What is the attorney review period for a real estate transaction?

What is the attorney review period for a real estate transaction?

When you are buying real estate you have to sign a contract. Once the contract is signed by the seller time becomes of the essence. People believe that once you sign a real estate contract, everything in the contract is final. That is not true. Although I tell my clients to let me know before they sign a contact, the fact of the matter is, once you sign a real estate contract an attorney has five business days for a “review period” and to propose modifications. During the review period the attorney reviews the contract, makes sure all the appropriate signatures and initials are in the proper places, and verifies the contract states what was intended. If the contract does not state what you wanted, it may be cancelled. Also, during this time period, you (the buyer) should get an inspection on the real estate. Once we have the inspection report, we will review the inspection and use that report to ask the seller to fix any items that are covered. If you are unable to get an inspector out within five days, I am able to ask for an extension of the review period. As long as you have something scheduled, asking for an extension should not be a problem. In summary, once you sign a real estate contract you still have time to change the contract if you are within the attorney review period. When considering whether to sign a contract, please get a copy over to my office as soon as possible....
What’s the difference between an owner’s title policy and a lender’s title policy?

What’s the difference between an owner’s title policy and a lender’s title policy?

As we sit down on closing day to go through all of your real estate documents, you will notice on your closing statement that you are being charged for one of two different types of title insurance. Depending on whether you are the seller or the buyer you will be charged either owner’s title insurance or lender’s title insurance (presuming it is not a cash transaction). What is the difference and why do you have to pay for them? Owner’s title insurance, often called an Owner’s policy, is a one time flat fee that the seller pays to the title insurance company for the benefit of the buyer. The title company is where the closing takes place. Although it is only a one-time payment, the insurance policy actually lasts as long as the buyer owns the property. The buyer will receive the owner’s title insurance policy for the amount of the sale price after the closing and it will list all of the benefits and restrictions of the policy. As a buyer you should keep this document in a safe place. This insurance policy is to protect you from a third party later claiming some type of interest in the property. Should this happen, contact a real estate attorney immediately to file a claim for you against your title insurance policy. Lender’s title insurance, also known as a loan policy, is based on the actual dollar amount on the loan. As a buyer, your lender will require you purchase a title insurance policy to protect the lender from potential claims of prior third parties that may be senior to...
What is a mechanic lien on a house?

What is a mechanic lien on a house?

If you are trying to buy or sell a house that has a mechanic lien on the property, it must be taken care of (released by the lien holder) before any change of ownership can take place. In real estate terms, a mechanic lien, or a construction lien, is a security interest in the title of property. If a subcontractor, architect, plumber, etc. does work on a piece of property and were never paid, they will file a lien in the county where the property is located against the particular property. One important thing to know about mechanic liens: If you hire a general contractor to do work on your house and the general contractor hired a subcontractor and did not pay him for the job performed, the subcontractor can file a lien against your property and the home owner will be responsible for paying it before it will be released. Some tips to avoid mechanic liens Keep all receipts and paperwork from the contractor Get a lien waiver Pay with joint checks Pay subcontractors yourself The best defense against a lien on your house is to avoid it at all costs. However, if you find yourself in a situation where you need a lien released, please contact us to help you determine the best course of action for your...
How is money disbursed at a real estate closing?

How is money disbursed at a real estate closing?

Two common questions I get from my real estate clients who are selling property are: how and when do I get my money? In Illinois we make sure all parties to the transaction (buyer & seller) are safely covered with title insurance.   Title insurance protects the homebuyer and his lender from the possibility that the seller doesn’t – or previous sellers didn’t – have free and clear ownership of the property and are thus unable to transfer full title ownership to you. In order to obtain title insurance you must have your closing at a title insurance agency office where the policy is provided. The title insurance company has an interest in making sure the closing is handled correctly. Therefore, the title insurance agency conducts the closing. One of the benefits of using the title insurance company is that the title insurance agency acts as the “middle man” for the transaction and collects all of the monies from the buyer and lender. Once all of the money has cleared, the title company then disburses checks to all parties that need to be paid to complete the deal. In most transactions, checks will be given to the real estate agents, real estate attorneys, and the seller’s lender and/or lien holders. Any remaining proceeds are disbursed directly to the...
Can I get my earnest money back if I cancel my real estate contract?

Can I get my earnest money back if I cancel my real estate contract?

An earnest money deposit is a money deposit put down by the buyer in a real estate transaction that shows the seller the buyer is serious about purchasing the property. When a buyer signs a contract, they put down earnest money, anywhere in the range of $1000 to upwards of $50,000, to show how serious they are about purchasing the real estate.   The earnest money is held by a third party, (typically a lawyer or real estate agent), until the day of the closing.   When the closing day comes, the funds are released toward the buyer’s down payment.   However, what happens to the money if the deal is terminated? Basically, you have to know what the fine print of the contract you signed says. Usually, if the seller is the one that cancels the deal, there are no questions asked and the money is returned to the buyer. However, if you are the buyer and want to cancel the contract, your reason why must comply with one of two conditions in the contract for you too be able to get your money back. Either you cannot obtain financing according to the terms laid out in the financing contingency and you send a cancellation notice before the expiration of the financing contingency term; or you obtain an inspection by a certified inspector, find that one of the major components of the real estate is not functioning for its purpose, and you send a cancellation notice before the expiration of the term in the inspection paragraph of the contract.   It is very important that your attorney stay on...
What should I ask a real estate attorney before hiring them?

What should I ask a real estate attorney before hiring them?

Hiring an attorney should never be taken lightly and just because someone has a license to practice law doesn’t mean they are the right attorney for your situation.   Unfortunately, real estate, along with estate planning, are areas of practice where a lot of attorneys try to handle a transaction without having a lot of experience in that particular area of the law. If I were to ever hire an attorney I would be certain that the attorney I am hiring spends most of their time practicing in that area of law. You wouldn’t go to a foot doctor if you had a heart problem, would you?   So, how do you know if you are choosing the right attorney for your problem? Here are a few questions to consider when you are looking to hire a real estate attorney: How many transactions like mine have you handled? What is your billing process? Who else will be working on my transaction? Are you up to date on all the local laws and requirements?   If you are looking for a new real estate attorney please contact me and I can answer any questions you might have. And don’t worry, I limit my practice to only three areas of law: real estate, estate planning, and probate. Trust me, if I do not feel that I would be the best attorney for your situation, I have numerous referral sources that can help. Click here to contact...