, It has been said before; buying a house is the single largest purchase you will make in your lifetime. So you have already picked out the house you would like to own, what next? Hiring a lawyer for your transaction is not a legal requirement, and it might add a few thousand shillings to your expenditure. Getting a lawyer and obtaining legal counsel can save you a great deal of time, mitigate the potential risk involved and will most importantly save your money. A real estate lawyer is the most unbiased person in the transaction because their fees are not dependent on the price you get for your house. Dear Home buyer, here is why you need a lawyer.
Understanding the Purchase Contract/ Purchase Offer.
The Purchase Offer is the most important document in the process. It basically lets the seller know that you are seriously interested in the property. Once accepted by the seller, the offer becomes a binding contract. While most people are capable of negotiating face-to-face between two parties, the terms of the deal must be properly memorialized in a contact in order for them to be legally binding. Lawyers can negotiate on your behalf and also make sure that the contract adheres to all the state laws as well as addresses any specific issues that might affect any future personal or commercial use of the property.
This is another important function that real estate lawyers perform. Title searches are completed by or through lawyers and their purpose is to make sure that the property being sold is free of any irregularities. The outcome of the title search is important because it reveals whether the seller has the legal right to sell the property in question. A lawyer will be able to provide this service much faster and at a lesser cost because they often have working relationships with title search companies. If the title is found to be marketable, the attorney will certify the same to both the Lender and the Buyer.
People looking to buy a house are strongly advised to purchase their own title insurance policy in an amount equal to the purchase price of the property. Title insurance policies protect the buyer against hazards inherent with real estate titles which may not be apparent from the title search. The lawyer cannot guarantee against certain defects in the title which are not public record. Such defects not easily detected from a public search include forged deeds, missing heirs etc. An insurance policy will protect the buyer against such defects which may cause you to incur serious losses. This is why you need a lawyer to help you sort out such legal issues.
Dealing with Tax Consequences and Other Issues.
Even though a lawyer may not be needed during the course of negotiations, the buyer and the seller may have to consult with a lawyer to answer important questions such as the tax consequence of the purchase or the sale, including capital gains tax on the seller’s side. Aside from tax consequences, the buyer and the seller may have questions about the date set for closing, date of occupancy, condition of the property, arranging for an inspection etc.
Dispute Resolution – In the course of transactions, even prior to transactions, disputes between the buyer and the seller may arise. It could be a simple misunderstanding or a very big disagreement. Having a lawyer present could help mitigate these disagreements and help the two parties reach amicable solutions.
Closing Documents – After all negotiations have been done, and the property/house to be purchased has been cleared and certified, at the closing of the purchase transaction, the lawyer will issue the buyer with a Settlement Statement which serves as a summary or accounting for the financial aspects of the transaction, including the debits and credits to the buyer and the seller. In addition the lawyer will explain many documents including the promissory note and the mortgage to the buyer. Once the parties have completed the closing documentation, the closing attorney will record the deed which is the instrument by which the seller conveys title of the property for the agreed upon price.
Your lawyer and real estate agent will work with you to achieve a smooth closing by recognizing and dealing with the many items that must be dealt with before the closing. Most problems can be avoided and dealt with before the actual closing.
Having legal counsel makes good business sense because of the many complexities that come with real estate. Purchasing a house is a huge investment and hiring the services of an experienced lawyer could go a long way in protecting this investment. You will have confidence as you put your signature on the dotted line and you will be sure that you are buying a house, not a lemon masquerading as a house.
Get more property insights from Pam Golding.