Legal Myth Busters: Real Estate Closings Are Simple
Every week, without fail, I find myself involved in discussions with people who have been misled about various aspects of real estate law, in particular with house closings. One of my favorite tall tales is that you don't need an attorney for a real estate closing because closings are easy.
It is easy to be misinformed, especially with so much incorrect information floating around the Internet, not to mention the legal advice provided by family and friends. I am sure that somewhere along the line you have received "quality" information about the ease of buying and selling real estate from a friend of a friend, whose sister's uncle's, brother's cousin was a lawyer, or at the very least has seen My Cousin Vinny 18 times. Well gang, its time to bust some legal myths so let's get to it.
CLOSINGS ARE EASY (Just as Easy as Getting Your Driver's License Renewed or Giving Birth)
Let's cut to the chase, real estate closings are NOT easy. Each closing carries with it a unique set of difficulties. Sure, some are less difficult than others, but there is no such thing as an easy closing. Can you handle a real estate closing without an attorney? Of course. I bet you an NBA superstar can deliver a baby on an airplane without a doctor but does that sound like a good idea? Let's take a closer look at the closing process to find out why closings are complicated.
Once an offer is made and excepted, the real work begins. Did you know that 99.9% of all standard real estate contracts need to be modified to protect your rights more fully? It's true. The standard form contract, which is littered with legal jargon and confusing terms, should not be signed without proper review and negotiation. Lawyers are trained to review and amend real estate contracts to provide you with the best protection possible. When a non-lawyer reviews and/or negotiates a contract, nine times out of 10, they fail to spot a variety of serious issues that may affect them later in the closing.
So the question you need to ask yourself when deciding if you are going to hire a lawyer or review and negotiate the contract yourself is, "Do I feel lucky?" Well, do ya, punk?
Once the 3-day attorney review period is over, you will have to live with the terms and conditions of the contract that you have. If you don't comply with the contract or try to cancel the deal for a reason outside the reasons listed in the form contract, you could be sued for breach of contract.
The home inspection can be a challenging part of any closing. I am not talking about the actual inspection, but rather with deciding if the issues identified provide grounds to cancel or if you should request a credit or repair. Anyone can read a home inspection report and ask the seller to fix all of the issues identified. However, only someone skilled at negotiation and familiar with the process can help you get the most money for the issues listed in the report, negotiate repairs by the seller or cancel the contract.
Another reason that closings are NOT easy is that there are often times title issues that need to be fixed before the property can be sold. Dealing with title agents can be challenging if you are not familiar with how to fix clouded title issues.
Since most people have an attorney representing them, if you are going it alone, you may be at a significant disadvantage simply because you are going to have to deal with the other side's attorney. The other attorney has a duty to his own client only. He or she is not going to help you simply to close the deal. in fact, some attorneys might even try to take advantage of the fact that you don't have an attorney (shocking, right?)
Aside from the attorney issues, the buyer or seller may be difficult to work with. For example, a seller may refuse to make repairs or may want to cancel the contract because the new house that they planned on purchasing fell through.
Other challenging situations include constant changes to the closing date and related delays, non-responsive buyers/sellers, tenants who refuse to leave, etc.
RESULT: MYTH BUSTED!
There is no such thing as an easy closing. If you are buying or selling a house or property, you need to hire a real estate attorney to protect your rights. An experienced real estate attorney can help make your closing seem effortless and easy, but they don't tell you about the hours of frustrating phone calls, back-and-forth negotiations, the legal documents they drafted . . . you get the point. Now, go out and get a real estate lawyer to help you buy or sell a home!