It has been a decade, however, the horrors of the financial crisis are still fresh in everyone’s mind. After the Great Recession disrupted the housing market, there has been only a slight increase in the number of renters to owners. According to the American Community Survey data, a huge shift of homeowners to renters was noticed in 50 major US cities. The shift could be attributed to the fear people still have since the cities that witnessed larger spikes in foreclosure exhibited larger increase in the percentage of renters.
Buying a house is one of the most important decisions that you are going to take in your life because your lifetime savings are involved in it, and even if you are getting it on a mortgage you have to alter your lifestyle and save up to make the payments. Hence, you should be very careful during the purchasing process and it is better to get professional help. Usually, people prefer a real estate agent rather than a real estate lawyer probably because lawyers cannot get the perfect deal. However, the role of real estate lawyer is as crucial as an agent’s because agents do not have the expertise to tackle any legal issues that might crop up during the process.
Although you are not bound legally, here is why you should still consider hiring a real estate lawyer when purchasing a property:
1. They are well-trained
While a real estate agent may help you in some parts of the process, a lawyer will get you through the most crucial part.
In the beginning of the process, a lawyer will help you negotiate the deal. Even though the seller’s lawyer does most of the drafting, your lawyer can review the terms and conditions and adjust them if necessary. Since experienced lawyers go through a number of contracts every day, they can easily anticipate and spot roadblocks that may become an issue at a later stage.
Buying commercial property is riskier and complex than purchasing a house. The search especially is tedious. Once a buyer decides to go through with one property, there is opportunity cost involved. In case the party backs out or the deal-breaking detail pops up, all the effort and money go down the drain. In such situations, lawyers safeguard you against any losses.
2. Buying foreclosed property
Often a tempting opportunity crops up in the market in terms of foreclosed property. A foreclosed property is one that belongs to a bank because the homeowner ran off or voluntarily gave up the property due to the inability of making payments on time. This phenomenon was quite common during the financial crisis when a lot of people just abandoned their houses. While foreclosure spells bad news for the seller, it is a golden opportunity for buyers, especially investors since it is available at cheaper rates.
Buying foreclosed property, however, can be tricky because they might have hidden extra costs in the form of repairs or outstanding tax payments that nullifies the saving that you get on the purchase price. In case you are buying the property before foreclosure, your attorney will help you identify these costs beforehand.
The other way is to acquire it during the auction, which is perhaps the riskiest way because you don’t get a chance to analyze the property for any damages or liens. In this case, you can ask your lawyer to search for the title or any possibilities that the former owner might acquire it back.
3. Title search
A title represents the rights an owner has on the property such as living, selling and leasing. A title deed transfers the rights from the seller to the buyer.
Title search is done to determine the rightful owner of the property. It also highlights any hidden lines that might be against the property. In case you pay with cash and do not conduct any search, you would not get to know of any issues until you try to sell the property. Title searches are open for public and you can do that yourself. However, if you are not thorough with it, you might end up risking your deal.
Lawyers can help you conduct title searches and pinpoint any possible issues that include mortgage payments, divorce decrees, and recorded wills. An attorney can also help you with the title insurance. Unlike typical that is based on future events, title insurance protects you from unknown events, frauds or defects that already exist.
If you are a first-time property buyer, then you are entitled to property tax rebate that will offset your land transfer tax. To be eligible for this rebate, you must not have owned a home before. If you have a spouse, then the same rule applies to them as well. Also, you must start living in it within a specified time period. Usually, people are not aware of their rights. If you hire an attorney, you more likely to be informed about the rebates and a lawyer will also help you with all the necessary paperwork.
Real estate frauds and scams are common and hence you need to take all the precautions before entering a deal and risking huge investments. Hiring an attorney is probably a wise decision. However, lawyer selection should also be done carefully. The first thing you should ask a potential lawyer should be about relevant experience. The next thing you should inquire about is the fee that they charge. Lawyers either charge a flat fee or on an hourly basis. In most cases, the fees covers a few hours with the lawyer presence during the deal closing and paperwork hours.
Hiring a lawyer would add to your cost of buying a home, but it will give you a valuable thing in return, i.e. peace of mind. Also, it would save you from incurring any potential huge losses. Its just a matter of tradeoff, but as it is said one should not be penny wise and pound foolish.
ABOUT THE AUTHOR
Alycia Gordan is a freelance writer who loves to read and write articles on healthcare technology, fitness and lifestyle. She is a tech junkie and divides her time between travel and writing. You can find her on Twitter: @meetalycia.