Cassandra Savoy, Esq. OP/ED
DO I NEED A LAWYER TO BUY A HOUSE? PART 1
The short answer is you absolutely need a lawyer to buy a house! If you are a first-time homebuyer, the need for an attorney increase by ten. For most first-time buyers, this is the largest investment of your life so far, and you don’t want to live to regret the purchase! Do not think that because you have lived in a house all of your life, you know how to purchase one, especially the first one. Call on the services of an expert. Retain a lawyer to help you.
The lawyer’s role in the purchase is not to tell you that the house is in the right location. The lawyer’s role is not to tell you that the neighborhood schools are great. The lawyer’s role is not to tell you that you are paying the right price for the house. The lawyer’s role is to guide you through the thought process with lots of opportunities to abandon the deal if it is not right for you.
Here’s what I mean. The smart buyer, the buyer who wants a purchase without drama selects an attorney before they begin the search for that brand-new home. If you don’t know a real estate attorney, ask around. You have friends who have purchased homes, speak with them; get a few names.
Importantly, don’t rule out an attorney because of price. Select an attorney who is experienced in helping clients either buy or sell residential real estate. Don’t select an attorney who just left the prosecutor’s office and has never handled a real estate closing in his life.
Like doctors, lawyers have areas of concentration. Regardless of how great a heart doctor is, if you broke your leg, you would not go to the heart doctor. You would choose an orthopedist who regularly deals with people with broken legs. Lawyers are like doctors in that regard.
So now you have your real estate attorney, and you are set to start your search. You call a realtor, or maybe you use a site like Zillow or Trulia to find the perfect home. All I can say is Buyer Beware!
First of all, remember, the realtor who shows you the house works for the seller. The realtor is paid by the seller and owes her allegiance to the seller. This is not to say that the realtor will not be truthful with you about the condition of the property, but the realtor can only divulge what she knows which could be a lot, or not so much.
If you find a house using Zillow or Trulia, you may deal directly with the seller who has a clear vested self-interest. Your lawyer works for you and his job is to protect your interests.
You sign a contract to buy the dream house! Signing the contract does not immediately obligate you to purchase the house. Call your lawyer. You have three days during which your attorney can review the contract. If necessary, your lawyer can extend the three-day attorney review. You will want to tell him what you were told during the negotiations with the realtor. His job is to ensure that you get what you were promised before you signed on the dotted line.
Consulting with your attorney is particularly important if you are dealing directly with the seller. The seller’s attorney has more than likely prepared a contract that tilts favor to the seller, not you. Your attorney’s role will be to even out the terms by either adding or rejecting terms that are not favorable to you. Your attorney will reject the contract prepared either by the realtor or the seller’s attorney but advise that the contract could be acceptable if seller agrees to your terms. . . and the negotiations begin.
If you are not purchasing new construction, and the house was built in the 40s or 50s, you could have a potential million dollar headache about to happen. Here’s what I mean. If you buy a house that has an underground oil tank and the tank is leaking, the ground water could become contaminated. Hundreds of people could become ill as the result of drinking the water that your underground tank contaminated.
The contamination problem belongs to the owner of the home when the problem is discovered. In other words, the problem belongs to YOU! You are not going to be able to sue the seller assuming that the you can locate the seller to sue and that seller has not relocated to the North Pole by the time you figure out you have a problem.
Therefore, your attorney will want you to have a specific inspection to make sure that there is no underground tank. he cost of the inspection is about $300. $300 is a lot of money, but not nearly as much as finding out five years down the road that your house is worth $0 because you a living on an environmental waste dump, and more importantly, that it is your responsibility to clean up the site.
If there is an underground tank, your attorney will ensure that seller addresses the clean-up, a $5,000 to $??? problem, and that seller produces the appropriate documentation from the New Jersey Department of Environmental Protection saying that the problem has been addressed and no further action is required.
Your attorney will ensure that you have the opportunity for a home inspection. He can extend the time for you to complete an inspection to as much as fourteen days. A home inspection is not when your uncle who is in the building trades takes a look around and declare the property is good shape. A home inspection is when you pay approximately $500 for a thorough home inspection and are provided a detailed written report of the findings.
You must attend the home inspection. You can’t send your brother because you have to work. A good home inspector will look at the roof, the plumbing, electrical, and heat systems. He will look at the landscaping to determine if there are negative indications. He will turn on the faucets and look under cabinets. He will tell you if there has been deferred maintenance issue and whether something does not work.
To the best of his ability, he will look where you probably have not looked. He may tell you about things that require further investigation. For example, if you buy a house in the winter, he may tell you that you need to see if the air conditioning is working at a later date, prior to closing the deal.
Do not rely on municipal inspections. Municipal inspectors are looking for code violations. Here’s a story to illustrate the point. A guy named Jim purchased a house in early November. When he inspected the property, there was no heat. The realtor told him truthfully that the owner was now living in a nursing home and speculated that as the reason the heat was turned off.
Despite his attorney’s warnings, Jim decided not to have a home inspection because the inspector wanted $400 to conduct an inspection. After all, he thought, the city will come out to inspect. The city did inspect and found that everything satisfied all of the town’s codes. Except when title finally transferred in February and Jim and his family were excited and anxious to move into their brand new home, he discovered that the boiler was cracked, and he would have to purchase a new boiler before they could occupy the house.
In the real estate world, it’s always BUYER BEWARE! What you see, and don’t see, is what you get. You must make sure that what you see and don’t see is what you actually want, or at least something you are willing to live with.
Had Jim spent $500 for a home inspection, rather than settled for a $40 code inspection, he would have timely learned that the boiler was inoperable. He could have demanded that seller repair the boiler. He saved $500, but ended up spending $3,500 to replace the boiler.
Remember to read Part II of this series, “Do I need a Lawyer to Buy a House?”
