Due diligence on a real estate purchase opportunity involves hiring a qualified and experienced real estate lawyer to help you make an informed decision about financing the transaction. There are several legal aspects of the transaction the lawyer can look into to help you avoid problems once you have purchased the property.
Here are some crucial legal aspects of a real estate purchase that a lawyer can help you address before the closure of the transaction.
Establishing the Legal Ownership of the Property
Before you can invest in any real estate property, you must establish that you are dealing with the legitimate owners of the property. Purchasing real estate property can cost a fortune so you shouldn't be dealing with anyone other than the owner of the property or their chosen representatives.
A real estate lawyer can carry out a property search to find out on whose name the property you want to buy is registered. This helps identify the real owners of the property while protecting you from fraudsters that may pose as legitimate property owners.
Identifying Any Limitations on the Property
Although sellers of real estate property are legally required to provide certain disclosures during the sale, you shouldn't rely on them fully to learn these disclosures.
A real estate attorney can do some research to find out if there are any easements, covenants, encumbrances, and other restrictions you may need to know about. This will help you to determine if the property is still suitable for its intended use.
For example, you should avoid properties that include an easement if you intend to enjoy exclusive use of the property you're planning to buy. These legal instruments grant other people access to your property, which may not augur well for your enjoyment of the property.
Resolving Contract Disputes
It is not unusual for disputes to arise between real estate buyers and sellers before the transaction is completed. Disputes may arise over many things including:
- The negotiated purchase price
- The condition of the property at the time of closing the transaction
- The items included and excluded in the seller's offer
- How much of the closing costs each party should pay
A real estate lawyer can help resolve contract disputes by reviewing and interpreting the details included in the initial purchase and sale agreement. This helps to smoothly resolve disputes that may derail the closure of the transaction.
Real estate transactions are essentially legal transactions. Make sure you hire a real estate lawyer to avoid the potential pitfalls that real estate buyers face. Smart sellers know they also require a lawyer to even out the playing field.
For more information, contact a real estate legal service in your area.