by Steven T. Boell and John L. Krajsa
It’s likely your home is the most important and expensive purchase you’ll ever make. It’s also a valuable asset when it comes time to sell. So why wouldn’t you want to ensure your investment is safe and secure? While a realtor and other service providers like mortgage brokers, home inspectors, appraisers, and title companies are typically associated with a residential home purchase and sale, there are many benefits to including an attorney in your home buying or selling process. See why having a residential real estate attorney support your home purchase or sale, through every phase, is a wise investment.
Agreement of Sale
There are many reasons why you may want to sell your home. Perhaps after in-depth research into current real estate market trends, you decide that now is a good time. Or maybe you have a wonderful job offer that perpetuates relocation and the sale of your home. When you are ready to make or consider an offer, it’s time to make some decisions and put them in writing with an agreement of sale.
An agreement of sale is a contract that establishes the relationship between a buyer and a seller. The agreement includes the terms of the deal including the home price, i.e., what the buyer is willing to pay, and the seller’s disclosures to address the condition of the home. If you are purchasing your home in PA, you’re likely utilizing a standard document published by The Pennsylvania Association of Realtors, so it seems pretty reasonable to have your realtor move forward drafting this for you to keep the process moving, right?
Every property being sold or purchased likely has something unique to it. While a standard document should cover most things about a property, what about items within the home like appliances, furniture, or exterior structures? Sometimes home features like a basement bar or smart lighting systems are unclearly included or excluded from these documents, leaving the buyer powerless or frustrated at closing. Or perhaps there is a timing contingency you just don’t want to agree to as the seller.
A well-constructed or reviewed agreement of sale by an attorney offers several advantages:
- Customization – an attorney can modify or add clarifying language to an agreement of sale, reviewing optional clauses and disclosures as well, to make sure the parties understand the transaction.
- Protection – your attorney is exactly that – yours; so when you hire one to help with your real estate transaction, their sole focus is protecting you and your interests, ensuring the terms of your agreement align with your expectations.
- Liability – when it comes to the state of the property, financial items and contingencies, a residential real estate attorney scrutinizes contracts and incorporates language in an attempt to limit your liability, as the buyer or seller, should anything not go as planned.
- Attention to Detail – the details matter. Sometimes unique home features like a basement bar or smart lighting systems are left out of an agreement of sale, leaving the parties frustrated and at odds at closing. An attorney will work with you to incorporate the details unique to the home into the agreement of sale.
- Negotiation – your attorney has your back and will work to negotiate with the other party on your behalf.
- Understanding – perhaps most importantly, an attorney can walk you through the details of the agreement of sale and answer your question, so that you are comfortable with and understand any document you are signing.
- Dispute Resolution – should a dispute arise, you have an attorney in your corner, advocating for you in the home buying or selling process.
Due Diligence
After the agreement of sale is signed, it’s time for home appraisals, inspections and more. An experienced residential real estate attorney can offer guidance about:
- Zoning – if you are an entrepreneur and plan to run your business out of your home, or maybe raise chickens on your property, an attorney can help you understand local ordinances, i.e. what you can and cannot do on your property, and navigate issues that may arise.
- Title search and insurance – often an attorney’s office can assist with a title search and insurance which allows for an investigation of the property to see if there are any judgments, liens, encumbrances, easements, or encroachments against the property, making sure it can be successfully transferred to or from you. For example, titles to properties can often sometimes restrict things like pools and building modifications.
- Inspection issues – despite a seller’s disclosure, it’s possible for a home inspector to unearth issues like termites, water damage or HVAC issues. Sometimes these cause disputes between the parties which can be negotiated by your attorney. An attorney also provides an independent voice in the process. While realtors provide a critical role in a transaction, their commission are contingent on closing occurring. As attorney’s fees are not contingent on closing, they can provide independent counsel, and when due diligence warrants advise clients to walk away.
Closing and Post-closing
If you’ve gotten this far in the process, you may think it’s time to cut your residential real estate attorney loose – think again! Having your attorney at your closing and settlement appointments means you have an advocate.
During the closing process, the purchase/sale is completed. To some, this process is overwhelming, as you’re likely in the midst of packing and preparing your family for the day. Signing your name on what feels like hundreds of lines in a huge stack of paperwork can cause fatigue and make you not want to even read any more. Your attorney helps with document review and recording, clarifying any questions surrounding your:
- Settlement sheet
- Deed
- Loan documents
- and other closing documents
This is where an attorney can double check your line items, down to making sure contractors were paid correctly.
Cost of Title Insurance
When it comes to the title insurance, Pennsylvania uses a standard formula to calculate title costs, so whether your attorney does it as a Licensed Title Agent or another agency, the price is the same.
Cost of a Residential Real Estate Attorney
How much does a real estate attorney cost? Each transaction is unique. Contact one of our attorneys today for a quote specific to your transaction.
Next Steps
Let’s face it – buying or selling a home can be stressful. Having a residential real estate attorney on your side gives you peace of mind and confidence as you manage what’s likely the largest investment of your life. Reach out to a member of our Real Estate team to see if we can assist you in an upcoming home purchase or sale.
