by Lina Martinez


Buying Residential Real Estate: 8 Legal Questions and Answers

Buying a residential property is one of the biggest decisions of an individual’s life, and it can be a complex and exhausting process from finding the right house for your loved ones to successfully moving and settling in your new home.

The steps that lie in between will have a home buyer seeking the expert guidance of several different professionals, such as an experienced real estate agent, a reliable financial adviser, an insurance consultant and a seasoned residential real estate attorney.

With so many legalities involved in the buying and selling of residential real estate, having basic knowledge of some key concepts will help you make informed decisions as you go along. Here are eight key questions and answers on some of the legal aspects of home buying.

What is real estate law?

It is a branch of law that governs the legalities involved in buying, selling and leasing all types of property, including residential, commercial or other types of real estate.

Do I really need a lawyer to buy a house?

Yes. Having access to sound legal counsel is crucial when buying or selling residential real estate to safeguard your best interests. As you’ll be signing legal contracts and may not be able to correctly understand all the fine print, it makes sense to hire an experienced real estate attorney to guide you through the process.

A property law attorney can help you with legal documentation, conduct and review a title search on your behalf, protect your legal rights and oversee the closing. Chip Coover from Coover Law Firm explains that having a lawyer represent you when you buy a home will protect you from any issues that were missed in the home inspection.

How can a buyer ensure that the seller really owns the home they’re selling?

This is ensured through a process called title search. It involves searching the local government records of the title of the property in question. It is best if the search is prepared and analyzed by a lawyer, as they have the legal expertise to determine if the seller really holds the title.

Is a title search needed even if the seller has a deed?

Yes. A deed is only a document through which the right of ownership of a property is transferred from one person or entity to another. It does not prove that the seller owns the property and doesn’t reveal other owners, if any. Moreover, you can find out about any claims or liens against a property only through a title search.

What is title insurance and why do I need it?

Buying title insurance ensures that the title of the home you’re purchasing is insured in your name. It is important because it provides two-fold protection—it protects you against financial loss in connection with your title and it also covers legal costs, in the case the need for litigation arises.

In short, title insurance protects you against title fraud and ensures rightful and lawful ownership of the property in question.

What is a contingency?

Contingencies are provisions in a real estate purchase or sale contract that allow the prospective buyer to abandon a purchase in case certain conditions are not met. For instance, you agree to purchase a home but you can add contingencies that make the final closing subject to conditions such as getting a home loan, sale of your present property that’s to fund your purchase, or a successful independent inspection of the building.

Contingencies act as a safety net for the home buyer and should be reviewed by a seasoned real estate attorney to protect your best interests.

What are the common causes of real estate disputes?

Legal disputes involving real estate can be related to the ownership, purchase, sale, development, renovation or use of a property; disputes relating to zoning, land use and construction-related matters; and so forth.

Common reasons for disputes include breach of contract, boundary disputes, fraud or nondisclosure, construction or property defects, noncompliance with environmental regulations, title insurance dispute, earnest deposit recovery, homeowner-tenant disputes, and unlawful foreclosure by the lending company.

What happens if a property dispute arises?

Generally, both parties try to avoid litigation to resolve a dispute as it can be a lengthy and costly process. The other, cost-effective alternative is to resolve the issue outside the courtroom via arbitration or mediation. Out-of-court negotiation is generally a lawyer’s first course of action, with litigation being the last resort when all efforts to reach an agreement have failed.