If you’re planning to sell your home, you’re starting to get a sense of all the things that are involved. But you might not be aware of the legal and financial complexities that come with selling real estate. Because of what’s at stake, there is a chance that a buyer could take legal action, and there can be a number of reasons why.
It’s important to know what to expect so you can be more able to protect yourself against any civil liabilities, and you should also understand the different parts of the sales process. Doing so will save you a great deal of frustration down the road.
Using a Real Estate Agent
Selling a home isn’t difficult, but it can be time-consuming. There is a great deal to manage – from listing the property to negotiating a price and closing the sale. That’s why most sellers work through a real estate agent. Not only can he or she represent the buyer, but he or she also understands the market better than someone else.
When you first start working with an agent, you will receive a “consumer disclosure,” which will explain all the possible roles that he or she can play. You are also going into a “listing contract” with the agent, as you are giving that person the authority to promote the property through various means. Be sure to ask questions before you agree to anything because you want to get as much information as you can before you decide to commit yourself.
Real estate agents are obligated to perform certain duties that need to be in accordance with the laws of the state in which they operate. These can include, but are not limited to:
- Using care and skill throughout the sales process
- Following your instructions (as long as it’s in accordance with the law)
- Accounting for any money that is in his or her control
If the agent fails to fulfill these obligations, he or she can face severe legal penalties.
All sellers are obligated to inform prospective buyers of any problems that are associated with the property. They must use a standard form (called a “seller’s property disclosure form”) to outline them clearly.
Some of the things that sellers are required to disclose about the property may include, but are not limited to:
- Title issues
- Roof issues
- Plumbing and sewage problems
- Property and drainage problems
- Problems with the foundation
- Problems with heating and AC
- Water leaks
- Termites and other infestations
- Lead paint
No matter what you may need to disclose about the property, you want to be as accurate and honest as possible, and you should speak to a qualified real estate attorney so he or she can keep you informed about the disclosure laws in your state.
The Purchase Agreement
If someone is interested in buying your home, you will receive a written offer. This will include a “purchase and sales agreement,” which will list all the terms of the sale. Be sure to understand all the details of the offer, and you won’t have much time to respond.
Once you receive an offer, you will have the choice to accept or reject it. You can also make a counter-offer – some of which may include:
- A higher price
- A higher deposit
- Less time to resolve certain contingencies (such as financing or selling your current home)
- Excluding certain items from the sale (such as appliances and furniture)
- Time for an attorney to look at the contract
This cycle offers can continue until an agreement is made.
Once you make a sale, you are required to give the buyer a “clean title,” which means that there must not be any issues or conflicts associated with the property. Some of them might be anything that may be attached to previous owners and mortgage holders (such as unpaid property taxes). The best way to address this issue is to speak to a real estate attorney. He or she can look into the title to see if there are any issues.
When the sale comes to a close, the buyer pays the price that the two of you have agreed upon. The title and keys are also transferred to the buyer – that is, if there aren’t any problems with the transaction.
A great deal goes into the closing of a real estate sale, and there are costs to the seller. Most of them come in the form of taxes and fees, and they can include:
- Current mortgages and liens
- State transfer taxes
- Local transfer taxes
- Payable commissions to the agent
The agent can be present during the closing process, since he or she played a role in facilitating the sale. An attorney can also be present, as he or she can represent you in case there is a legal issue.
Most home sales are completed without any problems, but there is always a chance that someone can take legal action against you. Not only can they take a great deal of time to resolve, but it can also cost you a considerable amount of money.
Some of the common legal issues related to home sales are:
- Breach of contract – When one party breaks the terms of the purchase agreement.
- Disclosure of defect – When a buyer finds a problem with the property, and he or she thinks that the seller is liable.
- Fraud or misrepresentation – When the seller has made a claim about the property that isn’t true, and the buyer relied on the information to make a decision.
- Sales commission claims – When any commissions associated with the property’s sale is being disputed.
These claims often result in some sort of monetary payment that is made to cover any damages, or they may require one party to perform certain actions to which the contract required.
Finding a Real Estate Attorney
Real estate law can be complex, and it can vary from state to state. Not to mention, there is a significant amount of legal liability that can come with the sale of a home. It’s important to take whatever measures are necessary to protect yourself from any potential lawsuits, and a real estate attorney is your best line of defense.
If you want to find out more about how we can help you, get in touch with us today!