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Not So Fast! Understanding th R the Reall E Estate t t P Pro's ' Competing Interests in the Residential Real Estate Transaction

Real Estate and Finance Attorney David Soble reveals how real estate advisers often put their interests before their clients and how to p preserve the integrity g y of the transaction.

ď śAs if purchasing or refinancing a home wasn'tt stressful enough wasn enough, the key professional players in a real estate transaction don't necessarily y have their client's best interest in mind, according to real estate and finance attorney David Soble off Proven Resource: contractual limitations, professional conflicts of interest and lack of proper professional interest, guidance are prevalent throughout the real estate transaction.

ď śAn attorney and real estate broker for 23years Soble has been involved with 23years, thousands of residential and commercial real estate sales and refinances. He has represented multi-billion dollar banks and national finance companies as well as helping small business owners and consumers. ď śH ď śHere are 7 thi things purchasers h need d to t know about the real estate process that are not frequently discussed:

ď ś1. Home Inspectors. First. never waive the right to a home inspection inspection. Never. Never Second, purchasers should select their own home inspector. p Real estate agents g sell real estate every day, and may have a stable of these home pros, and therein lies the potential conflict f off interest that compromises the integrity of the inspection in favor of "getting getting a deal done". Third, avoid blurring the distinction between an appraisal and an inspection.

ď śAn appraisal is a professional opinion as to the value of the subject property. property That's it. While the appraiser may note deficiencies in the p property's p y condition,, it cannot ever be mistaken for a home inspection. ď śAn inspection should consist of a thorough examination of a home's mechanical and structural condition.

ď śFinally,a home inspector's liability is often limited to the cost of the inspection itself, and no more. So an inspector who fails to note a leaky y roof may y only y be liable for $300, the average cost of an inspection. ď śTherefore, if a specific item is questionable, call on a licensed contractor to delve further and give you peace of mind. mind

ď ś2. Real Estate Agents. It is not surprising that many legal issues involved with real estate transactions involve the real estate agent g as they y are the center of the transaction. But understand an agent's limitations. ď śWork with a buyer's agent or seller's real estate agent, but not both. Known as a "d l agent", "dual t" th the reall estate t t agentt is i responsible for representing both parties.

ď śThere is absolutely no way that a professional can represent the competing interest of a buyer and seller. Purchasers can remove the p potential for conflict of interest by hiring their own buyer's agent. ď śFinally, understand that a seller's agent has their professional duty to the seller. N t the Not th buyer. b So S tread t d carefully. f ll Purchasers should not disclose information to a seller seller's s agent that they don't want the seller to know.

ď ś3. Lending Officers. Residential lenders are required to disclose all of the third party vendors, that they intend to use in a transaction. ď śAppraisers and title companies are third party p y vendors and loan applicants pp are not legally required to use them. Find a licensed appraiser or title company b f before you apply l for f your mortgage. t

ď śAlso, get "pre-approved" by a lender before going house hunting hunting. Purchasers should avoid using the real estate agent's lender referral unless they y are having g difficulty securing a mortgage on their own. ď śLoan officers often rely on referrals from agents and they can, and will discuss your finances fi and d credit dit with ith the th agent. t

ď ś4. Insurance Agents. Buying a home requires home insurance. insurance After closing on the property, keep the insurance agent informed of significant g changes g p planned for the home. g any y material structural ď śWhen making changes that involves wiring or plumbing, or any other change that requires i pulling lli ab building ildi permit, it d don't 't skimp, pull the permit.

ď śNo matter how handy a homeowner may be if there is a fire, be, fire flood or other home disaster, the insurance company could deny y your y claim because your y improvements were done without a permit. This is true even when homeowner repairs were not the direct cause of a structural problem.

ď ś5. Title Agents. It is standard in the real estate industry to secure title insurance with a home sale or refinance. In a sale, the seller customarily y pays p y for an owner's policy for the buyer equal to the purchase price. ď śIf the buyer financed the purchase, then a lender's policy in the amount of the mortgage t is i paid id ffor by b the th buyer. b

ď śReview the title policy. Title insurance has exceptions and exclusions which is based upon what is revealed in the public real estate records. A buyer y needs to know these exceptions as it could impede their ability to sell their property in the future. ď śMoreover, when a buyer purchases a h home below b l market k t value, l they th should h ld purchase title insurance equal to the home value, value not the purchase price. price

ď śFor example, a buyer who purchases a home for $75 $75,000 000 and valued at $100,000, would be exposed to $25000 in the event of a title claim. No one is ever precluded from purchasing more title coverage. ď śFinally, If there is a title issue, consult with a real estate attorney as no other reall estate t t professional f i l is i qualified lifi d tto comment on the legal consequences of clouded title. title

ď ś6. Real estate attorneys. While is sounds self -serving serving, for most people people, purchasing real estate is one of the life's most significant g legal g and financial transactions. ď śHiring a real estate agent costs about 3 to 6 percent of a home's purchase price. Secure home financing cost anywhere from 1 to 3 percent of the loan amount.

ď śWhy people sign a purchase agreement, a mortgage loan agreement agreement, or sign off on warranties, title schedules, insurance declarations,, or other various third party p y legal agreements, without the expertise of a real estate attorney, is puzzling.

ď śReal estate transactions are all about legal contracts in the end. end A loan officer is not an attorney. A real estate agent is not attorney. y A neighbor g or cousin,, may y or may not be an attorney. Don't skimp. And when any real estate professionals pushes or "encourages" a home buyer to forgo legal advice, then that in itself is a pretty good sign that a real estate attorney is needed. Read more about Financial Relief here: ď ś

Understanding the real estate pros competing interests in the residential real estate transaction  
Understanding the real estate pros competing interests in the residential real estate transaction  

Real Estate and Finance Attorney David Soble reveals how real estate advisers often put their interests before their clients and how to pres...