Whether you are purchasing your first home or you’re an old hand at real estate, an experienced real estate attorney is your best guide through your transaction.
And unfortunately, the current real estate market is beset with problems. I also represent property owners in modifications, short sales and other workout options. I am well versed in the current alphabet soup of foreclosure prevention programs, such as HAMP, HAFA, SSA agreements and the like.
If you would like to read about some of these programs, please go to my recommended links page.
You may be a first time home buyer, or maybe you’re an old hand at real estate. Either way, here’s some basic information about your real estate purchase, real estate sale or refinance you might find helpful.
The process is just too complicated and requires too much expertise to handle on your own. In some parts of the country, closings are handled by escrow companies or title companies, but that’s not the case with Connecticut real estate closings. The seller and buyer each have their own attorney, although usually the same attorney does the work for the buyer and the buyer’s bank. It is usually not appropriate for the same attorney to handle to transaction for both seller and buyer.
Your real estate agent and your attorney have very different roles in the transaction, but they should work together closely. Your agent will help you make or accept an offer and form a contract using a form approved by a Board of Realtors, but agents are not allowed to practice law. Most contracts have an attorney review clause, so your lawyer can have a few days to review it, and help with any drafting needs. Your agent will help you manage the inspections, and if there are issues, your attorney may be called upon to draft language reflecting their resolution. Agents typically monitor contract deadlines and seek extensions if needed. If you are buying, your attorney will obtain a title search and review it to see if there are problems and what liens need to be released. Buyer’s and seller’s attorneys work together to make sure all appropriate documentation is prepared for the closing, and reach agreement on closing figures. If you are selling, your attorney will obtain releases of mortgages
Aside from establishing the price, deposit, closing date, etc. your contract has many provisions in it for the protection of both sides. It is always a good idea to review the contract with your attorney and not make any assumptions. If you are buying, it is very important to be aware of the contingencies put in the contract for your protection. The inspection contingency gives you the right to inspect the property using a licensed professional, and do appropriate testing for things like radon or lead paint. The mortgage contingency says that you need to get mortgage financing to complete the purchase, and gives you the right to back out and get your deposit back if you are unable to. However, you must comply with the deadlines and other requirements of these clauses to take advantage of these protections, or you will lose them.
Under Connecticut real estate law, the contract closing date is best thought of as a target, not something carved in stone. That doesn’t mean you can ignore it, but it does mean that it’s not 100% certain that the closing will be on that date. Buyers and their lawyers are at the mercy of that bank to finalize the closing date: without “clear to close” from the lender, the closing can’t occur. Lenders issue commitment letters that contain conditions, and until all those conditions are satisfied, your lender won’t give your clear to close.
Title insurance provides you with protection that you are getting “marketable title” to your property. If you are getting a mortgage, your bank will require that you purchase a “mortgagee” policy that only protects the bank. The cost of adding an “owner’s” policy to protect you is usually only nominally more. There are many defects to a real estate title that may not appear in a title search that title insurance protects you against. Also, mistakes can be made in a title search. The cost of straightening out a title problem is always many, many times greater than the cost of the insurance.
If you are getting a mortgage, your bank will give you a Good Faith Estimate or GFE right after you apply. This will give you a worst case scenario of your closing costs, because by law the bank can’t increase its fees from the GFE, and will conservatively estimate those costs that are subject to increase. The reason it takes until what seems like the “last minute” to get your final closing figure is because many figures have to be calculated based on the day of the closing. You should have a pretty good idea from the GFE, but the numbers won’t be finalized until a day or two before the closing.