When completing a real estate transaction there’s a lot of paperwork involved. The contract between a buyer and seller has many nuances and there’s room for error. Sometimes these errors may lead to legal trouble.
Galaxy Title & Escrow can help prepare you for and help navigate real estate legal issues that may occur during this process. Read more to learn about specific issues that may arise for you as the buyer or seller.
Real Estate Legal Issues For Buyers
Buying a house is a huge decision. On top of all the factors of your preferences for a home, you should also consider what legal issues may affect your decision to place a bid on a property. Some common real estate legal issues that effect buyers include:
The title of a property is the legal ownership of a house or land. An issue may occur if there’s a claim or a lien on the property. This means that there is unpaid debt on the property, such as taxes, fines, or mortgages. As the buyer you do not want to become responsible for these debts when you acquire a piece of real estate. But claims and liens can also prevent a house from being sold until these debts are paid.
When you use our service to close on a home, we perform a title search to identify the rightful owner of the property and ensure there are no liens on the property.
When you buy a house, there’s a contract between you and the seller. This contract includes contingency clauses on financing, inspections, closing costs, and the closing date. As a buyer, you may make an agreement with the seller that they perform any maintenance for the home before you move in based on problems found during the home inspection. But a legal issue may occur if you or the seller do not honor any part of the contract. That’s why it’s important to understand all the commitments made in the contract.
Financing issues that may occur include failing to meet the conditions of the loan or being unable to obtain financing. The issue may be the fault of the lender or of you as the buyer. For some loans, there are specifications that the property you’re buying must meet. For example, an FHA loan requires the home you buy to be “move-in ready”. Loans also have requirements for credit scores, which you must maintain throughout the loan process.
A home inspection is recommended before closing on a property. During an inspection, you may discover defects or hazards that the seller didn’t disclose about the property. In some cases, this may require legal action if it’s discovered that the condition of the property or home was hidden.
Real Estate Legal Issues For Sellers
When creating a contract with the buyer it’s important to disclose any issues with the house or the property that you know of. For example, if the roof leaks or the foundation of the home is cracked, you should share this with the buyer. Failure to disclose defects such as this can result in litigation.
You must honor all the agreements made in the contract with the buyer. This includes fixing any issues with the house and leaving behind furniture or appliances if you had originally included them in the offer. Another contract agreement to be aware of is the move-in date, by which you will have to ensure you have vacated the house with your belongings.
Closing can bring about legal issues if there’s a problem with the title of the house. Errors in the transfer of ownership, property line disputes, or issues with liens can cause problems when you try to close on a sale. When preparing to sell your home you can have professionals look into these matters to prepare your house for sale.
The threat of litigation is another common legal issue a seller may encounter. Allegations of fraud or breaching the contract could put you into some legal trouble. The buyer may also lose financing or misrepresent themselves, in which case you may need to take legal action to protect yourself.
Why Should Buyers and Sellers Be Aware of Legal Issues?
It’s important for buyers and sellers to be informed about the real estate transaction. Being aware of these legal issues that may occur, helps you protect yourself and ensure that you and your agent are thorough when preparing your home for sale or when buying a home. Being informed can save you time and money.
How Galaxy Title & Escrow Can Help!
After you found your dream home or are in contract with a buyer, you should find a closing and escrow service to help with the real estate transaction. Here are ways our team at Galaxy Title & Escrow can help you:
We offer closing and escrow services for any real estate transaction in Southern Florida, in and around the Fort Lauderdale area. Our escrow service includes the protection of your funds as either the buyer or seller. We hold any payments for inspection, deposits, or other fees involved in closing on a house until the sale is final.
We also protect closing costs which can be large sums of money. By giving a third party these funds to release only when appropriate, you can ensure that the other party in the agreement honors their end of the contract. Other benefits of using a closed escrow service include:
- Reduced risk of fraudulence
- Protection of buyer’s money
- Protection of sellers’ identity
- Quick closing process
We also offer title insurance which offers protection from the legal issues that may occur involving the ownership of the property. Many lenders in Florida require title insurance, though it’s not a legal requirement to have it in Florida. It’s a good idea to buy title insurance, whether your lender requires it or not.
This insurance can protect you from fraud and forgery if, for example, a previous owner forged a signature on a title deed. If there’s litigation against you involving an issue with the title, the title company will pay to defend your best interest and pay to fix problems that are found after you purchase the property.
Our team will be a great resource for you when you’re either buying or selling a home. Our licensed attorney can answer any questions you have concerning legal matters. We can also help navigate real estate legal issues that may arise during the transaction.
Contact Us Today!
Galaxy Title & Escrow is here to help you! We coordinate with mortgage lenders, sellers, buyers, and real estate agents to ensure all of the necessary paperwork is complete and that there will be no issues when closing on a house in South Florida. Contact us today so we can answer your questions and guarantee a stress-free transaction process.
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Mitchell has been a licensed attorney since 2014 and has practiced in both the transactional and litigation fields of law. His experience allows him to approach every transaction with a depth of knowledge and practical experience most attorneys do not possess. Mitchell prides himself on providing top notch service to his clients.