Buying or selling a home is likely one of the most important financial decisions you will make. There is nothing in the law that prevents you from buying or selling your residence on your own. However, most sellers, and increasingly buyers employ the services of real estate brokers and lawyers to help them navigate through the often confusing world of real estate transactions.
Real Estate Brokers
A broker is a person who helps you buy or sell your home. Both a buyer and seller of residential real estate can benefit from a broker. For example: - Many brokers are members of a multiple listing service (MLS) - Brokers subscribing to a MLS share their exclusive listing agreements with other broker in order to expose your home to more sellers.
- Brokers work for you! The broker you hire is your agent. This means that the broker owes you duties, such as loyalty, care, and diligence.
- Brokers are professionals. Brokers are required to be licensed and are thus educated and trained to help you sell or buy your home.
Listing Agreements
A listing agreement is a contract between you and the broker that creates the obligations and rights of the relationship. It is wise to consult with an attorney before signing any legal document or contract. The listing agreement usually provides: - How much commission the broker expects and when it will be earned
- The length of the relationship
- The length of time a house will be listed
Disclosures about the Property
The seller is usually required to make specific disclosures about the property. This includes: - Material defects within the seller's knowledge ¿ Many states require a seller who knows of a problem with the property to disclose the presence of this problem to the buyer.
- Actively conceal material defects ¿ Generally, a seller cannot actively hide a defect in order to attract a buyer to the property.
- Buyer's Duty to Inspect ¿ Most states find that the seller does not have an obligation to inspect the property before the deed is transferred. Thus, the buyer should hire someone to inspect the property for any defects that are not easily noticeable.
- Inspection Contingency ¿ The buyer can place a clause in the purchase contract stating that the sale is contingent on a property inspection by a qualified engineer or construction expert at the buyer's expense.
Encumbrances on the Property
An encumbrance is something that may prevent a buyer from taking the legal title or possession of the property. Most encumbrances are recorded at the county recorder's office. See Boundary and Title Disputes
Mortgages and Liens
Sometimes a piece of property can be sold subject to a mortgage or other financial lien. A buyer can check whether a piece of property has a lien or mortgage through the county recorder's office. Additionally, a title insurance company should inform you of any such encumbrances on the property.
A buyer may not have enough cash up front to pay the entire purchase price for a piece of property. A financial institution may be able to lend the buyer the purchase money and attach a mortgage to the property. For more information on real estate financing, see Mortgages
Do I Need a Real Estate Attorney if I Want to Buy or Sell a House?
A real estate attorney can guide you through the process, and help you negotiate a price that is right for you. A real estate attorney will also review listing agreements with brokers, offers, and purchase contracts before you sign them to make certain that your requests are met. Further, a real estate attorney can advise you on financing the house of your dreams. |
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