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Real Estate: Purchasing a Home
Buying And Selling A HouseGeneral Comment
The purchase of a house is often the single greatest financial investment made by a person or a couple. A mistake at this time can undo a lifetime of effort. The following outline merely gives the buyer or seller some idea of the problems. The complexities and technicalities involved require the service of an attorney who represents you.
Purchase and Sale Agreement
You should engage your attorney before you sign the binder, because it is a binding contract between the buyer and seller and defines the rights and duties of the parties. Those rights and duties may be altered or further defined in the purchase and sale agreement. Preferably, you should consult with an attorney as soon as you know you are going to buy a house or put your house up for sale (before you call in a real estate broker).
A buyer should have his or her own attorney even though the buyer will also pay for the bank attorney, because the bank attorney does not get involved until the end of the transaction. Many matters, which buyers and seller do not recognize as problems, may jeopardize not only their peace of mind, but their pocketbooks as well.
There is no "standard form" of binder or purchase and sale agreement that can be used in all transactions. There are in fact dozens of so-called standard forms and each one contains phrases which may be disadvantageous to one or the other party. Among the issues that will be negotiated as part of preparing the purchase and sale agreement are the following:
- buyer's loss of deposit if the buyer cannot obtain a mortgage
- seller's guarantee to pay the broker's commission even though the buyer defaults and there is no sale
- buyer's obligation to purchase the house even if it is totally destroyed
- seller's obligation to pay "his/her share of points, mortgage origination, or discount fee," which may amount to hundreds of dollars
- seller's obligation to vacate the house completely prior to passing papers
- seller's right to sue buyer for damages if buyer defaults (in addition to retaining the deposit)
- the buyer's right to have various inspections done at the premises, including a home inspection, pest inspection, lead paint and water, UFFT, radon and Title 5 issues
Obviously, some of these provisions are necessary in certain situations. The only way you can be fully protected is to have your attorney examine any purchase and sale agreement or binder, or any other instrument, before you sign it. It is extremely difficult, sometimes impossible, for a lawyer to protect his/her client when the client has already bargained away his/her protection in a poorly drawn or disadvantageous agreement.
Summary
The purchase and sale of a house is often the single largest financial transaction in a lifetime. It is important that you be represented by the attorney of your choice before you begin the buying or selling process. For additional information on this topic please see "The Role of an attorney in purchasing real estate and examining real estate titles."
How to Get Help
If you need a lawyer and don't know how to find one, you may contact the Massachusetts Bar Association's Lawyer Referral Service. The number in Boston is (617) 654-0400 or TDD (617) 338-0585. Outside Boston you may call toll-free 1-800-392-6164. There is no charge to call the Lawyer Referral Service, and your first half-hour consultation with an LRS attorney is only $25.
The Massachusetts Bar Association also offers free help through its Dial-a-Lawyer call-in program. On the first Wednesday of each month, from 5:30 to 7:30 p.m., volunteer lawyers are available to answer your basic legal questions by phone. Dial-a-Lawyer may be reached at (617) 338-0610.Posted on Apr 27, 2000 |
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