If you’ve stumbled upon this article, it is probably that you are considering selling your home. While many people simply choose to work with a real estate agent, having an experienced real estate lawyer’s support and advice is always a good idea to make the process as safe and effortless as possible on your end. The benefit of having a real estate attorney advise you on the sale is that you will have access to highly competent and specialized legal advice from an individual who has significant experience in the types of problems a real estate transaction can cause and knows how to avoid them in the first place. Learn more about what questions you should ask a lawyer when selling your home.
Questions to Ask Before Hiring a Real Estate Attorney:
It’s always a good idea to do some research before you decide on who you want to represent you in the sale of your home. A qualified real estate attorney can protect you from many legal pitfalls and ensure that you are not setting yourself up for future problems with the transfer of property, making concessions and disclosures, or paying excess taxes. When speaking to potential real estate attorneys in any state, you can certainly ask questions. Some examples of reasonable questions would be:
1-How long have you been practicing real estate law?
2-Do you have experience with the same kinds of issues that the sale of my property would include?
3-Do you only practice real estate law?
4-How much would you charge to assist me with this property sale? Do you bill the flat fee or hourly?
Feel free to speak with more than one real estate lawyer before making your decision. Any red flags should be listened to. For example, if the attorney seems rushed when speaking with you or misses your call, that might be a sign that they won’t have adequate time to spend on your sale. Another red flag would be any refusal to have a frank conversation regarding what you will be charged for their services. The sale of any property, not just your home, is a huge decision, and you have every right to thoroughly investigate prior to committing to anything. For more information on Real Estate laws in general read our article on recent changes to real estate law 2022.
Questions To Ask Your Real Estate Lawyer Before Selling Your Home:
If this is your first time selling a home, there are many questions to ask and items to consider as you move forward. As a home seller, you have certain rights and powers, but you also have specific duties and disclosures required of a potential buyer. The individual facts and circumstances of each home sale can vary, but here are some questions that can be applied to a broad range of home sales without any unusual complications.
1. Ask About Any Letter To A Home Seller
You will want to ask your real estate attorney to review any letter you receive from a potential buyer who is making an offer on your property. It’s typical for a potential buyer to send a letter if there is more than one buyer interested in purchasing your property, otherwise known as a bidding war. Of course, as a seller, this is music to your ears, but you want to be certain that any offer contained in the letter is something that leaves you in a good position after any purchase is completed. Ensure you include your real estate attorney in the review and evaluation of any letter to the home seller.
2. Ask About Home Sales Capital Gains Tax
You should ask your real estate attorney if your property sale will be subject to a capital gains tax. The answer depends on whether the property is your primary residence or something else, like a vacation or investment property. The appreciation of your home will also play a part. An experienced real estate attorney will be able to tell you if there are tax considerations for the sale of your property will be and how to best maximize your return on the property sale.
3. Ask About Seller Concessions
If you are considering making seller concessions or a potential buyer has asked for seller concessions, you need to explore the feasibility of any concession with your real estate attorney. Seller concessions are also called seller assists or seller contributions. Sometimes a seller concession is a great idea, and other times it can be harmful in the long run. The best rule of thumb is to discuss what you are willing to do and not willing to do with your real estate attorney before the situation even occurs. If a seller concession is requested by a potential buyer that has not yet been decided on between you and your real estate attorney, then you need to ask your real estate attorney about the potential long-term consequences of making the concession. Typically, a seller concession takes place when a potential buyer cannot afford all the costs involved in the home buying process. If you are in a buyer’s market and not a seller’s market, you may be forced to agree to a sale with contingencies (concessions) in order to unload the property.
4. Ask How Much The Seller’s Closing Costs Are Before Making The Sale
Be certain you discuss closing costs with your real estate attorney. Closing costs are a group of expenses for the seller to consider when selling a home. A percentage of the home’s price is charged for transfer tax, and the rate varies with the state law. There is title insurance. Escrow costs and any changes that are made to the property in order to close the sale. Finally, it is not unusual for the seller to pay for both realtors’ costs if the parties use a real estate agent.
5. Ask About Home Seller’s Disclosures
Most states require that a seller make a certain number or type of disclosures before a home sale is finalized. Different states can require a deadline for the seller to make certain disclosures in a report before finalizing the sale contract. A seller cannot escape making certain disclosures simply by stating that the property is being sold “as is.” Some common disclosures are if there was a death in the home, any hazards, neighborhood nuisance, water damage, and the presence of a homeowner's association. Some states also offer “loopholes” where the seller agrees to pay a credit to the buyer. The best advice is to discuss your concerns about disclosures with your real estate attorney and disclose as much as they advise in order to avoid any problems with the buyer post-sale.
6. Ask About Your Options If You Change Your Mind About The Sale
A question that is not asked often enough until it is too late is if the seller can back out of the sale contract. An experienced real estate attorney will be able to advise you if you are having second thoughts on the sale or have been contacted by a buyer who is willing to offer a better deal. In certain situations, the seller can back out of the sales contract. While individual facts and circumstances inevitably vary from seller to seller, here are some examples of where a seller can generally back out of the sale:
- If the seller has a new home contingency written into the sales contract by their real estate attorney, in other words, the contract contains a provision that the sale will only be final if the seller can secure a new home. No new home secured means that the contingency is not satisfied, and the deal cannot go through. If the attorney wrote the contract properly, it would be abundantly clear that the sale contract is only good contingent on the seller procuring a new home.
- Attorney review-ideally, you are already working with a real estate attorney to sell your home. The proposed contract of sale can contain an attorney review provision that states if an attorney reviews the contract and finds fault in it, the seller can back out, even if the contract has been signed. Law requires an attorney to review a home’s sales contract before it can be finalized. The laws in other states differ, which is another good reason to have a real estate attorney help you with a home sale.
- Appraisal contingency-we have already talked a lot about contingencies in this article, and that’s a good thing. The sale of a home is a pretty complex process with many moving parts. Contingencies built into any contract or sales agreement are great tools for protecting both parties. If a contingency is not met, the contract is typically void. An appraisal contingency means that if the appraisal comes back lower than expected and the bank won’t approve funding for the buyer, the seller is free and clear and can move on to another potential buyer.
- Home inspection contingency-another contingency that could protect the seller and allow them to back out of the deal is the home inspection. If the home inspection reveals problems with the property and the buyer asks for a seller's credit (the amount it would cost to fix the problem), and the seller refuses to do so, then the seller can walk away from the deal because buyers can make their offer contingent on the property passing the home inspection.
- Buyer agreement-in, in rare instances, the buyer may simply agree to let you out of the deal.
- Breach of contract-if the sales contract requires some action or payment by the buyer, especially if it is within a certain timeframe, and the buyer does not comply, the seller could be clear to walk away from the deal.
7. Ask About Checklists And Guides
It would be a good idea to ask your real estate attorney about any home seller checklist or home seller guide that they can offer or recommend that addresses the home sale process. Your attorney may have a handy checklist of things to take care of before or during your home sale process, and there may also be a guide to take you through a basic home sale. Getting as much information as possible is always a good idea for this sale and future sales. Getting that information from an experienced attorney guarantees that the information is accurate and up to date.
So those are the top seven questions to ask your real estate attorney when you are thinking about or ready to begin the process of selling your home. The home sale process can be complex and confusing, especially if it’s your first time and you want to be certain that you are protected legally and get a great investment return. If you are considering selling your home and need to consult with an experienced real estate attorney, feel free to give O’Flaherty Law a call, we would be happy to help you.
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