FSBO real estate question (mortgage, lawyer, lender)

[LilCabinGirl]

Does TN use title companies to buy real estate or attorneys? In NJ we used attorneys (northern NJ anyway) and in Florida we used a title company. How does it work here?

Thanks!

[Eat]

We recently did a property swap that involved three different parties. It was basically a boundary realignment. No money changed hands and no contract was involved. We did it at a title company using quit claim deeds. There was a survey first.

We also have a potential buyer for some other property we have for sale, who would like to use a title company. He claims to have bought and sold here using nothing but the title company, but we will insist on using a real estate attorney. If money changes hands, a contract is required, and there are transfer tax issues involved, complete with avoidance penalties, according to the title folks we talked to. Anyway, It is foolish not to use a real estate attorney when large sums of money are involved. You always have the right to have any contract run by your attorney.

[mbmouse]

Either, your choice, Title Co. or Real Estate attorney. I use a Title Co that is owned and backed by a Real Estate attorney, best of both worlds for accuracy and issues that might arise.

[Barking Spider]

Most title companies I know have an atty. on staff.
With FSBO's you want to be sure to have:
An appraiser that is working for you.
A termite inspector that you hire.
A home inspector.

[Eat]

The attorney at the title company is their attorney. He or she is not your attorney. You do get to pay for their attorney, though.

[mbmouse]

Originally Posted by Eat

The attorney at the title company is their attorney. He or she is not your attorney. You do get to pay for their attorney, though.

Not when you are the buyer as you pay the closing fees associated with the purchase. Such as to write up the deed, pay off sellers mortgage, recording fees, etc. If you are paying the bill at closing to that attorney or title agent, you are their client so it is your attorney.

[Whataride]

2nd what MB said...If you hire a real estate attorney, you will pay a lot more and not have any gain. Just make sure that the title search is done correctly and that you are covered by title insurance. If there is a claim, or if something is done wrong the title insurance will cover you. If there is a mistake by the title company, they have E&O insurance to cover it as well. some people feel more confortable with an attorney in their corner, but make sure that you have access to them before and after - typically not.

[Eat]

Originally Posted by mbmouse

Not when you are the buyer as you pay the closing fees associated with the purchase. Such as to write up the deed, pay off sellers mortgage, recording fees, etc. If you are paying the bill at closing to that attorney or title agent, you are their client so it is your attorney.

No, he is not your attorney, and he does not advise you. You are the title company's client. They have an attorney. He represents them. He cannot represent both you and the title company, since there would be a conflict of interest.

To get competent legal advice in a real estate transaction, you must directly engage a real estate attorney before the contract is signed. Once the title company or other closing agent is preparing the deeds, it is too late to be getting legal advice. The only purpose the title company's attorney serves is make the sure the closing is done in accordance with the law and the terms of the contract. By then, it is too late if you have signed a contract that is not in your best interests. It should have been reviewed by your own attorney before it went to closing.

[Whataride]

back to the original question - In the state of Tennessee, an attorney is not required to close a transaction. If you are using an attorney to close a transaction, the attorney closing the transaction will either own a title company or be the retained attorney for a title company. It is your decision as to where you close and to what extent you want to make sure that you are covered. I know a number of lawyers that don't know the first thing concerning real estate law. However, you can go to any of 1000s of legal advise sites on the internet, or go to the library, or call a real estate agent to get you a copy of a contract, or ask for one (I'm sure I have one floating around somewhere) and close the transaction. If you are doing a 1031 tax free exchange, buying a peice of commercial property, etc - get an attorney to look over your documents.

If you are buying a single family residence from another party:

• get a title search and exam from a title company
• make sure that you have the exact amount of money that will transact
• have in writing the date the other party will have vacated the premises and you can take posession/move in
• get an appraisal to make sure the property is worth what you are paying
• get a pest inspection
• have a home inspection done
• do a walk through prior to signing the deed at closing.

All of these are covered in a standard real estate sales contract and if not, add it to it to make sure that if any of these fail, you can void the contract.

Have all parties sign the contract and initial any changes. And I didn't charge a penny.

[Eat]

Originally Posted by Whataride

And I didn't charge a penny.

You get what you pay for.

You also didn't mention easements, encroachments, or surveys, not to mention mineral and timber rights, roll back taxes, and the difference between lenders' and owners' title policies.

Even the real estate agents don't know all this stuff. Title companies can't or won't advise you on all these matters, either