|
Valuable information for
you, the BUYER.
|
In representing a Buyer in a real estate transaction, there are a series
of functions which require an attorney's professional expertise. Following
is a brief discussion of some important issues encountered by a Buyer in
a residential real estate purchase.
For most real estate transactions, the Buyer will use a real estate
broker. It is importaant to understan
the types of listing agreements, particularly the "Buyer's Broker" form
which could obligate the Buyer to pay all or some portion of the real estate
commission.
When an agreement is reached between Buyer and Seller, an offer to purchase
or "binder" is entered into. A binder deposit, normally one (1%) percent
is tendered from the Buyer to the Seller. The offer to purchase may state
that it is not a contract of sale and among other items, provides the date
by which a formal contract of sale will be entered into by the Buyer and
Seller. The offer to purchase is designed to hold the property from sale
pending the preparation by attorneys of a formal contract. In some areas
in Connecticut, the Buyer proceeds immediately to an offer/contract provided
by a real estate broker. It would be advisable to have this document reveiwed
by an attorney if there is not going to be a formal contract.
The next step is for the Seller's attorney to draft a formal contract
of sale. This contract is sent to the Buyer's attorney. It describes the
property and contains the necessary terms of the sale in order to provide
a valid and enforceable contract.
The Buyer is normally required to pay further deposit monies at the
signing of the contract. A total of 10% of the purchase price is the standard
down payment. The contract of sale will provide for a mortgage and financing
committment date. The contract of sale will be contingent upon the Buyer
obtaining financing by a specific date.
The mortgage commitment letter is the most important document a borrower
receives from the lender prior to closing. It informs the borrower of the
loan application approval and the commitment of the funds for the loan.
There are often conditions outlined in the letter which require fulfillment
prior to or at the closing of sale. The commitment should also set forth
the basic terms of the loan, as well as the fees associated with the lender
and charges to the borrower.
Other noted items in the contract of sale include the date of closing,
the type and effect of inspections to be done, and the responsibility for
the property in the event of preclosing catastrophic damage.
The Buyer is responsible for inspection of the property. Even though
there have been recent developments designed to achieve full disclosure
by the seller, the Buyer is still responsible to uncover any and all problems
regarding the condition of the property. Examples of some common inspections
are: pest, radon, septic, well water, lead and building. The inspections
should also be mentioned on the offer to purchase and the Buyer is given
a limited number of days in which to haave to have the inspections performed.
After the contracts of sale are entered into, the Buyer's attorney conducts
a title search. The title search discloses the previous owners of record
and other interests including encumberences. In the event title problems
are discovered, they are dealt with in order to insure good marketable
title. Title insurance is required by lenders and purchased by the Buyer
at closing. Title insurance provides protection against financial loss
which could result from title defects or claims against the property.
The final stage of the real estate transaction is the cloing. This is
the stage at which the parties sign all documents in connection with the
sale and mortgage and the balance of purchase price is to be paid to the
seller. After the closing, the deeds are recorded formalizing the legal
transfer of title. The Buyer now owns a new home.
You can find additional info at
Cutsumpas,
Collins & Hannafin's Web site
American Bar
Association
CT
Asssociation of Realtors Legal Page
DanburyLaw.com
USLAW.COM,
the easy way to law. We provide easy to understand legal information for
consumers and small businesses. Questions about the law? Go to Ask A Lawyer,
where you can have a private, one-on-one chat with a lawyer. Or, find a
lawyer or law firm. Also try our easy to use legal library.
Your Services as a High Paid Real - Estate Specialist
|