Judging from our workload, real estate sales are very hot at the moment. If you are in the middle of a real estate transaction or a real estate transaction is in your future, here are a few things to keep in mind.
We are hearing a lot about the scarcity of used homes, which is driving up prices. Keep in mind that lenders will only loan based upon a realistic appraisal of value, which may not reflect a sales price that resulted from a bidding war. Sellers who have inked a deal and taken their home off the market may find themselves, weeks later, dealing with buyers who cannot get the loan they were counting on. Buyers, on the other hand, may find themselves being forced to come up with more money down or risk default, which could result in the forfeiture of their deposit or litigation.
Because it sets forth the rights and obligations of the parties, the purchase agreement remains the single most important document in any real estate transaction. Resist the urge to sign “something” in order to lock in the deal in the mistaken belief that you can iron out the details later. Signing a hastily drawn purchase agreement is never worth the risk. At a minimum, include a clause that allows you time to consult with an attorney and, depending on the attorney’s advice, back out of the deal.
The second most important document is the title insurance commitment. When it comes to title insurance, the devil is in the details or, more to the point, in the exceptions to coverage. Coverage may end up being so limited that it amounts to very little coverage at all. The title insurance commitment needs to be read carefully and evaluated by someone who understands title insurance coverage.
The attorneys at Wright Beamer have a tremendous depth of experience in all types of real estate transactions. We would welcome the opportunity to work with you. Please contact us if we can help.