Lawyers provide invaluable protection from document errors and title problems which could cost you dearly, as well as provide valuable advice during closing to ensure that your interests are taken into consideration.
Closing can be an intricate and frustrating process for buyers and sellers alike, often including attorneys representing each party involved, their mortgage lender and a title closer.
1. Negotiation
As a seller, your goal should be to secure the best possible price for your home. Negotiation between buyers can involve many back-and-forth exchanges; however there are certain strategies which can make the process less arduous.
Before engaging with buyers, it is essential that you set a realistic bottom line price. Knowing this number allows you to separate emotion from business matters and focus on finding potential buyers without overpricing your property. Doing this also prevents chase-the-highest-price sales pitches that will ultimately turn away potential clients.
One way to speed up the negotiation process is to perform due diligence on potential buyers before accepting offers. You can utilize public records and social media sites such as LinkedIn to gather information on past home purchases, finances and job stability of potential buyers – this information gives a more clear view of their motivation and ability to close quickly on a house quickly. A lawyer may also help devise strategies for handling any contingencies such as financing and home inspections that arise during negotiation processes.
2. Contracts
Real estate contracts and deeds are essential when selling a house. An attorney can assist in identifying any legal issues that must be resolved prior to closing on the property.
Your attorney can also be invaluable if a buyer requires approval for a mortgage, there is an issue pertaining to zoning, engineering or termites which presents itself during a sale, or they want to change what has already been signed off upon.
If you are selling your home using seller financing, your lawyer can assist in creating a contract that sets out details such as final purchase price, payment terms, personal property included and title quality. Furthermore, they can verify whether or not a prospective buyer can secure financing through mortgage institutions and sell your property at some later point; this process is known as “escrow.”
3. Escrow
An impartial third-party will then oversee the deposit of money from the buyer and transfer of ownership documents – the most crucial step of any real estate transaction. Escrow will begin once your offer has been accepted and end when you take possession of your new home!
Your mortgage lender may require that you establish and manage an escrow account to cover annual expenses such as property taxes and homeowner’s insurance premiums, usually added as additional monthly payments into your base monthly payment plan. By paying monthly, rather than all at once, smaller payments can be made toward these large costs each month instead.
Sellers should respond quickly to buyer requests during escrow in order to keep the sale moving forward and avoid its failure. Failing to do so could cause it to collapse altogether.
4. Closing
At closing or settlement, buyers obtain keys and possession of their new property. Sellers must vacate by this date unless there was an agreement in their contract to remain longer; or an exception that was removed from their purchase contract such as home inspection failure or financing problems.
Your attorney will help prepare the final contract and documents necessary for closing, and review any title reports ordered by buyers to ensure that you own a title free from liens or violations.
Your attorney will collaborate with your real estate agent to communicate with and accompany the buyers during home inspection, walk them through the property and ensure they understand its terms as well as negotiate any necessary changes to contracts or negotiate changes if necessary. They will also review final closing figures and prepare a settlement statement outlining all expenses and credits such as real estate commission, mortgage payoff costs, buyer inspection fees and closing costs.