My team is grateful to the team from Boston-based Tempus Fugit Law Firm for this informative Q&A on critical real estate matters. Read on!
CK: What are some of the most common mistakes to avoid in a real estate transaction?
TFL: When buying or selling a home or a condominium unit, extreme care, and attention to detail is always necessary to ensure you are getting what you bargained for. This is an invaluable asset that can either make or break the bank. As a result, I oftentimes see buyers foregoing their due diligence and not thoroughly crossing their Ts and dotting their Is. Whether it is a septic tank that needs repair or faulty wiring issues, these complications need to be brought to an attorney’s attention before the Purchase and Sales Agreement is due and signed. We can assist in negotiating terms and adding provisions into the agreement that can ensure such problems are taken care of before closing. As for sellers, patience is key –especially when contingencies are involved. You want to sell just as bad as a buyer wants to buy, but ordering inspections, obtaining a loan commitment, and performing a title exam takes time. Let your teamwork for you to ensure a smooth transaction.
CK: Why is it important to have a law firm assist with your real estate transaction?
TFL: My real estate team is a group of highly educated attorneys who deal with the home buying or selling process every day. They have seen hundreds of agreements, dealt with various clients, and negotiated multiple transactions. A home or unit is an invaluable asset that should be treated with care and meticulousness. As a buyer or seller, you should have an experienced individual with expertise in the field negotiate your agreements, evaluate title, and ensure the transaction progresses smoothly and without error. Going into a real estate contract without a law firm is an extremely risky undertaking.
CK: Is Title Insurance necessary?
TFL: We highly recommend that Buyers purchase owner’s title insurance. It is a onetime premium that runs with the property for your entire duration of home ownership. Prior to Closing, we will conduct a title search to review the public records concerning the property you are purchasing. My firm checks that there are no liens/encumbrances impacting the property that must be cleared prior to Closing. However, there may be hidden title defects that even the most careful title search will not reveal. These defects are dangerous because you may not learn of them until many months, or years after your purchase; you could be forced to spend substantial sums on legal fees. However, with title insurance, the costs associated with these claims are may be completely covered!
CK: What are the most common reasons a real estate transaction falls apart?
TFL: Real estate transactions can fall through for any number of reasons. Sometimes, buyers get cold feet. Other times, sellers believe that they should be getting more for their property and decide to hold off until they receive the offer of their dreams. Buying or selling is not an easy process, and it takes a considerable amount of time and energy to finally get to closing and have title transferred. However, with the right real estate agent and law firm most concerns can be readily alleviated or resolved. An open line of communication with individuals who perform these types of deals daily can assist buyers and sellers reach the finish line.
CK: How are lawyer fee's structured and how much should someone expect to pay? What other fee's should you prepare before closing?
TFL: At Tempus Fugit Law, we charge flat fees for our purchase or sales transactions. In other words, no matter what the purchase price is or how long we spend working on a deal, our clients are paying relatively the same amount. For sellers, we have a flat fee on our fee agreement and offer discounts to clients who are selling and buying a home or a unit simultaneously. On the buy side, we still charge a flat settlement fee as well as charges we need to be reimbursed for –such as recording, mail, and title exam charges. Additionally, other charges are added to a buyer or seller’s final settlement statement which are separate and apart from any lawyer fees. In Massachusetts, sellers are responsible for paying the real estate transfer tax. This sum is calculated by multiplying $4.56 per thousand of the home’s the purchase price. Utility adjustments and prorations for gas, oil, property tax bills, etc. are included in the statement as well so each party is only paying the bills for the duration of their ownership. Even lenders add in their own origination charges and fees that affect final numbers. Needless to say, a lot of moving parts are involved in figuring out what someone should expect to pay at closing. Overall, my firm works strenuously to ensure that all our clients receive a reasonable price for the absolute best quality of work. If a client cannot afford our services, we also work with them to figure out a solution. Clients' needs always come first!
For more information, reach out to Tempus Fugit Law at (617) 752-2371 or email [email protected].