Real estate is serious business, especially since land is not a renewable resource. Most sellers would want to make the most money in every transaction, while the buyers want the best price for their purchase. The legal system seeks to make sure the compromises from these contrasting interests are judicious and within the boundaries of the law.
In major cities like Denver, having a real estate lawyer is important to oversee your purchase and ensure that all documentation is in order. There are many things to consider, and if you have a lawyer to assist you, they can give these tips as a guide:
Check Any Brokerage Agreements for Vague or Unclear Terms
In many cases, the owner of the property is not available to manage the actual sale. The owners can enter a brokerage agreement for brokers and agents to sell the property, and this is a common practice. However, what lawyers would recommend is to check for vague or unclear terms.
If the seller enters an agreement for multiple listings, they may have to pay for all the listings even if only one would result in an actual transaction. For the buyer’s perspective, it should be clarified that they do not share in any liability that may arise from this.
Clarify Every Detail Before Signing a Purchase Agreement
The Purchase Agreement is the most important document in the entire transaction. That said, the lawyers would want you to make sure every detail is in order before you enter a commitment. Many brokers and agents have standard forms for this, but it should not make you hesitate to seek clarification and add details.
Lawyers have noted some issues that they needed to clarify. Some of these could apply to the property you intend to buy:
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- The legality of any additions or alterations to the property. If there were tenants prior to purchase, was the owner aware of any changes that they did?
- If the buyer has plans to make his own changes, will he assure that the changes will be done lawfully?
- If a buyer hires an engineer or architect to inspect the property and they subsequently find termites, asbestos, lead-based paint, radon, or hazardous waste.
- Aside from the conditions of the property, there is also the issue of the down payment.
- Are there legal consequences if the sale does not close? What will happen to the down payment? Will it be held in escrow?
Consider the Tax Consequences
While a lawyer is not required for the negotiations, there are many things they could help with, specifically the tax consequences of the transaction and the tax declarations of the property.
The seller may need to pay a hefty sum for the transaction, depending on the amount they could sell the property. Lawyers would advise checking on tax provisions, which could be different in other states.
Having a real estate lawyer by your side when performing this huge transaction is the best solution; having these guidelines is the next best thing.
