If you are buying or selling a home, which professional is 100% on your side?
If you think so, try to negotiate both the “boilerplate” of the listing agreement. You may be able to negotiate the percentage rate charged for the realtor’s commission. But not the boiler plate, the so called fine print. Knowledgeable attorneys can usually somewhat level the playing field with modifying the “boiler-plate.” Many realtors accept these changes rather than lose a listing.
Well, what about the inspector of the physical property? Many Realtors have their “go to” inspectors. Some realtors recommend those on a short list. The inspectors receive most of their business through realtors. Don’t you think the inspector will be concerned to protect his/her referral sources? Not all inspectors are of equal quality or integrity.
Suppose an inspector makes a mistake, or is just plain wrong. Or the inspector just misses something huge, for example mold. What is the liability of the inspector? Usually the contract language with the inspector limits the recovery of the person who hired the inspector to damages up to the amount of the cost of the inspection. So if the inspection cost $300, and the cost to remediate the mold is $10,000 the inspector may only be responsible for $300 in damages. So how much is the inspector on your side? Frequently the buyer has 5 to 10 days to inspect the property. An inspection is set by the buyer and/or the realtor. The buyer and the seller meet the inspector at the home. The inspector pull his clipboard and checklist and goes through the house with the realtor and the buyer. This puts additional pressure on the inspector. At the end of the process the inspector hands the buyer the inspection checklist, which is the report, signs it, and frequently has the buyer sign off. The buyer gets a copy. In the fine print is typically the clause limited the inspector’s liability. So even if the buyer notes or complains about the limitation of liability, under the circumstances usually too late to find, hire, and reinspect the house.
The Title Insurance Company
Does the title insurance company primarily protect the buyer? First it protects itself. Second it protects the lender. Third, it protects the Buyer—sort of. The title insurance policy for your lender may contain protection against potential defects, which the buyer’s policy may not contain. There are even standard exceptions to policy coverage which apply in the buyer’s policy which do not appear in a lender’s policy. In addition, the owner’s title insurance takes exception for documents which appear in the chain of title. So, is the title insurer on your side? How do make sure the title company pays off the sellers’ loan? How protect the seller that the title company’s check is good funds? Most title insurance commitments to issue a title policy take exception for items appearing in the real estate records prior to the title company recording the deed from the time it did the title search. Why should the buyer run this risk? So whom does the title company put first?
The Settlement Agent
The settlement agent or settlement attorney is usually employed by the title company to handle the settlement and closing. Closing typically refers to the completion of the documents in the loan portion of the transaction and what is necessary to perfect a lender’s interest in the property. Settlement typically refers to carrying out the various provisions in the agreement of sale. Most settlement agents and/or attorneys provide a letter to the buyer and to the seller stating that their role is to “represent” the title company and that they do not represent either the buyer, or the seller, though they may tangentially represent the lender. Suppose you are in settlement and a problem arises, to whom does the settlement agent owe loyalty?
Who is on your side?
Buying or selling your home? Who puts your best interests first?
As your attorney protecting and advising you is my only priority. You are my only concern. I have no divided loyalties.
If you are the seller, when should you hire a lawyer?
Before you sign the listing agreement with the realtor. If you did not hire a lawyer to review the listing agreement, you should hire a lawyer prior to signing the agreement of sale. Typically it is less expensive to have the realtor prepare the agreement of sale, but it should be reviewed by an attorney knowledgeable in residential real estate matters to change appropriate language so it better protects you.
If you are the buyer, when do you hire a lawyer?
Before you sign any agreement whatsoever relating to the house, whether it be the seller’s realtor or your own. Before you sign an agreement of sale, hire a lawyer of your own choosing. A lawyer who is knowledgeable in residential real estate matters to review the agreements.
PLEASE NOTE, this initial free consultation does not include document review.