Buying and selling real estate is one of the most important and rewarding situations but also one of the most complicated decisions that one can enter, usually with significant financial implications. In any real estate deal, both Buyer and Seller must review multiple complex documents, including legally binding papers, requiring signatures. As you enter any deal of primary concern beyond the actual real estate itself is to ask; who is looking out for you? Who is explaining your responsibilities as you sign legal documents?
I frequently hear from Buyers and Sellers who feel the one factor missing in their transaction is the peace of mind of understanding what are the responsibilities and ramifications of their deal. They feel that no one has adequately advised them.
Real estate sales professionals can provide sales services but to obtain extensive waivers from you to protect them against any claim they have provided legal counsel to you. While they are proficient in their field of sales, they are not equipped to guide in the particularities of contract law. Like any sales profession they are motivated by a commission. The same can be said about any non attorneys in the transaction (lenders, inspectors, escrow and title agents). While they may be well versed in their field, they do not want any responsibility of rendering legal advice: thus, your legal responsibilities are not their concern.
LEGAL REPRESENATION IS NEEDED IF YOU CAN NOT ANSWER:
What am I signing with a real estate sales person?
What terms of your Agreement of Sale are negotiable and what are your obligations?
What is a Seller’s Property Disclosure Statement, and when is it required?
What is the new Good Faith Estimate and who is bound by the terms?
Who holds deposit payment (escrow money) and how much is appropriate?
What is a financing contingency and how does it affect a transaction?
What is a home inspection contingency and how should it be modified?
What is title insurance, a title commitment and title defects?
What if there are environmental issues such as mold or termites?
What happens in a termination of a transaction?
What are liquidated damages?
Who is looking at your legal interests in the review of your deal?
Who is advising me on legal responsibilities?
THE LEGAL INSPECTION
The simple answer to all of the above is that without an attorney focused in real estate, reviewing and advising you in your deal, inspecting the legalities as they relate to you, no one is providing you counsel regarding your legal obligations and risks. You need a thorough review of your legal responsibilities, and the time to have them explained to you, before you sign any legal document.
BEFORE YOU SIGN DOCUMENTS
There may be no more important moment in real estate than at the start of the process, before you put your signature on any document, to have an attorney who focuses on real estate transactions, perform a legal inspection of your documentation; a review of your documents, addressing your questions, and giving you legal guidance through the entire process.
Of most importance is retaining a real estate attorney prior to signing a listing agreement (if you are the seller) or signing and delivering an offer to purchase a home via an Agreement of Sale. The Agreement of Sale, once signed, is a legally binding contract. Absent an express provision, the form of contract used by realtors in Arizona does not allow either party the right to terminate a deal in a residential Agreement of Sale, based on the language of the document alone, after it has been signed. Therefore, it is crucial to have an attorney review all documents, to insure that you understand exactly what you are about to become legally bound to, before you enter a transaction.
SO YOU ALREADY SIGNED WITHOUT PRIOR ATTORNEY REVIEW… NOW WHAT?
While it is preferable that you retain legal counsel prior to signing any documents, it is certainly never too late to get an attorney involved. I offer services to advise on all aspects of your transaction. Even after signing the Agreement of Sale, there are still many circumstances where legal advice will ease the process. Those steps include review of lender approval letters, inspection reports, mortgage documents, title commitments, and reviewing settlement documents.
ATTORNEY at SETTLEMENT
Even if you have not had representation at the start, or even during the time leading to settlement you may be seeking legal representation at the end of your deal at the closing table. Settlement is also a critical step in the real estate process and lawyers are often retained to give the final documents, including most importantly the Uniform Settlement Sheet (HUD-1), the title commitment and the Deed, a legal review, to insure that as your transaction closes and your interests are protected.
CONTACT AN ATTORNEY FOR A PERSONALIZED REVIEW
Attempting to review and prepare your own documents or hope that a real estate salesperson can advise you properly can put your deal in a precarious situation. Signing without an adequate legal inspection can risk your money or cause major delays in the deal, leading to stress and anxiety, or, even worse, post-closing issues that could have been avoided. Find legal counsel that works with its clients one- on-one but is also flexible enough to work with clients in their real estate transactions via telephone and e-mail without the need for in-person meetings. In either situation make sure you will be working with lawyers and paralegals with extensive real estate experience.