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Resources for Miami Sellers

Why You Need a Lawyer When You Buy or Sell a House

Coral Gables Realtor

Buy­ing a home will prob­a­bly be the largest and most sig­nif­i­cant pur­chase you will make in your life. It also involves the law of real prop­erty, which is unique and raises spe­cial issues of prac­tice, and prob­lems not present in other trans­ac­tions. A real estate lawyer is trained to deal with these prob­lems and has the most expe­ri­ence to deal with them. Some states cer­tify lawyers as “Real Prop­erty Spe­cial­ists” as a result.

In the typ­i­cal home pur­chase, the seller enters into a bro­ker­age con­tract with a real estate agent, usu­ally in writ­ing. When the bro­ker finds a poten­tial buyer, nego­ti­a­tions are con­ducted through the bro­ker, who most often acts as an inter­me­di­ary. Once an infor­mal agree­ment is reached, buyer and seller enter into a for­mal writ­ten con­tract for the sale, the pur­chase agree­ment. The buyer then obtains a com­mit­ment for financ­ing. Title is searched to sat­isfy the lender and the buyer. Finally, the prop­erty is trans­ferred from the seller to the buyer, and the seller receives the pur­chase price bar­gained for in the contract.

This seems sim­ple, but with­out a lawyer, the con­se­quences may be more dis­as­trous than pur­chas­ing a car that turns out to be a lemon, or a stock invest­ment that was unwise.

A lawyer can help you avoid some com­mon prob­lems with a home pur­chase or sale. For exam­ple, a seller may sign a bro­ker­age agree­ment that does not deal with a num­ber of legal prob­lems. This hap­pens quite often; REALTOR’s often use stan­dard forms, expect­ing that they will cover all cir­cum­stances or will be eas­ily cus­tomiz­able for unusual circumstances.

In the absence of an agree­ment to the con­trary, the seller may become liable to pay a bro­ker­age com­mis­sion even if a sale does not occur, or to pay more than one bro­ker­age com­mis­sion. If the agree­ment allows the seller the right to nego­ti­ate on his or her own behalf, for exam­ple, you may avoid this prob­lem. A lawyer can explain the effect of mul­ti­ple list­ings. He or she can nego­ti­ate the REALTOR’s rights if the seller with­draws the prop­erty from the mar­ket, or can’t deliver good mar­ketable title.

The seller should have the advice and guid­ance of an attor­ney with respect to a bro­ker­age agree­ment. Even if the agree­ment is a stan­dard form, its terms should be explained to the seller and revised, if nec­es­sary. An attor­ney should also deter­mine if the agree­ment was prop­erly signed.

Even if a lawyer is not needed dur­ing the course of nego­ti­a­tions, the buyer and seller each may have to con­sult with a lawyer to answer impor­tant ques­tions, such as the tax con­se­quences of the trans­ac­tion. To a seller, the tax con­se­quences may be of crit­i­cal impor­tance. For exam­ple, the income tax con­se­quences of a sale, par­tic­u­larly if the seller makes a large profit, may be con­sid­er­able. An attor­ney can advise whether the seller can take advan­tage of tax pro­vi­sions allow­ing for exclu­sion of cap­i­tal gains in cer­tain circumstances.

The pur­chase agree­ment is the sin­gle most impor­tant doc­u­ment in the trans­ac­tion. Although stan­dard printed forms are use­ful, a lawyer is help­ful in explain­ing the form and mak­ing changes and addi­tions to reflect the buyer’s and the seller’s desires. There are many issues that may need to be addressed in the pur­chase agree­ment; below are some com­mon examples:


  • If the prop­erty has been altered or there has been an addi­tion to the prop­erty, was it done lawfully?
  • If the buyer has plans to change the prop­erty, may what is planned for the prop­erty be done lawfully?
  • What hap­pens if a buyer has an engi­neer or archi­tect inspect the prop­erty and ter­mites, asbestos, radon, or lead-based paint is found?
  • What if the prop­erty is found to con­tain haz­ardous waste?
  • What are the legal con­se­quences if the clos­ing does not take place, and what hap­pens to the down pay­ment? This ques­tion raises related ques­tions: Will the down pay­ment be held in escrow by a lawyer in accor­dance with appro­pri­ately worded escrow instruc­tions? How is pay­ment to be made? Is the clos­ing appro­pri­ately con­di­tioned upon the buyer obtain­ing financing?

Most buy­ers finance a sub­stan­tial por­tion of the pur­chase price for a home with a mort­gage loan from a lend­ing insti­tu­tion. The pur­chase agree­ment should con­tain a care­fully worded pro­vi­sion that it is sub­ject to the buyer’s obtain­ing a com­mit­ment for financing.

Again, it is impor­tant to remem­ber that printed con­tract forms are gen­er­ally inad­e­quate to incor­po­rate the real under­stand­ing of the buyer and seller with­out sig­nif­i­cant changes. In addi­tion, there are many kinds of mort­gages that may be avail­able. Mort­gage loan com­mit­ments and mort­gage loan doc­u­ments are com­plex. Lawyers can review and explain the impor­tance of these var­i­ous documents.

After the pur­chase agree­ment is signed, it is nec­es­sary to estab­lish the state of the seller’s title to the prop­erty to the buyer’s — and the finance institution’s — sat­is­fac­tion. Gen­er­ally, a title search is ordered from an abstract or title insur­ance com­pany. In some states, and in out­ly­ing areas of oth­ers, title insur­ance is not typ­i­cal. In such cases an attor­ney is essen­tial to review the sta­tus of title and ren­der an opin­ion of title in lieu of a title policy.

Assum­ing you are in an area where title insur­ance is cus­tom­ary, an attor­ney can help review the title search and explain the title excep­tions as to what is not insured, and deter­mine whether the legal descrip­tion is cor­rect and whether there are prob­lems with adjoin­ing own­ers or prior own­ers. He or she can also explain the effect of ease­ments and agree­ments or restric­tions imposed by a prior owner, and whether there are any legal restric­tions which will impair your abil­ity to sell the property.

The title search does not tell the buyer or seller any­thing about exist­ing and prospec­tive zon­ing. A lawyer can explain whether zon­ing pro­hibits a two-family home, or whether planned improve­ments vio­late zon­ing ordinances.

The clos­ing is the most impor­tant event in the pur­chase and sale trans­ac­tion. The deed and other clos­ing papers must be pre­pared. Title passes from seller to buyer, who pays the bal­ance of the pur­chase price. Fre­quently, this bal­ance is paid in part from the pro­ceeds of a mort­gage loan. A clos­ing state­ment should be pre­pared prior to the clos­ing indi­cat­ing the deb­its and cred­its to the buyer and seller. An attor­ney is help­ful in explain­ing the nature, amount, and fair­ness of clos­ing costs. The deed and mort­gage instru­ments are signed, and an attor­ney can be assure that these doc­u­ments are appro­pri­ately exe­cuted and explained to the var­i­ous parties.

The clos­ing process can be con­fus­ing and com­plex to the buyer and seller. Those present at the clos­ing often include the buyer and seller, their respec­tive attor­neys, the title closer (rep­re­sen­ta­tive of the title com­pany), an attor­ney for any lend­ing insti­tu­tion, and the real estate bro­ker. There may also be last minute dis­putes about deliv­er­ing pos­ses­sion and per­sonal prop­erty or the adjust­ment of var­i­ous costs, such as fuel and taxes. If you are the only per­son there with­out a lawyer, your rights may be at risk.

Per­haps the most impor­tant rea­son to be rep­re­sented by an attor­ney is con­flict­ing inter­ests of the par­ties. Through­out the process, the buyer’s and seller’s inter­ests can be at odds with each other, and even with those of pro­fes­sion­als involved in the sale. The bro­ker gen­er­ally serves the seller, and the lender is obtained by the buyer. Both want to see the deal go through, since that is how they will get paid. Nei­ther can pro­vide legal coun­sel. The respec­tive lawyers for the buyer and seller will serve only their own clients’ best inter­ests. Seek­ing the advice of a lawyer is a very good idea from the time you decide to sell or to buy a home until the actual closing.

Copy­right© 2012 Find­Law, a Thom­son Reuters busi­ness. All rights reserved.


Coral Gables Condos for Sale

Nego­ti­at­ing to Yes
These tips can help you turn a nego­ti­a­tion into a win-win agreement.

Nego­ti­at­ing a pur­chase agree­ment is per­haps the trick­i­est aspect of any real estate trans­ac­tion. Most home buy­ers and home sell­ers want to arrive at a win-win agree­ment, but that’s not to say either side would regret get­ting a big­ger “win” than the other. Suc­cess­ful nego­ti­at­ing is more than a mat­ter of luck or nat­ural tal­ent. It also encom­passes the learned abil­ity to use cer­tain skills and tech­niques to bring about those cov­eted win-win results.

Here are six tips and sug­ges­tions to turn nego­ti­a­tion into agreement:

1. Start with a fair price and a fair offer. There’s no ques­tion that sig­nif­i­cantly over­pric­ing your home will turn off poten­tial buy­ers. Like­wise, mak­ing an offer that’s far lower than the ask­ing price is prac­ti­cally guar­an­teed to alien­ate the sell­ers. Ask­ing and offer­ing prices should be based on recent sales prices of com­pa­ra­ble homes.

2. Respect the other side’s pri­or­i­ties. Know­ing what’s most impor­tant to the per­son on the other side of the nego­ti­at­ing table can help you avoid push­ing too hard on hot or sen­si­tive issues. For exam­ple, a seller who won’t budge on the sales price, might be will­ing to pay more of the trans­ac­tion costs or make more repairs to the home, while a buyer with an urgent move-in date might be will­ing to pay a higher por­tion of the trans­ac­tion costs or forgo some major repairs.

3. Be pre­pared to com­pro­mise. “Win-win” doesn’t mean both the buyer and the seller will get every­thing they want. It means both sides will win some and give some. Rather than approach­ing nego­ti­a­tions from an adver­sar­ial winner-take-all per­spec­tive, focus on your top pri­or­i­ties and don’t let your emo­tions over­rule your bet­ter judgment.

4. Meet in the mid­dle. Can’t decide who will pay the record­ing fee? Can’t agree on a close-of-escrow date? Argu­ing over cos­metic repairs? Split­ting the dif­fer­ence is a time-honored and often suc­cess­ful nego­ti­a­tion strat­egy. Pay half the fee. Count off half the days. Fix half the blemishes.

5. Leave it aside. Politi­cians and cor­po­rate exec­u­tives are famous for their “for future dis­cus­sion” agree­ments. If you have a major stick­ing point that’s not mate­r­ial to the over­all con­tract (e.g., the pur­chase of fur­ni­ture or fix­tures), fin­ish the main agree­ment, then resolve the other dif­fi­cul­ties in a side agree­ment or amend­ment. This tech­nique allows both sides to rec­og­nize and solid­ify basic areas of agree­ment, then move ahead toward a fair com­pro­mise on other terms and con­di­tions. Sum­ma­riz­ing the points of agree­ment in writ­ing is another help­ful strategy.

6. Ask for advice. Suc­cess­ful REALTORS® tend to be expe­ri­enced nego­tia­tors. They’ve seen what works and what doesn’t in count­less real estate trans­ac­tions, and they’ve estab­lished a track-record of bring­ing buy­ers and sell­ers together. Con­sult your REALTOR® about nego­ti­at­ing strate­gies, win-win com­pro­mises and cre­ative alternatives.

Copy­right© 2000 Mar­cie Geffner. All rights reserved.


Why You Should Work With a REALTOR?

Pinecrest Luxury Homes

Not all real estate prac­ti­tion­ers are REALTORS®. The term REALTOR® is a reg­is­tered trade­mark that iden­ti­fies a real estate pro­fes­sional who is a mem­ber of the NATIONAL ASSOCIATION of REALTORS® and sub­scribes to its strict Code of Ethics. Here are five rea­sons why it pays to work with a REALTOR.


1.) You’ll have an expert to guide you through the process. Buy­ing or sell­ing a home usu­ally requires dis­clo­sure forms, inspec­tion reports, mort­gage doc­u­ments, insur­ance poli­cies, deeds, and multi-page set­tle­ment state­ments. A knowl­edge­able expert will help you pre­pare the best deal, and avoid delays or costly mis­takes.

2.) Get objec­tive infor­ma­tion and opin­ions.
REALTORS® can pro­vide local com­mu­nity infor­ma­tion on util­i­ties, zon­ing, schools, and more. They’ll also be able to pro­vide objec­tive infor­ma­tion about each prop­erty. A pro­fes­sional will be able to help you answer these two impor­tant ques­tions: Will the prop­erty pro­vide the envi­ron­ment I want for a home or invest­ment? Sec­ond, will the prop­erty have resale value when I am ready to sell?

3.) Find the best prop­erty out there.
Some­times the prop­erty you are seek­ing is avail­able but not actively adver­tised in the mar­ket, and it will take some inves­ti­ga­tion by your REALTOR� to find all avail­able properties.

4.) Ben­e­fit from their nego­ti­at­ing expe­ri­ence.
There are many nego­ti­at­ing fac­tors, includ­ing but not lim­ited to price, financ­ing, terms, date of pos­ses­sion, and inclu­sion or exclu­sion of repairs, fur­nish­ings, or equip­ment. In addi­tion, the pur­chase agree­ment should pro­vide a period of time for you to com­plete appro­pri­ate inspec­tions and inves­ti­ga­tions of the prop­erty before you are bound to com­plete the pur­chase. Your agent can advise you as to which inves­ti­ga­tions and inspec­tions are rec­om­mended or required.

5.) Prop­erty mar­ket­ing power.
Real estate doesn’t sell due to adver­tis­ing alone. In fact, a large share of real estate sales comes as the result of a practitioner’s con­tacts through pre­vi­ous clients, refer­rals, friends, and fam­ily. When a prop­erty is mar­keted with the help of a REALTOR�, you do not have to allow strangers into your home. Your REALTOR� will gen­er­ally pre­screen and accom­pany qual­i­fied prospects through your prop­erty.

6.) Real estate has its own lan­guage. If you don’t know a CMA from a PUD, you can under­stand why it’s impor­tant to work with a pro­fes­sional who is immersed in the indus­try and knows the real estate lan­guage.

7.)REALTORS® have done it before. Most peo­ple buy and sell only a few homes in a life­time, usu­ally with quite a few years in between each pur­chase. And even if you’ve done it before, laws and reg­u­la­tions change. REALTORS®, on the other hand, han­dle hun­dreds of real estate trans­ac­tions over the course of their career. Hav­ing an expert on your side is crit­i­cal.

8.) Buy­ing and sell­ing is emo­tional. A home often sym­bol­izes fam­ily, rest, and secu­rity ? it’s not just four walls and a roof. Because of this, home buy­ing and sell­ing can be an emo­tional under­tak­ing. And for most peo­ple, a home is the biggest pur­chase they’ll ever make. Hav­ing a con­cerned, but objec­tive, third party helps you stay focused on both the emo­tional and finan­cial issues most impor­tant to you.

9.) Eth­i­cal treat­ment. Every mem­ber of the NATIONAL ASSOCIATION of REALTORS® makes a com­mit­ment to adhere to a strict Code of Ethics, which is based on pro­fes­sion­al­ism and pro­tec­tion of the pub­lic. As a cus­tomer of a REALTOR�, you can expect hon­est and eth­i­cal treat­ment in all transaction-related mat­ters. It is manda­tory for REALTORS® to take the Code of Ethics ori­en­ta­tion and they are also required to com­plete a refresher course every four years.

 1995–2013 2012 NATIONAL ASSOCIATION OF REALTORS® All rights reserved.


The Bot­tom Line on Con­tract Nego­ti­a­tion
Ask these ques­tions before you decide to go ahead with a contract.

By Mar­cie Geffner

Commercial Property Realtor

The nat­ural focal point of a real estate pur­chase con­tract is the sell­ing price of the home, but the price isn’t the only fac­tor that deter­mines the net bot­tom line for both the buyer and the seller. Is a bar­gain for the buyer really a bar­gain if he or she is pay­ing all the trans­ac­tion costs? Is a top price for the seller really a top price if the buyer wants all the fur­ni­ture to be included in the pur­chase price? Or if the buyer they can’t come up with the down­pay­ment or qual­ify for a mortgage?

Before you decide to go ahead with a great price, here are five other bottom-line points to consider:

1. What are the esti­mated trans­ac­tion costs and who will pay for what? Typ­i­cal costs include the bro­kers’ com­mis­sion, a home inspec­tion, a ter­mite inspec­tion, escrow or attorney’s fees, a title search, an owner’s title insur­ance pol­icy, trans­fer taxes and record­ing fees. The price tags on these items vary greatly around the coun­try. Who pays for what is a mat­ter of both local cus­tom and negotiation.


2. How much money is the buyer putting into escrow and how soon? A big deposit — called “earnest money” — and a sub­stan­tial down pay­ment are gen­er­ally seen as a sign that the buyer is seri­ous about com­plet­ing the trans­ac­tion. From the seller’s point of view, the more money the buyer places in escrow and the sooner the money is trans­ferred, the better.

3. Is there a mort­gage financ­ing con­tin­gency and how spe­cific is it? The mort­gage escape clause is a must for buy­ers, unless they’re pay­ing all cash for the home. With­out this con­tin­gency, buy­ers can be legally oblig­ated to pur­chase the home even if they can’t obtain financ­ing. Fur­ther, an open-ended state­ment that says the buyer will obtain a loan “at the pre­vail­ing rate of inter­est” leaves the buyer com­pletely exposed to inter­est rate fluc­tu­a­tions. A state­ment that says the loan must be at an inter­est rate “not to exceed xx per­cent” and on spec­i­fied terms is preferable.

4. What fur­ni­ture, fix­tures and appli­ances, if any, are being sold with the prop­erty? Tech­ni­cally, any­thing that’s per­ma­nently affixed to or installed in the home is real prop­erty. Every­thing else is the seller’s per­sonal prop­erty. This dis­tinc­tion is a nar­row one and it nat­u­rally leads to a fair amount of con­fu­sion. Are built-in appli­ances real prop­erty or per­sonal prop­erty? What about a shelv­ing sys­tem? A chan­de­lier? Win­dow cov­er­ings? Pot­ted plants in the back­yard? Sell­ers who intend to remove any­thing that’s attached to the home should have that spelled out in the con­tract. And the same goes for buy­ers who expect to acquire any of the fur­ni­ture or other movables.

5. What will hap­pen if either side breaches the con­tract? Unless an unmet con­tin­gency trig­gers the aban­don­ment of the con­tract, it’s a bind­ing legal doc­u­ment. Buy­ers who fail to per­form can lose their deposit money. Sell­ers who try to back out can be sued for “spe­cific per­for­mance,” which forces the sale of the home to the buyer. Many con­tracts also spec­ify that dis­putes must be brought in small-claims court or pre­sented for arbi­tra­tion or mediation.

Tip: Ask your real estate agent to go over the stan­dard con­tract with you before you receive or make a pur­chase offer. That way, you’ll know what to expect and be pre­pared to nego­ti­ate the best deal you can get.

Copy­right© 2000 Mar­cie Geffner. All rights reserved.

Appraisals Remain Big Hur­dle, Agents Say

Daily Real Estate News | Mon­day, Octo­ber 15, 2012

South Miami Real Estate Services

Appraisals have been blamed on derail­ing a lot of sales in recent years. In fact, more than one-third of REALTORS® recently reported that deals were can­celed, delayed, or rene­go­ti­ated to a lower price due to a low appraisal.

The National Asso­ci­a­tion of REALTORS® has spo­ken out against faulty appraisals, blam­ing it on hold­ing back the hous­ing recov­ery.
More real estate pro­fes­sion­als are start­ing to include appraisal con­tin­gen­cies in their con­tracts. These con­tin­gen­cies spec­ify how much a buyer would be will­ing to pay in cash in case the appraisal comes in lower than the agreed upon sales price.

Apprais­ers have been crit­i­cized for using fore­clo­sures as com­pa­ra­ble homes in their val­u­a­tions and for fail­ing to take into account mar­ket con­di­tions like the low inven­tory and bid­ding wars in many areas, accord­ing to NAR’s report. NAR also has crit­i­cized many banks for increas­ing their require­ments to six com­pa­ra­ble sales instead of three, par­tic­u­larly at a time with low inventories.

It’s hold­ing sell­ers off the mar­ket,” Jed Smith, NAR’s man­ag­ing direc­tor of quan­ti­ta­tive research, told The New York Times. “Sales vol­ume could prob­a­bly be an addi­tional 10 to 15 per­cent higher if we had nor­mal lend­ing prac­tices and if we had nor­mal appraisal practices.”

Apprais­ers say they’re not mak­ing val­u­a­tions lower but they’re reflect­ing the cur­rent value of homes.

Apprais­ers don’t set the mar­ket, they reflect what’s hap­pen­ing in the mar­ket,” Ken Chitester, a spokesman for the Appraisal Insti­tute, told The New York Times. “So don’t shoot the mes­sen­ger. Blam­ing the appraiser for a bad hous­ing mar­ket is like blam­ing the weath­er­man because you don’t like the weather.”

Apprais­ers don’t always make adjust­ments if they use bank-owned homes in com­pa­ra­bles because not all REOs sell at a dis­count and not all are in bad con­di­tion, says Dan McK­in­non, who oper­ates an appraisal com­pany in Phoenix. When neigh­bor­hoods are dom­i­nated by REOs, those homes need to be fac­tored in to help deter­mine the value of homes, he adds.

If that prop­erty is in sim­i­lar con­di­tion to your sub­ject, it is direct com­pe­ti­tion,” McK­in­non says.

Source: “Scrutiny for Home Apprais­ers as the Mar­ket Strug­gles,” The New York Times (Oct. 12, 2012)