The Importance of Using a Lawyer in Real Estate Transactions, Part 2
Real estate transactions in Florida are governed by both state and federal laws and involve many parties, from the buyer and seller to the title insurance company to the lending institution providing a mortgage. Buying or selling a house is often the biggest transaction a person will ever make, and getting it right is essential. A dedicated real estate lawyer is an invaluable resource for anyone considering buying or selling real estate.
Taxes, Mortgages, and Other Issues
An important function served by a real estate attorney is explaining issues that arise in a real estate transaction. For example, a lawyer can explain the tax consequences of the transaction, which can be enormous. Anyone selling a house hopes to make a profit, but the larger the profit, the more significant the tax consequences may be. An attorney can make sure that the seller understands these consequences and the best way to deal with tax issues. Attorneys can also explain tax provisions that, in some circumstances, may let the seller exclude capital gains resulting from the sale
Federal law provides that a person has the right to hire his or her own attorney for mortgage negotiations. A real estate lawyer can explain to the buyer the different varieties of mortgage and advise him or her on which type would best fit the circumstances. An attorney may also examine loan documents and ensure that the buyer understands the provisions of the documents. The attorney will also know the questions to ask regarding problems with the house, such as mold or structural defects, that must be disclosed.
An important step in any real estate transaction is the title search, which checks to ensure that no one else has a claim to the property. An attorney can help the buyer review the results of the search.
Title insurance protects the buyer in the event that a third party has a claim to the property. Third party claims may include mortgages, mechanic’s liens for work done on the house, tax liens, rights of way, covenants restricting the use of the land, or easements, meaning the right of another party to use the property (e.g. the right to put power lines on the property). If there is a problem with the title and the new owner is uninsured, he or she may have to pay off a previous owner’s debt or may even lose the property. Title insurance protects against this.
Title insurance may be obtained from a title insurance company. A real estate attorney may write a client’s title insurance policy. This means that the buyer can tailor the policy to his or her specific needs and make sure that all issues are covered.
Though there is no requirement in Florida that an attorney conduct the closing, closing is the most important stage in a real estate transaction and so the representation of an attorney at this stage is key. At closing, title passes to the buyer, and the purchase price is paid to the seller. Attorneys can help their clients understand closing costs and can help to ensure that the closing goes smoothly. If there are any last-minute disputes, it is essential to be represented.
Real estate transactions involve large amounts of money and are significant in other ways as well. If you are considering buying or selling a house, please contact Boca Raton Law Offices of Larry E. Bray for an initial consultation.