Buying or selling property is usually the biggest financial transaction in anyone’s life. It can have a ripple effect on your finances for decades to come. Whether those ripples are beneficial or detrimental depends on the details of the transaction.
When dealing with these long-term transactions, it is vital that no mistakes are made. The most effective way to ensure that your real estate deal goes as planned is to conduct your business with the aid of an experienced real estate attorney.
Here are the top 3 ways an attorney can help property buyers and sellers:
1. Potential Tax Consequences
Whether you are a buyer or a seller, there could be tax consequences related to the transfer of property. For instance, what are the income tax consequences of the sale for the seller? Will it be possible for the seller to use the tax provisions allowing for exclusion of capital gains in certain instances? These are important questions best answered by an experienced real estate attorney.
2. Dealing with the Real Estate Contract of Sale
The contract of sale is the formal written agreement for the sale and purchase of a home. If there is one piece of paper that is the most important in the entire process, it’s the contract of sale. Within the written contract, important issues are agreed upon by both parties, including:
- How payment will be made,
- Specific instructions regarding what happens to the title if there is a death before it is transferred,
- How the title should be taken (individually, tenants in common, joint tenants or tenants by the entireties),
- Legality of any additions (those already in place and those planned for the future by the buyer),
- Instructions on how to handle the discovery of lead-based paint, asbestos, termites, etc. on the property,
- Instructions on how to manage the sale if the property is found to be near a hazardous waste dump site,
- And much more.
Having an experienced real estate attorney by your side helps ensure the contract of sale covers every potential contingency.
3. Identifying Problems with Real Estate Zoning, the Title or the Survey
Once the contract of sale is signed, it is necessary to search for and insure the title. An experienced attorney will review the title search and offer an expert opinion, explain the title exceptions and title insurance details. So many questions can arise during this part of the process:
- Is the real estate legal description correct?
- Are there issues with adjoining owners or previous owners of the property?
- Are there restrictions or agreements put in place by the previous owner that will affect the new property owner?
- Will you be able to build a swimming pool?
- Can you conduct your business out the house?
The guidance of an experienced real estate attorney at this point in the transaction can avoid expensive mistakes. Your attorney will provide expert counsel regarding existing and prospective zoning and potential prohibitions. Your lawyer will also handle the review of the survey map of the property to identify issues that could lead to future problems, and will be able to advise you whether or not it would be appropriate for you to accept title in each specific instance.