Look Before You Leap: Consult a Real Estate Attorney Before Buying or Selling a Home
Whether you are buying or selling your first home, retirement home or something in between, there is no such creature as the "routine" residential real estate transaction. Each parcel of real estate is unique and each party to a real estate transaction has individual needs and desires. You invest a great deal of time and effort, not to mention hopes and dreams, in selecting the piece of property that is right for you. Every residential real estate transaction, no matter how simple it may seem on the surface, involves a host of complex legal, regulatory and financial issues that must be handled appropriately.
Whether you are the Buyer or Seller, if you are going it alone without an experienced attorney, it can be a daunting task to anticipate all the hurdles and pitfalls that might occur. Decisions made at each stage of the process can affect the end result of the transaction. A Buyer can risk losing his or her deposit and a Seller can risk losing the deal without adequate compensation for the time his or her property has been off the market. In many instances, for less than 1% of the selling price, a Buyer or Seller may engage an experienced real estate attorney not only to protect their interests but to provide invaluable advice and counsel in what can be a very anxious and nerve racking process. Before you sign a Listing Agreement with a Real Estate Broker or agree to an Offer to Purchase Real Estate, you may avoid heartache and heartburn if you engage the services of a knowledgeable and experienced real estate attorney.
In each sale of real estate, there are many agreements and documents that pass between the Buyer and Seller or require the commitment of one party or the other. These documents can include Exclusive Listing Agreements with a real estate broker, Offers to Purchase Real Estate, Purchase and Sale Agreements, Escrow Agreements, and Use and Occupancy Agreements, to name only a few. Even so-called "standard" documents can contain legally binding obligations and rights that may be inconsistent with your needs or favor one party over the other. Additionally, as with any area of the law, there are many customs and practices that can cost the uninitiated Buyer or Seller time and money. While most documents that are required in a real estate transaction are fairly routine, each document can be an opportunity to advance your interests or for the other party to take advantage. It is important to have these documents examined before legally binding yourself to terms you did not anticipate or want.
Buyers and Sellers both frequently run into trouble when they assume that the Offer to Purchase Real Estate is just an informal document that sets the basic terms of the sale and that there will be an opportunity for more negotiating when formalizing the Purchase and Sale Agreement. They believe they can back out of the deal prior to signing the Purchase and Sale Agreement. However, under Massachusetts law, an Offer can be binding on both parties if the Offer contains the basic terms of a description of the premises and the selling price. For a Seller, that can mean that even if you receive a higher offer, you will be bound by your agreement with the Buyer who offered you less. For a Buyer, you can be required to buy the property even if you find your dream house around the corner.
Many Buyers and Sellers also face the vexing problem of title defects. While some defects in the title can be fatal, such as discovering that the Seller does not really own the property, many defects that occur are minor and can be over come by the diligent work of both the Buyer's and Seller's attorneys. When the parties discover there is a title problem, panic usually sets in. What if you learned that despite paying off a mortgage, the mortgage is still showing up on title? An experienced real estate attorney can not only provide comfort in these times of apparent crisis, but they can fix the problems or negotiate a solution which allows the closing to go forward on time as scheduled.
Buying a home is, more often than not, the biggest investment of heart and money in a person's life. Selling a home, too, has many challenges and thousands of dollars can be at stake if the sale does not close in a timely fashion. Buying and selling real estate need not be a nightmare. With a little sound advice up front, the process can be relatively painless. Instead of risking a lost deposit or having your sale fall through or delayed, for a small percentage of the overall cost of the sale (usually a few hundred dollars), you can have the peace of mind of knowing that legalese hidden in a contract will not be giving you an unpleasant surprise you when you least expect it.