PLANNING FOR WEALTH AND SECURITY
By Attorneys Jennifer and Jeff Hawkins
 

BUYING AND SELLING YOUR HOME – PART 2

Professional Investment Protection

Business owners hire attorneys to help them establish their businesses and sensible people hire attorneys to prepare their estate plans. Unfortunately, home buyers often rely solely on the advice of non-lawyers to protect them from real estate transaction risks. For most people, a home is a person’s most valuable asset. Why not protect it carefully?

Honest bankers and realtors work hard to protect their clients from bad real estate transactions. Unfortunately, just because a realtor or a banker works with a nationally recognized real estate franchise or a flashy mortgage company, does not mean that the person is willing to give up a commission and pull a customer out of a bad deal. Generally, if a real estate customer does not understand a part of a real estate transaction, he or she should discuss the matter with a reputable attorney before committing to a transaction.

A buyer should become suspicious immediately if anyone says he doesn’t need an attorney for a real estate purchase. Although there may be nothing illegal or unethical underfoot, crooks often make such statements when they want to hide deal problems. 

A buyer should make the purchase conditional upon the buyer’s loan package terms. A conditional purchase agreement will let the buyer out of a deal if the lender can’t give appropriate loan terms to the buyer. For example, the purchase agreement conditions could require 100% financing at 7.5% for 30 years with total closing and financial service charges not to exceed 3% of the purchase price. A reputable realtor will usually insist on conditions for a buyer in a mortgage loan-financed deal. An attorney should double check the conditions.

Problems arise sometimes when loan terms change at the last minute for a buyer. The mortgage industry is plagued with some sloppy mortgage brokers that promise better loan terms than they can deliver. The buyer should always have the loan package previewed by an attorney before closing.

A buyer should never be forced to close a bad deal. If the purchase agreement contains appropriate conditions for the buyer, a closing can be postponed until loan problems are solved. If anyone tells a buyer that he must close on the particular day or be sued, the buyer should speak with an attorney before signing anything. Too many buyers are pressured into closing deals that can bankrupt them.

Homeownership offers security and comfort. Protecting your investment requires spending the time to understand every aspect of the home buying experience. A little bit of care and attention can be the difference between a home being a man’s castle or his prison.

THIS ARTICLE IS NOT LEGAL ADVICE. ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.

© 2004 by HAWKINS LAW PC, Estate, Trust & Business Attorneys. All rights reserved.