Real Estate Law

When you’ve decided that you would like to own a home the first step is to determine how much home you can afford. Meet with a mortgage professional to review your income, assets, credit, etc. to find out. There are many mortgage companies out there, and your choice of lender may determine whether your transaction is a dream or a nightmare, so choose wisely. Whether a person, bank, or internet provider, the choice depends upon many factors, and should be made with care. 

When interviewing mortgage lenders, keep in mind that each time a lender checks your credit score, the score may drop slightly. Therefore, first choose your lender, based on their estimated interest rates, fees and upon your interview of the representatives. After you have chosen the lender, then have that lender run your credit score so that he can quote you the actual rates based on your credit.

Once you have found a home and make an initial offer, your realtor will forward the contract to my office. I will work diligently with your agent to insure a smooth transaction. Unlike some attorneys, I welcome your agent’s involvement and will keep the agent advised during all of the steps in your transaction. 

The attorney review process can be confusing. The realtor will tell you that it is three days, but it is actually longer. The three-day period is only the time during which the first Review letter must be sent. The Contract is not binding on either party until the Review is concluded. This means that it is important that the Review be conducted, and concluded, as quickly as possible.

The closing date in the contract is generally what we call an “on or about” date, it may be moved so before you schedule movers, or other plans that cannot be changed, make sure you consult with our office to get a firm date.

The most common inspections are the structural inspection, wood destroying insect inspection, pool and septic inspections (if applicable), underground oil tank sweep and radon test. Based on the results of the initial inspections you may also wish to have further testing performed, such as asbestos tests, mold tests, chimney test, lead paint tests. If the home has well water, it is the seller’s responsibility to have a well water quality test performed. It is also the seller’s responsibility to have any municipal inspections (smoke detector certificate, certificate of occupancy) performed and to obtain the certificates.

Your inspector will send the reports to you and should also copy your attorney. You will review the reports with your attorney to discuss the issues, if any, that you may ask the sellers to remedy prior to closing. Your attorney will send copies of the reports to the seller’s attorney along with a list of your repair demands.
The sellers will respond to your demands and the response could be that they will address all issues, or that they will address none of the issues, or something in between. The parties will negotiate, hopefully, to a mutually acceptable agreement. If defects are found, and if the seller refuses to address the defects, the buyer may have the right to cancel the Contract and would be entitled to the return of any down payment.

In some cases, the parties may agree upon monetary credits in lieu of actual repairs. This could be advantageous to both parties.

One common misconception in real estate transactions is the meaning of “As-Is”. In most cases, even if a transaction is “As-Is” the buyer is still entitled to the usual home inspections. If a serious defect is found, the seller is not legally obligated to make the repair, but the buyer will still have the right to cancel the Contract.

Your lender will complete a mortgage application with you and will ask for documentation regarding your finances. Be prepared to provide bank statements, pay slips, W2’s, tax returns, etc. Be prepared to explain any unusual deposits to your accounts. Keep copies of everything you provide and be prepared to resubmit those items. Stay on top of your loan officer and on the loan processor to make sure that the process keeps moving forward.

Part of the mortgage underwriting will be an appraisal to confirm the value of the home. The appraisal is arranged by the mortgage lender, but will be at your cost. The appraiser should contact your realtor for access to the home. If the house appraises less than the purchase price, you may be able to cancel the contract.

Once you have applied for your financing, do not make any changes to your financial status without speaking with your loan officer first. Do not change jobs, do not make any major purchases, do not take out any new credit, and do not allow any bills to go 30 days beyond their due dates. Your lender will do credit and employment verifications shortly before closing.

When choosing a mortgage professional there is more to consider than rates alone. Choose a mortgage lender that will give your transaction the attention it deserves; someone that you can reach when you need them and that will be with you through the entire transaction.

Also prior to closing you will have to go to your bank to arrange for the funds for the closing. The settlement agent cannot accept a personal check, so you will have to arrange either a wire transfer or a teller check. Your attorney will give you the amount needed as well as the wire or check instructions as far in advance of closing as possible. This usually works out to be the day before closing, depending upon when the mortgage lender provides the settlement figures.

Be sure to have home insurance (hazard insurance) arranged and effective as of the day of closing. All buyers and their spouses must attend unless told otherwise and photo identification is required. If there is a reason why you or your spouse cannot attend, then a power of attorney can be prepared, but it will have to be approved by your lender so you cannot wait until the last minute otherwise the closing may have to be postponed.

Remember that if a mortgage deal seems too good to be true, it probably is. I have seen many cases where lenders that quoted the lowest rates upfront will try to add in extras fees and costs at closing.

The second part of the closing is the closing of title, during which the seller’s attorney will provide a Deed which transfers ownership of the home to the buyers, along with other necessary documents. The buyers will get keys to the home and the sellers will receive the funds due to them.

If everyone has done their job properly the closing itself should be the easiest part of the entire transaction. We will have all necessary documents, including the settlement statement, prepared and reviewed in advance of closing. We will also have the Deed and other seller documents reviewed and approved by the title company in advance of closing. Once the closing is concluded, the home is yours.