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Closing a Real Estate Transaction
There is no requirement that a buyer or seller of real property in a real estate transaction retain an attorney to assist them with the closing of the real estate. However, use of an experienced real estate attorney is advisable, since an attorney will have a complete understanding of the legal issues involved in closing on real estate and will be able to ensure that his or her client has a closing experience that is free of the numerous potential legal problems that could otherwise occur.
Real estate attorneys specialize in the field of purchase and sale of real property, so their knowledge is specific to the needs of buyers and sellers of property. Some crucial questions that a real estate attorney can answer and offer advice on include:
· Information regarding tax consequences, including issues relating to income tax, estate tax, and property tax
· What specific state and local rules and laws apply to the property in question, including issues relating to taxes, zoning, assessments, and the like
· Whether the legal description of the property that is recorded with local authorities is an accurate representation of the actual property involved in the transaction
· What restrictions a buyer of a parcel of real property will face, including state and municipal regulations, as well as liens, encumbrances, easements, or other claims on the specific property
· Whether title to the property is free of defects; if not, what can be done regarding any cloud on title or incomplete information about the chain of title; whether title will be marketable in the event that the buyer of the property subsequently decides to sell or refinance the property
An attorney will be able to review a real estate contract carefully, ensuring that everything included therein, including all terms, conditions, and provisions, are in the best interests of his or her client. The attorney also will be able to explain to the client any aspects of a contract which are beyond the realm of the client´s understanding, and to clarify to the client his or her legal rights and obligations.
A real estate attorney can obtain a title search and evaluate the status of the title. He or she can also advise a client regarding what legal remedies are available to him or her in the event that there are any defects or clouds on title to a property. In addition, the attorney will be able to advise the client about limitations of a title to a property, such as what may limit the marketability of the title in the event that the buyer subsequently decides to sell or refinance the property.
An attorney will prepare and/or review a closing statement and all other closing documents with his or her client. He or she will also advise the client regarding any contingencies, or conditions, that exist that may affect the client´s interests.
A real estate attorney can prepare a bill of sale to cover personal property that is not a fixture but that the seller agrees to transfer in conjunction with the sale of the property. Property covered by a bill of sale may include, for example, window coverings or appliances that are not considered fixtures.
In Florida, the cost of retaining a real estate attorney typically is approximately the same as a non-lawyer title agency. An attorney, however, provides a level of legal expertise that most non-legal title agencies are not in a position to offer. In situations where a real estate attorney acts as the closing agent in a real estate closing and also provides title insurance to the buyer of the property, only a single fee will be due.
Complex circumstances might entail additional fees of between $300 and $600, although this will vary depending on the exact geographical location of the attorney, his or her experience and reputation, and the actual complexity associated with a particular closing. A Florida real estate attorney retained for the limited purpose of reviewing title documents and other documentation that has been prepared by another party will likely charge a more modest fee.
Why use an attorney to close a real estate transaction
Some people choose to hire an attorney to assist with a real estate transaction. An attorney is almost always involved in commercial property purchases and sales, but individual homeowners can benefit from retaining a lawyer as well. In Florida, use of an attorney is common practice.
The Law
Attorneys are familiar with applicable laws in a way that most non-attorneys are not. Every real estate transaction involves legal issues, from the form of the title to the financing of a purchase to certain implied and express guarantees made by the parties to the transaction.
An attorney can help navigate the legal considerations that arise in a real estate transaction, and can ensure that everything is done to accomplish a successful purchase or sale that is in line with federal, state, and local legal requirements.
Legal Terms
Home buyers and sellers will become familiar, through simple participation in the buying/selling process, with the fundamental legal terms involved. However, there will be words and phrases that are unknown or not well-understood, and misinterpretation of such can cause serious problems. An attorney can interpret such terms, as well as explain them to the buyer/seller in a way understandable to the non-attorney.
Special Legal Considerations
Every real property (land) is unique, and transactions involving real property can range from very simple to extremely complex. An attorney can assist buyers/sellers with tricky issues, including:
· Zoning-local rules about what property can and cannot be used for; for example, one may or may not be able to run a business out of a home in a residential neighborhood, or may need a permit to do so.
· Homeowners´ Association-HOAs may have by-laws, which set forth potential limitations on what homeowners in a given neighborhood can and cannot do on and with their property.
· Environmental Restrictions-rules and regulations may exist that limit how a property can be used for environmental reasons; for example, in water-conservation areas, there may be restrictions on the frequency with which one may water one´s lawn.
What Kind of Attorney?
All licensed attorneys should be capable of understanding legal issues and terms and dealing with any legal problems that may arise in a real estate transaction. However, a real estate attorney is specially suited for this type of work. Real estate attorneys deal with real estate regularly, and are thus most familiar with the intricacies of the area of law and, importantly, the sometimes frequent changes that arise regarding what law is applicable.
Cost
The disadvantage of employing an attorney to assist with a real estate transaction is that attorney fees add expense to the process. Fees vary widely, depending on an attorney´s reputation and experience, the geographical area, time and effort expended, and the complexity of the transaction itself.
Nevertheless, the expense is generally not outrageous and usually worth every penny. The buyer/seller is able to rest assured that all legal issues have been handled by a professional, saving him/her time, effort, and the potential risk that an expensive legal problem will arise. As always, contact an attorney on all legal questions. A real estate agent is not qualified to give legal advice and is not approved to give legal advice.
GBrey | 