An attorney can assist in making sure your mortgage payments are satisfied properly and that your title insurance covers you adequately. Furthermore, your attorney can review a contract of sale to make sure it satisfies all your needs and meets them fully.
Your attorney can also negotiate the terms of your purchase contract and order a title and lien search to identify any potential issues that could disrupt the process of buying real estate.
Title Search
Title searches are conducted to establish the legality of property deeds. The process typically includes checking county, town and municipal records for potential issues that might compromise them such as liens, money judgments or anything that might tarnish their title to it. It also checks for easements (nonowner’s rights to use land for purposes other than utility lines or driveways) and property taxes to make sure there are none present that could impact a title search’s results.
This step can reveal essential information such as financial rulings prohibiting the current owner from selling the property, inaccuracies in its survey and restrictions that limit its use. Any issues discovered during this stage should be rectified prior to closing through actions such as paying outstanding liens, correcting deed errors and negotiating easements.
Title searches are required as part of the loan underwriting process for mortgage loans, and failing to identify and resolve potential title issues before closing could expose buyers to expensive legal action from financial institutions, property tax collectors or homeowners associations.
Contract Negotiation
Contract negotiations allow both sides of a property transaction to negotiate terms with an eye towards creating a legally bind contract. Real estate contracts tend to be lengthy and contain terms unfamiliar to people outside of law, so consulting a lawyer is helpful in reviewing and revising them to make sure they meet local sales laws and remain clear for everyone involved.
Negotiations points may also include less tangible elements, like getting the seller to agree to keep certain fixtures or personal property in the house, changing the timeline for closing, or sharing costs associated with unexpected repairs. Carrel advises buyers entering negotiations to have an understanding of their financial realities including income, expenses and savings accounts – pre-approved mortgage approval is another great way of signaling this readiness if terms do not match up.
Enhancing your bargaining power during negotiations by increasing the earnest money deposit is another proven tactic to enhance leverage during negotiations, according to McGovern. But be careful: going too far could undermine any negotiation you enter into, she cautions.
Mortgage Documents
Most home buyers finance at least 80% of their purchase with a mortgage loan from a lender, so having access to legal expertise regarding mortgage lending practices will allow you to negotiate and secure an attractive mortgage agreement.
Lenders require their borrowers to provide several financial records and documents, such as tax returns and bank statements from the previous one to three years. Lenders usually look at your debt-to-income (DTI) ratio in order to ensure you can manage any additional obligations of mortgage payments without straining yourself financially.
Your attorney will also prepare the necessary closing documents, such as the deed and mortgage or note to secure debt as instructed by your lender. He will search for unpaid taxes, liens, litigation or any other obligations to clear before conducting the closing ceremony wherein the seller transfers ownership to the buyer and he pays any remaining purchase price from proceeds of a mortgage loan loan.
Closing
Closings are events where title to property changes hands through deed, stock certificate or promissory note signing and money exchanges hands. A closing attorney often attends these closings to record documents related to them.
Before closing, buyers should conduct a final walkthrough to confirm all agreed-upon items are present in the property sale agreement. Also, any contract can only be cancelled once certain contingencies such as home inspection and mortgage loan commitment have been fulfilled.
An experienced real estate attorney can help you understand and adapt the language of a purchase contract to fit your unique transaction, including helping resolve questions such as how the parties should take title (individually, tenants in common or joint tenancy), when and how much a mortgage payments are due, what constitutes personal property and so forth. Contract negotiations handled with attorney assistance often help avoid conflicts at closing table.
