buying a home, what you need to know from your lawyer

• Buying a Home. In the typical home purchase, the seller enters into a contract with a real estate agent, usually in writing.
• Avoid Vague or Unclear Terms. A lawyer can help you avoid some common problems with a home purchase or sale. ...
• Consider a Consultation. Even if a lawyer is not needed during the course of negotiations, both the buyer and seller may want to consult with a lawyer to answer important ...
• Purchase Agreements. The purchase agreement is the single most important document in the transaction. ...
Title Search. After the purchase agreement is signed, it is necessary to establish the state of the seller's title to the property to satisfy the buyer and the financial institution.
The Closing. The closing is the most important event in the purchase and sale transaction. The deed and other closing papers must be prepared.
Importance of Having a Lawyer During Closing. The closing process can be confusing and complex to the buyer and seller. ...
Buying or Selling a House? An Attorney Can Help. A broker generally serves the seller, and the lender is obtained by the buyer. ...

Full Answer

Do I need a lawyer when buying a home?

While lawyers can help if you face discrimination when buying a home, there are also less expensive options. Most individuals can negotiate face-to-face with another party. However, the terms of the deal must be properly recorded in a contract for them to be legally binding.

How do I choose a real estate lawyer?

In summary, choosing your Real Estate lawyer with care and asking the right questions up-front can prepare you for a smoother home closing, reducing surprises, and get you into your home faster. Important note: This article is not Legal Advice.

Is it important to know the legal requirements when buying a house?

From before you find your desired house to the day you’re handed the keys, it’s important to know the legal requirements involved with real estate, as well as your rights when buying a house. Follow these 11 steps to simplify the home buying process.

What can a buyer’s lawyer do for You?

A lawyer might negotiate a price reduction on the property—a deal sweetener to compensate you, the buyer, for the delay. The lawyer may also provide the seller with suggestions or sources for financing so that they can satisfy those claims.

What to do if your mortgage offer is accepted?

Once your offer is accepted, you’ll need to contact your mortgage lender with the details so that the mortgage approval process can begin. The lender will likely ask you for more documentation and information than you provided for preapproval.

What is the first part of a home sale?

The first part of every home sale is the purchase agreement . This is the purchase contract that both parties sign once an offer has been accepted. Along with the purchase price, a purchase agreement also defines the following: Earnest money – How much cash buyers commit to completing the sale.

What is a mortgage closing?

Mortgage Closing. Once all the contingencies have been met and you’ve provided your mortgage lender with the appropriate documentation, your closing (also known as a settlement) will take place. During this meeting, you’ll close on the home and the mortgage.

What does a mortgage lender put in escrow?

Your mortgage lender will set a portion of your mortgage payment aside to pay for property taxes and homeowners insurance. This goes into the escrow account. Follow these 11 legal considerations step-by-step and you'll be on your way to completing your real estate transaction and becoming a responsible homeowner.

What happens after a home inspection?

Once the home inspection is over and the contract is final, you’ll need to meet other contingencies listed in the contract. The biggest one often is the sale of your current home. If you’re already a homeowner, you’ll probably want to sell your current home to be able to afford the second one, so the contract will state that the purchase is contingent on that sale.

What happens after you submit an offer?

After you’ve submitted an offer, the seller may counter it, reject it or accept it. If the seller counters and changes any of the conditions of the contract, your agent or attorney should review the revisions.

What is a purchase offer?

Though, in some hot markets, you might have to offer more. The purchase offer is really a contract waiting for the seller’s signature, so it is a complex document. You may want to have a lawyer who specializes in real estate law to review the purchase offer and give legal advice.

What happens if you don't hire an attorney?

After all, if you don't use an attorney and the transaction later goes awry, you'll still have to hire one, at much greater time and cost. Save yourself the headache by working with a lawyer to structure the deal, not salvage it.

Can an attorney text you?

Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

Can you let the seller keep possession of your home?

You're willing to let the seller retain possession of the home for a time beyond the closing, but you want to make sure the seller will pay you a fair rent. Legal claims have been made against your prospective house that must be satisfied by the time the property is sold.

What can a lawyer do for a seller?

The seller should have the advice and guidance of a lawyer when buying a house with respect to a brokerage agreement. ...

What happens if you are the only person in the US without a lawyer?

If you are the only person there without a lawyer, your rights may be at risk.

What is a purchase agreement?

The purchase agreement is the single most important document in the transaction. Although standard printed forms are useful, 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: 1 If the property has been altered or there has been an addition to the property, was it done lawfully? 2 If the buyer has plans to change the property, may what is planned for the property be done lawfully? 3 What happens if a buyer has an engineer or architect inspect the property and termites, asbestos, radon, or lead-based paint is found? 4 What if the property is found to contain hazardous waste? 5 What are the legal consequences if the closing does not take place, and what happens to the down payment? This question raises related questions: Will the 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?

What is the contract between a seller and a real estate agent?

In the typical home purchase, the seller enters into a brokerage contract with a real estate agent, usually in writing. When the broker finds a potential buyer, negotiations are conducted through the broker, who most often acts as an intermediary. Once an informal agreement is reached, buyer and seller enter into a formal written contract for ...

Who serves the seller in a real estate transaction?

Throughout the process, the buyer's and seller's interests can be at odds with each other, and even with those of professionals involved in the sale. The broker generally serves the seller, and the lender is obtained by the buyer. Both want to see the deal go through, since that is how they will get paid.

Can a seller be liable for a brokerage commission?

But in the absence of an agreement to the contrary, the seller may become liable to pay a brokerage commission even if a sale does not occur, or to pay more than one brokerage commission. If the agreement allows the seller the right to negotiate on his or her own behalf, for example, you may avoid this problem.

Real estate agent contract

Your agreement with a buyer’s agent may be one of the first legal documents you’ll encounter when buying a home. This is a contract you might sign — though note that they’re more common in some states than others — when you’ve found a great agent whom you trust to help you find the perfect home.

Loan Estimate

A Loan Estimate is a document provided by your lender that includes the terms of your mortgage loan and an estimate of your closing costs.

Earnest money check

Earnest money acts like a good faith deposit. When preparing a purchase agreement, your agent will advise you if it would be advantageous to include earnest money to show the seller that you’re serious about your offer; it can depend heavily on your market.

Deed transfer

When you buy a home, you’ll take over the title to that home. The property title represents your right to legal ownership of the property.

Title review

During the closing process, a title review will be performed to ensure that there are no hidden problems that may interfere with your ability to hold the title.

Property survey

A survey is a document that shows the property lines so that everyone — from you, to the city, to your future buyer if you decide to sell — understands exactly what you do and do not own.

Certificate (or affidavit) of title

This is one of the many documents you’ll encounter during closing, wherein the seller signs off on a statement swearing to their legal right to sell the property.

Why do you need a lawyer for a mortgage?

Furthermore, attorneys can secure proof that judgments or liens have been resolved. That is important if you ever plan to obtain a mortgage or loan against the property.

Why should I be represented by a lawyer?

Ideally, buyers and sellers in a real estate deal should be represented by lawyers to safeguard their rights and watch their interests. While lawyers can help if you face discrimination when buying a home, there are also less expensive options.

Why do attorneys do title searches?

The title search is essential because it reveals whether the seller has the legal right to sell the property.

Why is legal counsel important?

Having legal counsel makes good business sense because of the complexities that come with real estate transactions. Experienced real estate attorneys can help to protect your interests. They ensure that your transaction adheres to the applicable rules of your state and municipality.

How long do you have to review a real estate contract?

In many states, the buyer and the seller have three days to review a real estate contract before it becomes legally binding. Some buyers and sellers aren't aware of this. A lawyer will make the client aware of it, review the contract for legal glitches, make necessary changes, and insert useful contingencies .

What is a contract attorney?

An attorney understands these different types of business arrangements and their legal boundaries within your state's law. The attorney will ensure that the contract is consistent with the law and the partnership's, trust's, or corporation's charter agreements.

Where do I file a deed for real estate?

Real estate deeds often need to be filed at the county and state levels. An attorney will be able to do this quickly and efficiently. In some cases, the transaction might involve property in an area where certain types of construction are not allowed.

Do I need a lawyer to buy a house?

Not only is a home a large financial purpose, but the clauses in your purchase agreement and mortgage agreement also can greatly impact your future. This is why, in almost half of states, an attorney has to at least be present at closing — if not actively overseeing the deal.

What will a lawyer do in the transaction?

How a lawyer can help, and what they’ll do in the purchase transaction, depends on your state. In states that require their help, the lawyer typically reviews the purchase agreement, handles the title review, and oversees the closing.

When else might you want to hire a lawyer?

There are some circumstances when you might want to hire a lawyer even if it’s not required. Not all home purchases follow the traditional path of buy and sell.

Where can I find a lawyer for buying a house?

Agents and lenders handle hundreds of real estate transactions annually. Over time, they’ll learn which attorneys are thorough and professional. They likely have a list of names and numbers they can give you, so don’t be afraid to ask for recommendations!

What to ask a lawyer before hiring a real estate lawyer?

Before hiring a real estate lawyer, it can be crucial to find out how much experience they have in the industry handling residential real estate transactions . A good question to ask is how many transactions they have closed in the course of their practice.

Is it important to understand the closing process?

Buying or selling a home is a major transaction. It is important to understand the closing process, especially when your lawyer’s office will be in contact, what information or documents they might need from you, and when you should expect to get updates on the progress of your transaction.

Do I need a lawyer to buy a house?

Short answer: Yes. This is the biggest transaction of your life ( geez… no pressure ), and you want to have someone in your corner who knows all the ins and outs of purchasing a property in your city.

Does it have to be specifically a real estate lawyer?

Many law firms will have someone specifically in the office that handles this type of law. Typically these contracts are pretty standard stuff, but you will want them to have experience in property law to have all your bases covered. We will get to what to ask a little later.

What are the legal fees when buying a house?

The legal fees will vary from location to location. In general terms, you will want to bookmark 1.5 % in legal fees (so $3000 on a $200,000 home) for legal fees when you start looking for your home. The best thing to do is to ask your lawyer as part of your process in finding a lawyer when buying your home.

What does a lawyer do when you buy a house?

The lawyer will get all the paperwork ready and make the transfer of the home from the buyer ( that’s you!) to the seller a lot easier. They get everything ready for you and do any background checks and other things related to the transfer of property.

How to Find a Lawyer in 3 Easy Steps

For most first-time homebuyers, this might also be one of your first dealings with a lawyer. Given that this is likely one of the largest purchases you will make, you want to make sure you’re represented properly. We’ve outlined a few helpful suggestions below that we hope will help guide you through the process.

Why do you need an attorney for a home purchase?

Here are a few reasons you might need or want an attorney to be part of your home buying team: State or lender requirement: Every state has slightly different laws regarding real estate transactions, and some states consider certain actions that are part of the process to be “practicing law.”. These regulations are often meant to prevent real ...

What is a real estate attorney?

A real estate attorney is someone who is licensed to practice real estate law, meaning they have the knowledge and experience to advise parties involved in a real estate transaction, such as a home sale.

Who is in charge of closing a home?

In some cases, a real estate attorney is also the person who’ll be in charge of your closing. In a home purchase transaction, both the buyer and seller can hire an attorney to represent their interests during the process. Or, in the case where an attorney is overseeing a closing where the home is being purchased with a mortgage loan, ...

Is it legal to buy a home?

Buying a home isn’t just a simple purchase; it’s also a legal transfer of a property from one entity to another. Because the legal side of this transaction can be so complex, sometimes it makes sense (or is even required) for home buyers or sellers to enlist an attorney who can look out for their best interests.

Do you have to have an attorney at closing?

If your mortgage lender requires an attorney to be present at closing, whether the buyer or seller covers the cost of the closing attorney will depend on how your contract was negotiated. If you want your own attorney in addition to the one required by your lender, you’ll also pay for any services they provide you.