Law Offices of Jeff Smith
Law Offices of Jeff Smith
Buying & Selling Residential Real Estate
For many, the purchase or sale of a home is one of the largest and most important legal transactions in their life. Jeff Smith has years of experience in assisting clients to a satisfying closure of real property transactions. The philosophy is threefold:
(1) make sure the deal closes as intended;
(2) save the client unnecessary cost, and
(3) protect the client's interest.
Why Use a Quality Real Estate Attorney? Buyers or sellers are sometimes tempted (or steered) to the cheapest possible lawyer, or, worse yet, advised not to use an attorney at all. This is a dangerous tactic. Real estate sale contracts, riders, listing agreements, and mortgages are binding legal documents. On the lakefront and North Shore, the median home price is now well over $250,000, and mortgages routinely tie the buyer to a million dollars in payments. Sloppy or rushed real estate work not only causes long and inconvenient closings, but contributes to the growing number of lawsuits over residential sales. Nothing can be worse than when a dream home becomes a legal nightmare, or when a dissatisfied buyer comes back to haunt you. Hiring a professional real estate attorney is a wise investment, and overall home transaction costs are cheaper in states where attorneys are used.
What Should a Real Estate Attorney Do for You? Professional handling of a residential real estate transaction, to protect the client, typically involves the following legal services:
and, most important
- review of the real estate contract(s), addenda, and residential disclosures (required by law). Note that the standard form contract often used has not been drafted with the parties' interests in mind, but to facilitate sales, and that non-lawyers cannot legally advise a buyer or seller on its meaning or recommend language used.
- contact with the other party's counsel and contract negotiation as necessary
- monitoring home inspection and other deadlines
- addressing any issues raised by the home inspection(s)
- keeping abreast of all parties' progress in securing mortgages
- if representing a seller, obtaining title insurance as required by the contract for sale
- if representing a seller, obtaining the survey or condominium association documents as required by the contract for sale
- reviewing and dealing with any restrictive covenants
- reviewing title commitment policies for accuracy and for issues that may affect closing
- negotiating title issues
- reviewing the survey or condo association documents for any easement or property issues
- interfacing with the brokers, lenders, and underwriters and providing information as needed
- scheduling closings
- preparing closing documents
- calculating amounts necessary to close
- attending to payoffs of existing loans and mortgages
- attending to necessary municipal regulations, stamps, and water certifications
- attending the closing
- making sure documents are recorded with county recorder's offices
- responding to client needs and questions.
What Should Real Estate Legal Fees Cost? Can all the above be on the cheap? If everything is perfect, all the above is not expensive. However, additional, unexpected factors commonly arise in a transaction, including the quality of work done by the attorneys for the other parties, the needs and schedules of the lenders and brokers involved, the demands of the other parties, and unforeseen issues ranging from building defects to financing difficulties. In those situations the party who is poorly represented is at a severe disadvantage. I have seen many transactions where things are not done professionally, or sometimes the tasks are not done at all!
The Law Offices of Jeff Smith does not cut corners on a legal transaction this important. One of the largest financial transactions in the average person's life deserves to be done right, done professionally, and done on time. Also, since the real estate meltdown of 2006-2010, many procedures and forms have become more complicated as lenders and other parties seek to protect themselves.
However, legal fees in residential real estate are only a tiny fraction of the cost, much smaller than the percentages paid to brokers and local governments. Lately the average sale or purchase with no more than minor problems is running $600-1,000; if possible we try to do it for less. Typically the legal fees on a dual real estate transaction (sale of an old home and purchase of a new home) comes to less than 0.25% of the total combined prices, a small charge compared to those of brokers, state and local governments, and insurers; we can offer a cap of 1/2 of 1% regardless of the hours involved (unless there is litigation).
Normally we do not send out multiple bills on real estate, and simply state the total fees on the closing figure statement. If a sale is involved we receive payment out of the sale proceeds, requiring no out-of-pocket outlay by the seller. However, if you prefer we can bill monthly for legal services rendered and out-of-pocket costs advanced.
What Can The Client Do to Make a Transaction Easier? To facilitate a real estate transaction, assemble the following as soon as possible:
Title Services. Jeff Smith has worked directly with agents for Chicago Title, which means obtaining title insurance for you from Chicago's most well-established and accepted title insurer and getting the policy directly from CT&T (who has multiple suburban locations) instead of having to go through another agent. You are not billed legal fees for this agency service; title companies typically pay agents an agency fee from the premium. You have the right to use any insurer you prefer. Where a client retains this law office for the sale of a home and purchases a policy through us, we may be able to discount from the total fees, in consideration of any commission from the title company.
The above is not intended as a substitute for full legal advice, but only as general information. For legal advice, consult an attorney.