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Hillard N. Einbinder, Attorney at Law
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Common Sense Recommendations
Before The ClosingI Use an attorney who specializes in real estate.
If you want a smooth, hassle-free closing you should use a real estate attorney. He has the necessary knowledge and experience in real estate.
Real estate attorneys are uniquely familiar with the terms of the real estate contracts and their implications.
Real estate attorneys enable you to close with confidence and pursuant to the negotiated terms. Don't use a real estate lawyer for a divorce and don't use a divorce lawyer for a real estate closing. Logical, right?
II Get your attorney involved as soon as possible.
Take advantage of your attorney’s experience. By meeting with your attorney in advance, he may assist you in:
1. Structuring your deal. For example would you like to save cash and finance your closing costs? If so, your attorney may suggest that you add your closing costs to the purchase price, and obtain a credit in the same amount at the closing.
2. Adding and subtracting contingencies. For example, if you need to sell other property to qualify for your purchase, you may need to add a Hubbard Clause to the contract. If you are in a bidding war for a particular property and know that you qualify for the necessary financing you may be willing to delete the mortgage contingency to make your offer stronger and distinguish it from the competition.
3. Performing necessary due diligence and identifying risks.
Are you employing the services of a professional property inspector? If not, why not? In the unlikely event that your inspector misses something important, you will sleep better knowing that you did everything in your power to identify the problem before it came to light.
Did you test for presence of radon in the air, and well, if there is one?
How old is the roof? Does it leak?
Is the property serviced by a septic system? Has it been regularly maintained? A septic system has a useful life. How old is the system in question?
Is there an underground oil tank? Was there ever one in the past?
Does the home have a chimney? Did you check the condition of its liner?
Are you closing with tenants in possession? If so, is there a lease? What is the payment history? Is the tenant responsible? If there is a tenant who is vacating what is the likelihood that he will not timely vacate?
4. Suggesting a particular lender or loan type.
Your choice of lender will have a major impact on the quality of your experience.
Generally, I do not recommend shopping on the
internet - although I have had my share of good experiences.My preference is for my clients to deal with a local broker or lender who acts professionally and offers them financing at the going rate with minimal closing costs.
As to the type of loan, it is important to consider your intended holding period. For example, if you plan to stay indefinitely, a 30 year fixed rate loan may be your best option. If your holding period is short, you may want to consider applying for an interest only loan to keep the payment down.
5. Understanding the implications of the initial paperwork that you are asked to sign.
In some areas, such as New Haven County, realtors customarily prepare and present the buyer with legally binding contracts. In this instance, if you do not want to be legally bound until after your attorney has reviewed your contract, you may insert wording such as “subject to attorney review” on the document. In other locales, such as Fairfield County, realtors prepare only binders. They are not legally binding documents, and you do not have a deal until the seller’s attorney prepares a formal contract, and it is signed on both sides.
6. Understanding the principal “OUTS”.
There are 2 principal ways to get out of almost every real estate transaction.
The easiest way out of most deals is by way of the physical inspection contingency. The wording of most inspection contingencies provides that such inspection must be “satisfactory to buyer”. If you are having second thoughts and want out of your deal, it is best to do so prior to the expiration of the physical inspection contingency. In most cases, this can be accomplished on a “no questions asked” basis.
The second principal way out of a deal is through the mortgage contingency. The intent of this type of contingency is to provide the buyer with an out if he is unable to obtain the necessary financing. However, depending upon the wording of the contingency, it may also be possible to use it to get out of the deal when you have had a change of heart.
7. Get your deal as close as possible before giving the other party reason to involve his or her attorney.
As soon as any document is signed, even a non-binding purchase offer, any modification of terms will likely involve the other party’s attorney. That attorney will not be inclined to favor any changes that do not serve the best interests of his client. If you have signed a binding contract that is not “subject to attorney review”, it may be too late for your attorney to make any changes.
It is also interesting to note that generally, it costs pretty much the same to engage the services of a real estate attorney to prepare the contract, provide guidance and close your deal, as the cost that you will pay the same attorney only to perform the closing.
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|| Previous Page ||DISCLAIMER: This entire website and all information contained herein are intended for informational purposes only and should not be construed as legal advice. You should always seek competent and licensed legal counsel in your home area for advice on any legal matter. The laws, rules and regulations can vary from juristiction to jurisdiction.
Copyright © 2007 - 2008 Hillard N. Einbinder, Esq.