4 Legalities That Buyers Face With Real Estate Closings
Transferring a property from one person to another isn't as simple as handing them cash and walking away with the key. Many legalities come into play, and it's a good idea to think about the situation as a real estate closing lawyer would. Here are four legal items you'll want to have on your checklist during the closing process.
A big part of closing on a property is setting up an escrow account. This is a third-party account that allows the buyer to safely deposit the payment funds until everything has cleared. The seller doesn't have access to the funds until a neutral third party agrees that all of the terms of the escrow sale have been reached.
One of the biggest reasons to hire a real estate closing attorney is to have someone who can thoroughly conduct a title search. This is a process where they check the county's property registry for any outstanding problems with the property.
For example, there might be an outstanding lien that was never canceled from a previous mortgage. Similar issues can arise from historical problems with the property, such as being built on reclaimed land from a dump. Another possible problem might be an unterminated easement.
The lawyer can encourage the seller to resolve these problems before moving ahead with the sale. Alternatively, the two parties can renegotiate a cheaper version of the deal to account for the risks the buyer accepts by dealing with a less-than-secure title.
A real estate closing lawyer can also check the fees that various parties are asking. For example, a lender might rack up a huge bill insisting there are administrative costs associated with the deal. Working from your state's laws regarding junk fees, an attorney may be able to get some of these removed. Conversely, they might encourage you to consider a different lender.
Documenting Due Diligence
Never assume a seller has properly checked for and disclosed everything about a location. Even if they have a report from a home inspector, hire your own. It's also wise to have professionals inspect the roof and foundation, and checking for pests is a smart idea, too.
Your real estate closing attorney can also examine all of the disclosures from the seller. If something seems amiss, they can bring this to the seller's attention. As with other matters, this might justify negotiating a newer and lower price. Similarly, a lawyer can advise when they think it might be time to walk away.