Buying a house? You’ve probably found a real estate agent and it’s likely you shopped around for a bank or mortgage lender. You’ll get referrals for title companies and inspectors. But what about a lawyer? Most people don’t consider an attorney an essential part of a real estate transaction, but having a lawyer on your side can help when buying or selling your home.
Attorney Ada Ferrer of the Ferrer Law Firm in Sugar Land, TX spoke with us about how a lawyer can assist with a home purchase.
Although Ferrer says most people don’t need a lawyer for buying a home, there are several situations where it can be essential.
Buying Your First Home
If you’re purchasing your first home, there’s a lot of new information, complicated forms, and industry lingo that you’ve never heard before. A real estate attorney can help you understand the terms of any deal you’re considering and make sure you’re not getting the short end of the stick.
“It’s always a good idea to know what you’re getting into. A lot of people get taken advantage of, and spending a few hundred dollars for the peace of mind is worth it, especially when you’re going to be spending a few hundred thousand dollars,” says Ferrer.
Problems Between Buyer and Seller
Hopefully, your home purchase or sale will go off without a hitch, but problems can and do arise. A real estate lawyer can help you sort them out.
Say perhaps you’ve made an offer on a home, but all of the sudden, the seller becomes reluctant. Maybe they got a better offer after accepting yours and want to rescind the contract or make you pay more. In such a situation, having an attorney to help enforce what you agreed to can be very helpful, says Ferrer.
Dealing with a Title Issue
Title issues can be a headache to resolve on your own. From liens to property disputes, title issues will complicate the sale of a home.
“Let’s say the husband got a judgment against him. He and his wife live in the family home – it’s their homestead. This creditor files a judgment against the homestead. Under Texas law, you can remove that judgment from the homestead, so they can sell the house,” says Ferrer.
Another example might be a couple that owned a home together and now is divorced. One spouse got the house in the divorce settlement, but the other spouse’s name is still on the deed. A lawyer can help get that changed, says Ferrer, so they can sell the home without having to involve an ex.
As a home buyer, your lender will require a title search be done before closing. A real estate lawyer can help you resolve a title issue and move forward with the purchase.
“For Sale By Owner”
If you’re buying a “For Sale By Owner” property or you are the seller, make sure you get a lawyer to help guide you through the process. A real estate attorney can help draft the proper documents for the sale or review the seller’s documents to make sure they are valid. A real estate lawyer’s help is necessary to ensure any offers made are legitimate and the terms of the sale are legal and fair.
Contract for Deed Properties
First, says Ferrer, a good real estate lawyer would caution clients against doing a contract for deed to sell a property. A contract for deed is basically a rent-to-own situation with real estate, but Ferrer says they are “highly disfavored by the courts,” which could mean you end up with a legal mess on your hands. But if you do choose to enter into a contract for deed, you need to involve an attorney, Ferrer says.
“If you’re adamant about doing it, you have to understand that strict compliance is required. If it’s not made in accordance with Texas law, the seller could be on the hook for three times the amount of damages and $200 a day. If you’re the purchaser, you need to know you could potentially lose rights to purchase this house if you miss a payment within the contract,” explains Ferrer.
Purchasing a Foreclosed Home
A foreclosed property could be attractive if you’re looking to save money, but buying a foreclosed home can be tricky. Before you start looking at properties, get a lawyer’s help, says Ferrer.
“As an attorney, I can walk them through the process of identifying the property they want. With a foreclosure, you can generally only look at the outside. People start with a long list of prospective properties and then narrow it down to a few homes they want to bid on before getting a title company involved,” says Ferrer.
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