Common Real Estate Questions

My real estate agent says that I don’t need an attorney. “Attorneys only complicate things,” she said. Why might I need an attorney when buying a home?

Of course your agent thinks you don’t need an attorney. No one thinks they need an attorney – until they need an attorney. Real estate agents tend to mistake our looking out for you as complicating matters. Before signing any contract and especially before putting up any deposit, it’s extremely important that an attorney review the contract. It’s important to ensure that that money is refundable to you for as long as possible and that we set up various ways for you to be able to back out in the event that you find a defect with the property or simply don’t qualify for financing.

After the contract is signed, it’s important that all deadlines are timely met, and that a complete title search and lien search are performed (yes, these are two separate things).

Our job is not complete at closing either: We need to make sure that all documents, deeds, mortgages, payoffs, loan packages, etc. make it to where they need to go.

For the most part, an attorney can save you more money than what an attorney costs you. Hiring an attorney for a real estate closing is really the only way to do it.

What is title insurance and why do I need it?

Title insurance is a very special kind of insurance. It is the only type of insurance that covers things that already happened. Take for example, car insurance. If you bought car insurance but had an accident the day before you purchased it, surely, your new automobile insurance company wouldn’t cover your car. That insurance only covers your car after the date of the policy. Title insurance, on the other hand, provides coverage for things that happened before closing, not after. Improper divorce, probate not completed properly, old mortgages that weren’t satisfied, liens against developers or past owners – title insurance make sure that you are covered. If you mess things up after closing, you are on your own.

Title insurance premiums are set by statute and cost about $500 for every $100,000 in coverage. You only pay it once, at closing, and it covers you for as long as you own the home.

Title insurance just makes sense.

I have a mortgage on my house. Can I transfer my home to my son or daughter?

Yes, but be careful. You could transfer your house to whoever you want – end of story. However, there may be consequences to you for doing so. If there’s a mortgage on the property, there is usually a provision that requires you to pay off the mortgage if and when the property is transferred. Even if you are making payments on the house, this transfer is a technical default of the mortgage and may result in foreclosure. Practically speaking, in all of our years of practice, we have never seen this happen, but it’s something to think about.

Why are my closing costs so high?

There are many reasons why your closings costs could be high. And these costs could be legitimate, too. But your lender or closing service provider (like a title company) may be overcharging you. Or your lender could be forcing you to prepay certain things like insurance and taxes, which you may not fully understand. Finally, you just may not understand the entire transaction and simply need an explanation as to what exactly is going on. We can explain the HUD-1 Settlement Statement and help you get a full understanding of your real estate closing.

We are supposed to close tomorrow and my lender needs additional time. What happens now?

It depends. We need to review your contract to find out exactly what your rights are. Obtaining an extension of the loan commitment period or of the closing date may be just what you need. The most important thing to do is to protect your deposit. You don’t want to lose what could be your entire life savings over a little delay in closing.

Why are the seller and the realtor rushing me to close? I don’t feel comfortable.

This is a huge red flag.

We get telephone calls and emails like this all of the time. The bottom line and the usual cause of this is pretty simple – fraud. If at any time, you’re not comfortable with any of the parties in a transaction, it’s important to take a step back and look at the big picture. Contacting an attorney is probably the smartest thing you can do when buying or selling real estate, especially when one of the players is shady. Just getting us involved will usually stop any funny business and the transaction will either proceed as it should, or we will just shut it down.