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I'm looking at buying a fixer upper on contract. The seller seems to be a broker and licensed realtor who buys a lot of houses on tax foreclosure and resells them below assessed value. I have a copy of the contract for the purchase and I'm wondering what's next. I'm planning on paying for an inspection before signing, but how important is it to pay a real estate attorney to review the contract? I assume the one I've been provided is cookie cutter used with the sellers contract deals most of the time. I'd rather not spend the money if it's not really worth it, and I'm not sure how much it'll cost, but I've heard varying prices around $200-$800. I'd rather put the money into repairs for the house.
Also, what does it generally cost for a title search? I assume this is perhaps more important than the attorney reviewing the contract. The title search is not something the attorney performs, from what I understand - is this correct?
Your assumption may be correct, but the devil is in the details. And how the standard form is completed is as important as the verbiage in the standard form.
Yes, you should have an attorney review it rather than assume it is all right because it is a standard form.
Too often the value of having an agent or having an attorney is revealed to the client after the wheels are off the wagon, and that is usually more expensive than having a professional on your side at the start.
The standard forms are standard forms. Each Realtors board has their own copyrighted set of forms. The boiler plate is the same in all of them, in any board territory.
The devil is in the details, and the details are the parts of the forms that the seller fills in. There is an art to reading that, and after 5 purchases in a year I think I've advanced from novice to one step above that.
I feel comfortable that I could do a deal without representation now, particularly if the seller would send me blank forms as I need them, but a novice should have either a Realtor or an attorney/lawyer who is experienced in real estate to look them over. Or a real estate agent who is not a NAR member I guess.
You would be well-advised to retain the services of an experienced real estate attorney. This is especially true when you're dealing with an experienced Seller such as a broker, attorney, real estate developer, etc. It's easy for them to slant the contract in their favor. It's also important to have professional assistance due to the myriad of problems which can arise under a Land Contract (aka Contract for Deed). It's is MUCH cheaper to pay an attorney to avoid problems than it is to try to correct them later on.
Some of the biggest problems people face with Land Contracts deal with the title. Whereas title issues are usually cleared up in a normal sale, in a sale where the Deed does not pass until the contract is paid off there can be lingering problems with the title. (That this may have been a tax foreclosure is another red flag--you need to make sure that the title is clear.) You need to do full due diligence going into such a sale--and that would include having the Seller provide a title insurance policy (or paying for one yourself if it's customary for the purchaser to do so in your area). Your attorney may also require that a Warranty Deed be executed at the time of the contract, with the Deed being placed into escrow until the contract is paid off.
The actual language of a standard form may be the least you need to worry about--but it still needs to be filled in with terms and conditions which are fair.
Some of the biggest problems people face with Land Contracts deal with the title. Whereas title issues are usually cleared up in a normal sale, in a sale where the Deed does not pass until the contract is paid off there can be lingering problems with the title. (That this may have been a tax foreclosure is another red flag--you need to make sure that the title is clear.)
Quote:
Originally Posted by Okey Dokie
I would find out exactly what rights the original owners of these tax foreclosures have. Can they redeem them and get them back?
If in doubt, always consult legal council. I have worked with many buyers, and none of them have retained the services. Luckily, none of them have needed it (not as of yet). However, I always point out the language in the contract that states they should retain legal council if they have any questions in regards to the language in the contract.
Remember, your agent cannot give you legal advice in regards to the contract. It is their job to "fill in the blanks".
In some states, forclosed owners have special rights in which they can redeem their property within a certain period of time. I would go ahead and retain council.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Quote:
Originally Posted by Lovehound
Doesn't the title company verify clear title? Isn't there title insurance?
We often don't appreciate how CA laws are different than in other states. This looks like a perfect example of how much easier (harder on disclosures) it is elsewhere.
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Let's do the math
