Corralling the Moving Pieces of the Transaction
It’s an understatement to say that a real estate transaction has many spinning plates.
A real estate attorney reviews contracts to look for issues not specifically stated in the negotiation, as well as details related to items, such as insurance, mortgage, or inspections. It takes a high level of experience and expertise to corral all the moving pieces.
How is it done? Read on.
How a Real Estate Attorney Helps
Real estate attorneys tighten up the contract by looking for unexpected issues that could arise for the buyer.
For example, if the previous owner had several claims on their home insurance policy, this could make it difficult for the new owner to acquire insurance or even make the property uninsurable. If a term of your mortgage requires insurance, this could ruin your chances of owning the home.
Attorneys understand common unseen or unspoken issues that can leave the home buyer in an undesirable position. Thorough research into common hidden risks help protect a buyer from titles to liens and everything in between.
However, sellers also need an attorney to look out for their best interests and to advise them on unfair or illegal requests a buyer might try to make.
Inspections and Failure to Disclose
Property inspections are a major aspect of a real estate contract.
Inspection issues can always pop up, and they are key to the negotiation process for both the seller and buyer. Unless the buyer is well-enough experienced in construction matters to understand repair issues such as foundation and roof problems, as well as plumbing and electrical and have the ability to determine the age of the HVAC and water heater, they should never skip the inspection step.
Sometimes brokers will recommend this so as to make a better offer. I have watched buyers take on substantial costs when the disclosure statement is “fuzzy” about an issue and the inspection has been waived. The seller might be convinced to offer an unreasonable reduction on their home to cover costs of issues revealed during the inspection. However, the buyer won’t want to overpay for a home in dire need of major repairs, such as a new roof or structural issues. These issues might not affect the home now but could lead to costly issues in the future.
In some cases, a problem might be detected after the fact due to a seller’s failure to disclose known issues that are not detected during the inspection process. If there had been a problem--such as a cracked foundation --that was repaired in the past, so not added to the disclosures, it does not excuse the seller from updating their Disclosure if an issue arises after the contract but before the closing.
Buyers have a right to do a final walk-through before closing.
Real estate attorneys ensure buyers understand their rights and that sellers follow the proper procedures. Let’s say a seller turns off their utilities too soon, then the new owners can’t check the furnace, lighting, garage door openers, hot water, or appliances to make sure they are in the same condition as the time they made their offer.
Most homeowners don’t realize they can’t turn off their utilities too soon, which can lead to problems for them once they move out. Any problems found at the final walk-through must be reported to the real estate attorney so they can reach out to the seller’s attorney for resolution.
There are many final details that are often overlooked without the help of an attorney.
It is always a good idea for new owners to change the locks on their new property. The sellers could have given their keys to a neighbor, friends, or other family members who can then access the home without realizing that they have no right of access anymore.
Another detail is making sure buyers know what funds they need for closing and how to provide the funds whether it is by cashier’s check or wire. Overlooking this can delay a deal.
You won’t get far--or better put--you might go too far if you attempt to finalize your transaction without the help of a real estate attorney.
And that would be a shame considering the magnitude of a home purchase or sale.
The Minchella & Associates Difference
With over 40 years of experience in Illinois real estate law, Erica Minchella is an expert at guiding clients through the maze of tax matters in real estate transactions. Schedule a consultation today.