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 śhttp://www.proven-resource.com/
Real Estate and Finance Attorney David Soble reveals how real estate advisers often put their interests before their clients and how to pres...