If you carefully scrutinize real estate transaction documents like the title deed and the seller’s affidavit or tax declaration, one thing that should not escape your eyes is the involvement of a Real Estate Law Firm. Their name appears in the documents besides the names of the buyer, seller, and witnesses. It points to the need to involve a real estate lawyer or law firm in real estate transactions to facilitate smooth transactions that involve various legal processes. Buying a home is perhaps the most expensive and most significant investment of your lifetime. So you would like to ensure a smooth and safe transaction by engaging a real estate agent and a real estate attorney to navigate through the process of negotiation and close the deal on time without any hiccups.
Real estate transactions are complex involving several persons and agencies like lenders, inspectors, appraisers, real estate agents, underwriters, other lawyers, the municipality, sellers buyers, etc. There are hundreds of legal documents generated at various stages of the transaction. Having a real estate attorney is essential for handling the legal aspects on your behalf. Whether you are buying or selling a property, they will ensure that there is nothing bad in the documents or any error in facts and figures that can harm your interest. Moreover, the lawyer can prevent frauds that are not unusual in real estate transactions.
The real estate laws
Real estate laws, also known as property laws, govern buying, selling, and using land or property created on the land. It encompasses a wide range of activities from the manner of acquiring the property and how utilizing the property by the owner. Real estate refers typically to land and any structure like buildings and sheds and other objects constructed on the land/building, which includes all fixtures erected on the property. Real estate laws cover various aspects like deeds, titles, mortgages or purchase financing, taxes, zoning, and estate planning. Real estate laws are state laws, and you must hire a real estate attorney who is conversant with the laws of the state where the property is located. Although some laws might differ between the states, the broad coverage of governing the aspects of creating, executing, and recording a deed remain the same.
In the United States, there are some federal laws like the Interstate Land Sales Full Disclosure Act that applies to real estate throughout the nation. Only an attorney can identify the laws that are relevant to the property under the transaction.
Why should you hire a lawyer?
Having a lawyer by your side is not always discretionary because some states require a real estate lawyer’s presence during the closing. The success of any real estate transaction depends on the satisfactory closing of the deal within a reasonable timeframe without encountering any hindrance. Only a real state attorney who specializes in real estate laws can ensure it. Your attorney will review all paperwork in advance before closing on your behalf. They will advise you of any omissions or flaws in the documentation and present it during the closing. They will oversee the proceedings and ensure your interests remain protected.
Lawyers do extensive work behind the scenes and might not interact with you very frequently. The chances are that once you engage the lawyer and authorize him or her to represent your case, the lawyer will start interacting with all stakeholders and agencies involved in the transaction to take forward the process and keep you informed about the developments. You might need to sign some documents periodically that the lawyer will get done through his or her office.
Keep reading to know how the lawyer will perform the duties to ensure smooth and safe property transactions.
Drafting/ Reviewing the Sales and Purchase agreement
Sales and Purchase agreements are the primary documents in real estate transactions that bind upon the two parties undertaking the transaction. The Sales and Purchase Agreement or Contract is a framework for the negotiation process. The document finalizes the conditions of the sale after going through negotiations and creates a roadmap for its completion.
The real estate attorney will help create the Sales and Purchase Agreement by either drafting and or reviewing it from the client’s perspective to ensure that it complies with the legal requirements and has all bases covered for protecting the client’s interest. The lawyer might even prepare documents like title insurance policies and handle the transfer of funds for the purchase. The lawyer is also involved in resolving disputes to steer the process smoothly.
Review of documents and receive instructions
Usually, the lawyer’s involvement starts from the stage after signing the offer to purchase and fulfill conditions like home inspection, financing, etc. The realtor assists in completing these matters and then hands over the transaction to the lawyer who takes it up for completion by going through the subsequent stages that involve various legalities. A lot of documents get generated as the transaction progresses. The lawyer reviews every paper to ensure that it is error-free and does not contain anything that can be detrimental to his client’s interest and clear it for signing.
In case a realtor is not involved in the transaction, you must include the lawyer right from the beginning of the process. The lawyer can review the documents for completion and correctness so that the conditions mentioned protect the client’s interest, and there are no possibilities of any legal issues cropping up subsequently. It will ensure that the buyer gets enough time to arrange for finances, and there is an exit clause in the contract too so that if the deal falls through, the buyer can get back the money invested till that time.
The involvement of a lawyer in real estate transactions is essential for conducting searches related to the sale. It starts by searching the title to eliminate any chances of a dispute at a later stage about the current owner of the property. The search helps to understand the nature of ownership of the property and if it is free from all encumbrances. This will eliminate the need for unforeseen registrations. The lawyer can also search for reviewing the tax information, water softener, and water heater rental and adjust accordingly. It will ensure that due adjustments in accounts are done by both parties so that there is a need for both parties to come back after closing to settle missed payments.
Prepare and register documents after signing
The real estate attorney who carries the brief of the purchaser will receive instructions from the lender to prepare, sign, and register the mortgage documents. The lawyer representing the seller will be present at the closing time and ensure proper signing and registration of the transfer documents. The lawyer will ensure flawless document preparation to enable the buyer to receive the title of the purchased property. When acting for the purchaser, the lawyer will ensure the fulfillment of the mortgage conditions and arrange for proper registration. It is the lawyer’s responsibility to collect the mortgage funds and hand it over to the seller’s lawyer. Your lawyer can work with the lawyer of the other party and the mortgage property to thrash out any issue that may arise to ensure timely completion of transactions and closure of the deal.
Ensure a smooth transaction
The lawyer’s primary duty is to ensure a smooth transaction of the property so that both the seller and buyer are happy. The lawyer is ready to deal with issues and resolve them to the satisfaction of all parties to ensure it goes on smoothly and on time. The lawyer is responsible for comforting the client by providing a safe transaction that relieves buyers who are undertaking the most important and largest transaction of their lifetime unless the client is a real estate investor. The lawyer will be present on the day of closing, too, and oversee the proceedings that give confidence to the client of satisfactory completion.
The attorney conducts the final settlement or closing by supervising the transfer of funds, as mentioned in the Sales and Purchase Contract, and executing the deed that transfers the title from the seller to the owner. The attorney plays host to all parties at the office at a convenient time that suits all to complete the closing formalities. The attorney’s office staff explains the documents to the parties, gets their signatures affixed on the documents after ensuring that all financial transaction details are completed according to the terms of the contract.
After going through the closing, the attorney will prepare a final settlement statement and verify that the proper documents have been executed, registered, and recorded. The final settlement statement is a comprehensive document that mentions all the documents of the transaction, like inspections, surveys, deed, mortgage, and a financial summary of all monetary exchanges that have happened.
The complexity of real estate transactions makes it evident that a real estate attorney is the go-to person for both buyers and sellers.