate Attorney
To determine if you would need a lawyer, you need to have a full grasp of the job of a real estate attorney. A real estate lawyer’s job is to negotiate and make a transaction come together in a peaceful manner that’s just and compliant to all parties.
Normally in a home purchase, the seller goes into a brokerage contract with a real estate agent, particularly in writing. The broker will look for a potential buyer and negotiations are managed through the broker, who normally acts as the middleman. After an informal agreement is settled, the buyer and seller will come into a formal written contract for the sale, the purchase agreement. The buyer secures a commitment for financing. The title gets explored to convince the lender and the buyer. Lastly, the property gets transferred from the seller to the buyer, and the seller receives the purchase price bargained for in the contract.
Discussing the process may sound easy but without a lawyer, the outcomes may be more catastrophic than purchasing a car that turns out to have a substantial defect or a stock investment that was injudicious.
An attorney can definitely help you to prevent common problems with a home purchase or sale. For instance, a seller may sign a brokerage agreement that doesn’t deal with a number of legal problems. This is not even new because most often, realtors use standard forms, hoping that they will cover all circumstances or will be easily customizable for unusual circumstances.
If there is an absence of an agreement to the contrary, the seller will become responsible for paying a brokerage commission even if a sale doesn’t happen, or to recompense more than one brokerage commission.
You can avoid this problem if the agreement permits the seller the right to negotiate on his or her own behalf. Your lawyer can give you an understanding of the effect of multiple listings. You can count on your lawyer in negotiating your rights if the seller withdraws the property from the market, or can’t provide great marketable title.
Consultation of Tax Consequences
There can be instances that you won’t need a lawyer during the course of negotiations, but you may have to consult with a lawyer to provide you answers on important questions, including tax consequences of the transaction.
If you’re the seller, the tax consequences have a critical significance. Let’s say that the income tax consequences of a sale, especially if the seller produces a large profit, may be considerable. Your attorney can suggest whether the seller can take benefit of tax provisions permitting for barring of capital gains in certain circumstances.
Addressed Needs in the Purchase Agreement
This agreement is solely the most important document in the transaction. Even if standard printed forms are useful, your lawyer can greatly help you in discussing the form and to alter changes and insert other needs to mirror the buyer’s and the seller’s desires.
Plenty of buyers finance a considerable portion of the purchase price for a home with a mortgage loan from a lending institution. The agreement should include a precisely worded provision that would be subject to the buyer’s obtaining a commitment for financing.
Review the Status of Title
When you’ve finished signing the purchase agreement, you need to establish the state of the seller’s title to the property to the buyer’s- and the finance institution’s- contentment. It is a common thing to order a title search from an abstract or title insurance company. Title insurance is not normal to some states and in outer areas of others. But in certain cases, a lawyer is necessary to review the status of title and render an opinion of title in lieu of a title policy.
Prepare Closing Statement
This is the most crucial event in the purchase and sale transaction. It should be prepared as it will be passed from seller to buyer, who pays the balance of the purchase price. The statement should be arranged prior to the closing specifying the debits and credits to the buyer and seller.
Your attorney will be responsible for explaining the nature, amount, and fairness of closing costs. During the last minute disputes regarding delivering possession and personal property or the adjustment of various costs, including fuel and taxes. Your legal rights may be at risk if you are the only person there without a lawyer.
Author bio: Ivandrea Ollero is a daytime writer for Barwick Boitano Lawyers Parramatta, a law firm that provides legal services and achieving fantastic results for local clients in Sydney and Western Sydney. Ivandrea is a content writer who researches and write custom content about home improvements, finance, law, travel, fashion, and beauty. She graduated from St. Scholastica’s College, Manila, with a Bachelor’s Degree in Broadcast Journalism in 2016. She provides helpful tips and hacks on various topics for her readers.