The Real Estate Attorney’s role in your home buying process.

1. The Home Search
Although many Buyers do not engage an attorney prior to submitting an Offer to Purchase, it is never too early to get your team in place and to have a discussion with your real estate attorney about your plans. That way, when you submit and have an Offer accepted, your attorney is engaged and ready to go. This will also allow your realtor, loan officer and attorney to exchange contact information and address any anticipated issues in advance of Offer submission. Everything with real estate is very time sensitive and deadline driven so it doesn’t hurt to be ahead of the curve.

2. Offer to Purchase
Once you have an Offer accepted, you will want to officially retain your attorney. Many Buyers make the mistake of hiring someone who doesn’t specialize in real estate law and this tends to slow down the process and create complications. Be sure when you hire an attorney it is someone who concentrates in real estate law as you want someone representing you who is familiar with standard real estate practices and who can best protect your interests in the transaction. Additionally, Buyers often assume they can avoid the cost of hiring an attorney by relying on their realtor for advice throughout the process. Not only are realtors not qualified to provide legal advice, they are not legally permitted to do so. The realtor is an interested party to the transaction and they only get paid if the sale occurs, even if the sale terms may not be in your best interest. You are about to make one of the biggest, if not the biggest purchase of your life, be smart about who you hire to represent you. Be sure to hire an expert whose sole purpose is to protect your interests.

3. Inspections
Most likely your Offer to Purchase contained a contingency allowing you the right to have the property inspected by a professional home inspector of your choosing. While there are certainly exceptions, I always recommend that Buyers conduct a home inspection. If the home inspection discloses problems that are too significant or too expensive to fix, you can choose to walk away from the purchase and obtain the return of your earnest money deposit. If nothing else, the home inspection gives you an opportunity to educate yourself about the home and its systems alongside a professional inspector who is a disinterested party to the transaction. Once completed, your attorney will work with you and your realtor to ensure that the appropriate legal language regarding any repairs to be completed by the Seller is incorporated into the final contract. Often times, in lieu of repairs, the Buyer and Seller agree to a reduced price and/or a closing cost credit. Your attorney will make sure the final contract is drafted to accurately reflect any credits and/or price changes resulting from the inspection.

4. Purchase and Sale Agreement
Typically within a week or two of the accepted Offer and after the completion of the home inspection, the attorney for the seller and your real estate attorney will begin negotiation of the final contract. This contract is called the Purchase and Sale Agreement. This is the legally binding contract which incorporates all relevant terms of the transaction including but not limited to the final price, closing date and all terms related to delivery of clear title by the Seller to the Buyer at closing. Simultaneously with execution of the Purchase and Sale Agreement the Buyers will pay their deposit which will be held in escrow and then applied to the purchase price at closing. Once the Purchase and Sale Agreement is signed, absent legal cause or absent Buyer’s ability to obtain financing, the Buyer cannot change their mind and walk away from the deal without forfeiting their deposit. The Purchase and Sale Agreement will be the governing document in the transaction so it is imperative that you have a real estate attorney advising you and making sure the agreement is fair, reasonable and protects your interests.

5. Mortgage Process / Appraisal
After the signing of the Purchase and Sale Agreement, your focus will shift to the mortgage process. You will work with your bank and/or loan officer to submit all your financial information and the lender will arrange for an appraisal of the house. During this time, your real estate attorney will be conducting the title examination and supplying all title work to your lender. Your lawyer will act as the liaison between you and the bank to ensure that the lender has everything it needs to issue a final approval of the mortgage.

6. Title Insurance
One of the roles of your real estate closing attorney is to coordinate the issuance of a title insurance policy to your lender and to you as the new homeowner. The lender’s title insurance is required and protects the lender up to the amount of the loan. The owner’s title insurance is optional, however, always highly recommended, and protects you up to the full value of the property. Even with the most accurate title examination, there can be hidden title defects that could go undiscovered and derail a later refinance and/or sale.

7. Closing Process
At closing your attorney will be responsible for the preparation and delivery of the closing documents, including the HUD-1 Settlement Statement, promissory note, mortgage and truth in lending disclosure statement. The closing attorney will also review and approve the Seller’s Deed, collect the smoke/CO2 certificate, collect final municipal bills and review any other Seller documents required for delivery of clear title. Your closing attorney will ensure that all seller mortgages are paid off and discharged, all real estate taxes are adjusted accurately between you and the Seller, the realtor commissions are paid and all sales proceeds are distributed appropriately. All documents will be explained by your attorney and presented to you for review and execution. Your closing attorney will ensure that the closing is properly conducted and all funds disbursed accurately.

8. Post Closing
Upon completion of the closing, your attorney will oversee the funding of the loan, perform a final title rundown up to the time of recording, record the deed and mortgage, and disburse all funds associated with the closing, including the payoff of all Seller mortgages and liens. In the weeks following the closing, your real estate attorney will also issue the title insurance policy and advise on any post closing matters.

This website provides general information about the Law Office of Kelly J. Gallagher LLC and its attorneys and is not intended as legal advice nor should you consider it as such. You should not act upon this information without seeking professional counsel.