By Phil Halverson, Esq., Halverson & Associates
Reprinted from an article published by the Bar Association
This article discusses common legal questions that arise in the purchase and sale of real estate.
Buyers and sellers of real estate sign contracts and make important personal, financial and legal decisions. It is intended to help buyers and sellers of property make informed decisions when making or accepting offers, seeking financing or transferring title to real estate.
Real estate is probably the single largest acquisition a person will ever make. It is important to consider these obligations when deciding to purchase property.
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20. How Do I Find Out The Condition Of The Property?
It is important to ask questions about the property before signing any type of agreement, offer or contract to purchase. Buyers have the opportunity to inspect the property before agreeing to buy it. Most purchase agreements provide buyer conditional approval of a home inspection report. In California, sellers have a duty to disclose known defects of the buyer. It is called a Transfer Disclosure Statement.
21. What Is A Condominium?
The condominium is a type of private ownership. The purchaser of a condominium becomes the owner of a specific unit in a multiple unit dwelling, and has the exclusive right to use that one unit. The rest of the property, such as the walks, garden, and swimming pool, is “shared” with the owners of the other units. The buyer has to contribute to the cost of maintenance and repair of these common areas, and carry out other terms of the “Homeowners’ Association Agreement.”
22. What If I‘m Planning To Build A New Home Or Major Renovations To Existing Properties?
When looking to purchase land on which to build a home, have the land inspected to ensure that it is suitable for the type of construction planned. Whether considering new construction or major renovations, it is important to find out if there are any laws that may limit the buyer’s ability to do the work.
23. How Much Commission Does The Seller Have To Pay?
The commission to be paid, usually by the seller is, by law, negotiable. The commission is paid to the broker. Once a listing agreement is signed, the seller must pay the commission based upon the sale price received. If a seller sells the property privately while the listing is in effect, he may be legally obliged to pay the commission to the broker.
24. What Is A Multiple Listing?
This is the most common type of Listing Agreement. A multiple listing means the seller engages the services of a single broker, but authorizes that broker to use the services of other agencies to sell the property. The advantage of a MLS agreement is that the property can be made more widely known to prospective purchasers.
The other type of agreement, the exclusive listing agreement gives only one agency the authority to sell the property. The services of other agents can be used to sell the property, but one agent controls who sees the property.
25. Can I Sell My Property Without An Agent?
It is possible to sell property without using brokers. To private sales, the seller and prospective buyers deal between themselves. Either the buyer or seller, or their attorney, may draft the documents. The contract between the seller and the buyer represents an important legal commitment on the part of both parties. The terms and conditions in the contract bind both parties and can be difficult to change once both parties have signed.
26. What Documents Are Needed For The Purchase Of Real Estate?
The acquisition of real estate is generally commenced when the buyer makes an offer. The offer, or purchase is an important document. It is the basic contract and defines the rights and obligations of both the seller and buyer. The offer must be in writing. Both the seller and the buyer must sign the offer with the knowledge that it is a contract and they are bound by its terms.
The offer can be printed on a standard form. Even an offer printed on a standard form may be changed. Clauses can be removed and conditions may be added. Read the offer carefully and be sure that it contains all the agreed terms. Once the contract is signed by both the buyer and the seller, it cannot be changed without the mutual agreement of both parties.
Buying and selling real estate is a complex process. There are a number of personal, financial and legal considerations. The contract for purchase and sale and the loan agreement are often two of the most important contracts entered into during a lifetime. Careful consideration before making any decisions or signing any documents relating to the purchase or sale is necessary to ensure that the legal interests of both the buyer and seller are adequately protected.
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