I think an attorney is important, even in a residential transaction, for a number of reasons. I don’t know if this is going to be in order of most important to least important, but the first thing that comes to mind is, it’s a lot of money!
For most people, buying a home, or even just a residential investment home, it’s one of their bigger debt obligations, for most people. Or if they’re not getting a loan, it’s one of their biggest money commitments. So it’s a lot of money. There are roles for multiple professions. There’s a role a real estate agent (or a broker), and there’s a role for an attorney. And too often, those lines sort of blur. I’m not an expert at valuing one home versus another. So I’ll tell my clients, “That’s really a question for an appraiser or for your realtor. You know, your realtor is probably in that market, has plenty of experience, and can pull up comps, [and] can help you sort of put a value on a property. That’s not my expertise.”
In similar fashion, there are some things that brokers should probably say, and typically do (real estate agents), “That’s for an attorney to answer. That’s a question for an attorney.”
‘So, how can an attorney help in a residential real estate transaction?’
Like I said before, there can be all kinds of issues. There’s all kinds of properties, there’s all kinds of transactions, deals. But right off the top of my head, I’d say, that you’re typically going to start with a contract. Once there’s a contract in place, whether you’re the buyer or the seller, between the time of signing the contract and the actual closing, there’s going to be due diligence and questions to answer, there can be amendments or changes to the contract the deal can involve. And then, at the closing, there are documents that are signed that have great impact. So you need to understand what’s in those documents and make sure that they’re prepared correctly.
(And here’s where maybe we can break it into different videos…)
‘Residential Real Estate Contracts.’
There are forms out there that people use, often, that are pretty good. And I like those forms. They’re not always perfect. There are areas in these form contracts that need to be considered, where the client needs to make a decision whether they want the contract to read how it is in the form. And the client needs to understand the alternatives, rather than being forced into one strict form. Then of course, a lot of times the deal terms don’t fit squarely within that form, so people want to add to it. That’s where you can really come into some issues. We see a lot of disputes, and even litigation, when something’s added to a form, and the language just doesn’t quite identify the intent of the parties. So, reviewing the contract I think is important.
There are roles for multiple professions. There’s a role a real estate agent (or a broker), and there’s a role for an attorney. And too often, those lines sort of blur.
Some people may say, “Hey, I do this. I know what’s in the contract. I don’t need you to do that.” If that’s the case, that’s fine. But I think it’s a discussion that people should have before they sign a contract.
And on a residential deal, we try and keep the price to help a client be aware of the issues and to help a client get into a good contract very reasonable, very affordable. Especially in comparison to the amount of money that’s going into property or that’s coming out of the property through a sale. So, for a residential transaction, I think [in] reviewing the contract, an attorney can play a critical role.
– Spencer R. Munns is an experienced real estate attorney and shareholder with the law firm of Bogin, Munns, & Munns, a full service law firm with offices in Orlando, Clermont, Kissimmee, Orange City, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida. He welcomes questions and comments regarding the above and can be reached at [email protected]
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