Purchasing or selling your home is a complex procedure, entailing tons of paperwork and red tape. The process requires a good working knowledge of real estate laws and contracts in order to make sure the purchase goes through without error and that all parties are aware of their rights and responsibilities.
The Importance of Having an Attorney at Closing
Why do you need a real estate attorney for the purchase or sale of your home? An attorney will be able to guide you through the complex process of buying or selling a home, provide a general timeline and give you tips when negotiating contract details. Your attorney will help you avoid making any mistakes or signing something that you don’t thoroughly understand, or agreeing to terms that you probably should not be agreeing to.
When buying a home, there are often issues that arise with the title and your mortgage documents. Other concerns might pop up too, such as renovations that were done without permits, problems with inspections and improperly calculated taxes.
A local real estate closing attorney will be well-versed in the real estate laws in the Chicago area and will be able to advise you quickly on what steps to take should issues arise. You also will have someone there to review all contracts to make sure you aren’t agreeing to something that isn’t in your best interests.
Why You Need an Attorney for Commercial Real Estate Closings
Lenders and banks are not in the business of protecting you. In fact, banks are in the business of taking as much from you as they can. The terms banks impose on borrowers, especially commercial borrowers, are sometimes illegal and often overly oppressive. It’s unfortunate, but most real estate closing attorneys don’t realize the horrible terms they are allowing their clients to agree to when purchasing real estate. Even worse, is that most real estate closing attorneys don’t realize that some of these terms are negotiable.
Protecting clients is more than just reading and explaining the terms of an agreement. Your attorney should be looking for and identifying dangerous terms in the mortgage and notes that banks ask you to sign and then push back at the bank to remove these dangerous provisions.
Most attorneys incorrectly believe that the bank has all the power. That’s not true, banks are as much interested in issuing you the loan as you are in getting the loan. Plus both the banks and the bank’s attorneys already know that the terms they are slipping past your attorney are oppressive. In fact banks attorneys have admitted to me several times, that they would never sign these loan documents personally, and wonder why borrowers sign these documents.
Even if the bank is refusing to change the terms, there are many things that can be done as part of the deal to limit and reduce the impact that these terms can have on you.
Most of the commercial borrowers we represent in foreclosure or are scrambling to save their properties never missed a payment. All the bank needs is one variable that violates a small provision in the agreement and you can lose everything.
A good real estate attorney understands the legal aspect of your transaction, as well as the business dynamics of the deal and will do what it takes to help you close the deal in your favor.
Real estate closings are mostly technical, however how to protect you is entirely expertise and art. After you sign it’s way too late.
If your selling your property your attorney should help you consider the IRS tax ramifications behind selling your property. Setting up a 1031 exchange can help you avoid or delay the tax liability on the capital gains from the sale.
What a Real Estate Closing Attorney Does
When you secure an attorney for closing, the duties the attorney performs depend upon whether you are buying, selling, or exchanging property:
- Buying – if you are buying a home, your attorney will help you understand the contract; explain any details about acquiring the title; make sure there are no liens on the property that would interfere with your purchase; prepare the necessary legal paperwork; work with your bank and modify mortgage terms if needed; make sure all proper adjustments are made, e.g., taxes and utilities paid; acquire title insurance protection for unforeseen title issues; and review all final papers at the actual closing; potentially expose any hidden construction work or liabilities for failure of the prior attorney to obtain permits, which all transfer over to you as the new owner.
- Selling – if you are selling your home, your attorney will prepare or review the purchase agreement; negotiate terms; prepare the deed; help fix any title issues that arise; insure that there are no continuing liabilities on the property post closing; arrange for transfer of funds and deposits; and attend closing to review all papers before you sign.
- Exchanging – property that is exchanged falls into a whole different set of rules. When exchanging property, taxpayers can face a capital gain tax that exceeds their property gain by up to 30%. But, an experienced lawyer will assess if you qualify for a 1031 Exchange, and help you to completely avoid issues with capital gain tax, saving you money.
Let a Lawyer Look Over Your Papers before You Sign
The sale of a home is an enormous transaction. Hiring an attorney is essentially cost-effective insurance for your peace of mind. It’s particularly important to consult an attorney if:
- the sale of the home is rather hurried
- you don’t fully understand the documents, insurance or taxes
- you’re having a problem with inspections
- the parties have begun to argue over the terms of the contract or
- you have a gut instinct telling you that your real estate agent isn’t looking out for your best interests.
The bank is looking to take your interests. Ask for an Attorney to protect your assets.
Our Real Estate Firm in Chicago Can Assist Your Closing
Our attorneys at EV Has, LLC have a deep knowledge of Illinois real estate law and can assist you during any phase of the closing of your home, whether you are the buyer or the seller.
