Real Estate Law
State real estate laws can vary when it comes to the transfer of property, and some states require a real estate lawyer to be involved in the purchase and sale of a home. You may also want to hire a real estate attorney if you are facing foreclosure or the property has unique disclosure issues. Sellers are legally obligated to disclose certain problems to potential buyers, and hiring a property lawyer will protect your best interests whether you are buying or selling a home.
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UPDATED: Aug 19, 2021
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- A lawyer can provide a vital perspective when managing your property purchase, including making sure that all your paperwork is in order and that the legal arrangement for the property is in your best interest
- Sellers typically bear the burden of sharing information about the property so that the buyer can make the most informed decision possible
- When an inspection uncovers significant issues with your home, you can choose whether you remediate those issues before you move in or decide against the property
- Homeowner’s insurance is one of the best and most effective ways to protect your real estate investment
Buying and/or selling a home can be an exciting time. Unfortunately, it can also pose some potential problems. Take advantage of free state law resources to better understand real estate law and make a more informed decision about your next property purchase.
Speaking with a property attorney can give you an idea of what to expect when buying a home, what you’re legally required to disclose about a property, and what legal paperwork you need to file in order to transfer ownership of a property. Read now to learn more about when it’s in your best interest to hire a real estate lawyer.
Do you need help finding a real estate attorney to look over your paperwork? Enter your ZIP code above to find affordable real estate lawyers in your area.
When do you need a real estate lawyer?
A real estate lawyer specializes in overseeing real estate transactions, including contract review. Often, when buying a home, you may be able to work directly with a real estate agent to move smoothly through the home buying process. You may never have to involve a lawyer.
In some cases, however, particularly if you buy your home under special circumstances or there is a problem with the transaction, a real estate lawyer can step in.
Yes, it is in your best interest to hire a real estate attorney in the following situations:
When your state requires a real estate lawyer:
Some states require a real estate lawyer to be involved in the transfer of property. These states include:
- New Hampshire
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
If you live in one of these states, and you plan to purchase or sell a property, you will need to have a real estate lawyer involved in the process of purchasing property.
When you are moving into a new area from out of town:
Even if you have purchased a home in the past, a new area may have new regulations and requirements which you will need to meet. A real estate lawyer can help ensure that you aren’t missing anything about the property buying process and that all the paperwork gets per state law as you move to your new location.
When you need to evict tenants from the property after purchase:
In some cases, you may need to evict tenants who are not holding up their end of the bargain, or you may need to evict tenants who have been living in a rental property so you can live there yourself. Other times, previous owners need to be evicted until new buyers can move in.
Hire a real estate lawyer before evicting any tenants to make sure you don’t overstep your state real estate laws. An attorney with specialized experience in real estate law will know what paths to take to make sure you can move in quickly and legally.
When the property has structural problems or serious concerns that need to be addressed:
As either buyer or seller, you may want to make sure that a real estate lawyer looks over the terms of the transaction before closing on a property that has significant structural issues.
When splitting the proceeds from a home sale as part of a divorce agreement:
During a divorce, many people decide to sell the property they once lived in together and split the proceeds. If you need to navigate these complicated proceedings, including any potential tax implications, it’s important to hire a real estate attorney to advise you through the process.
When you have a lien on a property or are in foreclosure:
Financial issues can make it more difficult to navigate your property sale. Hiring a qualified property attorney ensures that you will better navigate any potential issues and maximize the profits you can receive from your home even if you need to sell fast for financial reasons.
Although they are a bargain, foreclosed homes are often sold as-is and the extent of the damage is often unknown to buyers until they can get an inspector inside after purchase. Consulting with a property lawyer when buying a foreclosed house will help you avoid potential pitfalls with the insurance company or mistakes during tax season.
When the property faces unique disclosure issues:
If there are things that you need to disclose about the property you’re selling, you may need to fill out a specific disclosure form that will list any known problems. There may be specific forms for each type of disclosure, including lead paint or natural hazards.
Talk to your real estate agent and a property attorney about what you need to disclose and how you need to share that information with potential buyers, including what forms you need to fill out in order to make sure that you have covered all necessary information.
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What is a seller legally required to disclose about a property?
When a buyer looks into a new property, they want to know everything about it: all the little details that have the potential to spell trouble down the road.
Most things the seller can reasonably expect the buyer to check out on their own: a lack of storage space, small closets, or outdated wallpaper, for example. Other things, however, the seller is legally required to disclose before the buyer makes an offer.
If you have doubts about whether or not you should disclose something, consult with a real estate attorney or make sure that it’s included in your real estate disclosures.
Most state property laws require sellers to disclose the following:
If the house had lead paint, asbestos, or another known hazard:
When you know that your home house had a serious problem, even if it has been removed or remediated in the past, the potential buyer needs to know. A buyer with young children may not want to move into a home that they know has lead paint or other serious hazards.
Federal law actually requires you to disclose lead paint in a home built before 1978 so that precautions can be taken if there is any further work done on the property. However, if you do not know whether lead paint was used in the construction of the home, real estate law does not require you to investigate it before selling.
Potential buyers might want to ask about the presence of lead paint in homes constructed before 1978 or include it as part of their inspections if sellers aren’t sure.
If the house has pest problems:
Some pest problems your potential buyers can clearly see if they know the signs: rodent droppings, signs of bugs scurrying away as they turn on the lights, or clear termite damage. In some cases, however, you might feel that you can hide the signs of those pests. Our advice? Don’t.
If you have pest problems on the property, you need to disclose those issues to potential buyers. You may also want to disclose large-scale pest issues that you have dealt with in the past so that buyers can act quickly if they see any potential problems in the future.
If the property has known drainage issues:
When it rains, there’s a spot in the basement that frequently gets wet. You have pools of water that gather in specific locations, especially standing water that seems to take a very long time to dissipate after a storm. Water issues can cause serious problems with the home, some of which homeowner’s insurance might not cover.
If you’re selling a home with water issues, you may want to make sure that you disclose them to potential sellers. This includes drainage problems that you may think you have remediated fairly recently, since the new buyer may become aware of problems with the so-called remediation after they move in.
If there are problems with neighbors or property lines:
If you have a known dispute with your neighbors, from a fence that happens to extend across the boundary or someone tried cutting down a tree straddling to owners’ properties, you need to disclose them to the new property owners ahead of time.
Boundary disputes, in particular, can cause serious issues. You want new owners to know exactly what they’re buying into when they settle on a new property.
If there is a problem with the home that could cause someone emotional distress:
Did someone die on the property, especially in a violent way? Is the house constructed over a former graveyard? Did someone commit suicide on the property?
Some buyers don’t mind purchasing a house, especially an older home, that has a considerable history. Others, however, may have trouble sleeping where haunting events have occurred. If you know something about the house’s history that could cause distress for the new residents, you need to disclose it ahead of time so they can make an informed decision about whether they want to live in the property.
In general, you may assume that there’s no reason to disclose a potential haunting. The truth is that some states, including Arizona, have laws on the books that require you to disclose “all known material facts” about the property, and that could include hauntings or paranormal activity.
Failure to disclose this information when a potential buyer asks, especially if you have proof of that paranormal activity, like a past exorcism on the property, could leave you in a legal bind. To keep yourself safe, consider disclosing any suspicions you may have ahead of time.
If the property faces specific hazards according to state real estate laws and regulations:
Real estate laws by state have some stringent disclosure requirements. In California, you must let buyers know if the house is in danger of any potential natural hazards, including fires, earthquakes, floods, or specific environmental hazards in the area. These disclosures let buyers make a more informed decision about the property and the area where it’s located, rather than being surprised by those potential challenges down the road.
What options do I have if something is wrong with the home at time of purchase?
Before purchasing a property, you should always have a home inspection done. Some sellers have a home inspection before they sell the property. This may give them the opportunity to clean up any problems with the home, take care of any necessary repairs, and make sure the home is in the best possible state to go on the market.
Even if the seller has already conducted a home inspection, you should still prioritize bringing in an inspector of your own. Ideally, you want to get the perspective of a different inspector from the one used by the sellers.
Your real estate agent can likely recommend a local home inspector to look over the property and identify potential problems, including structural issues or potential hazards you might not be able to see with the naked eye.
Even if the inspector discloses a problem, you may still feel that this is the ideal property for you. But who is the responsible party for home repairs following a home purchase? Does the issue lower the value of the property? What should you do next? Generally, you will have four options:
1 – Decide not to Purchase the Property
Some issues aren’t worth dealing with as you move into a new property, especially if your budget and timeline are particularly tight. Dealing with home repairs while also trying to manage the moving process can send your stress levels climbing.
If the inspector uncovers a foundation problem that will be difficult to remediate, lead paint in the walls when you know you’re bringing young children into the home, or other problems that are deal-breakers for you, you can walk away.
Often, you can still decide against the property after the inspection reveals significant problems even if you have already signed a contract. Most contracts will include a clause that indicates that the buyer can back out if the results of the inspection aren’t as anticipated.
2 – Ask the Seller to Fix the Issues
Sometimes sellers will be willing to fix the issues before you take possession of the property. They can bring in a contractor to cover any issues that may come up during the inspection, from fixing a leak in the plumbing to handling paint problems.
Many buyers prefer to have the seller fix any issues with the property if possible since that means the issues can get taken care of before they’re ready to move into the property. That way, you can focus on the move instead of the repairs.
However, having the sellers fix the property may delay your move-in date, which can be problematic if you’re dealing with a tight timeline. The sellers may also not fix the property per the inspector’s requirements, leaving you making up the difference after moving in.
If your new home was not repaired based on the specifications in your real estate agreement, speak with a real estate attorney as soon as possible to find out if you’re entitled to compensation.
3 – Ask the Seller to Discount the Property by the Amount of the Repairs
You may have noticed issues with the property, or had them uncovered during the inspection, but decide that they are manageable problems. You might decide that it is more effective for you to fix those issues on your own, or you might need to get into the property as soon as possible and feel that the most effective way to accomplish that goal is taking care of any needed repairs on your own.
Your real estate agent can ask the seller to drop the price of the property by the estimated value of the repairs, which could free up the funds you need to make those repairs while ensuring that you do not overpay for damaged property.
4 – Accept the Issues and Purchase the Property
Sometimes, especially in a seller’s market, you may choose to ignore potential issues with the property and move in anyway. Sometimes, those issues are not severe enough to prevent you from making your move-in date, and you may want to make sure that you can get into the property as soon as possible.
In a seller’s market, you may also not want to risk a seller backing out, leaving you without a property to move into, especially if your move date is getting close and you don’t have a lot of leeway. Talking to a real estate lawyer can give you the insight you need to make those vital decisions about the property.
Do you really need homeowners insurance?
Homeowner’s insurance is a vital part of homeownership and an important part of your budget following your purchase. In many cases, homeowner’s insurance is the only option you have for taking care of repairs or replacement of your home after a disaster.
Do you have to have homeowner’s insurance? A real estate lawyer can discuss your legal responsibilities. There are, however, many circumstances under which you may want to check your coverage and make sure it meets your needs. Scroll down to learn about when you really need homeowners insurance coverage.
When you take out a mortgage on the property:
As long as the bank owns a portion of your home, you may need to carry homeowner’s insurance that will help protect that investment in case anything happens.
In fact, you may be required to carry homeowner’s insurance as a condition of your mortgage, and failing to keep your insurance up to date could lead to significant legal consequences.
When you live in a disaster-prone area:
Some areas of the country are more likely to experience significant natural disasters than others. California, for example, is particularly prone to fires, especially during the dry summer season, while coastal Florida suffers immense hurricane threats each year. Your area likely has its own unique potential hazards and challenges you need to contend with.
Check your homeowner’s insurance policy to make sure it covers the disasters you’re most likely to face. If you fail to carry adequate insurance, a disaster could leave you floundering, with no way to replace your home or your possessions.
When you’re a landlord:
As a landlord, you do not need to carry insurance on the possessions inside a property. You do, however, need to make sure you carry adequate insurance to protect the structure itself and the property.
Whether you have renters who fail to take care of the property as they should or a disaster hits your property, renters’ insurance will not cover those expenses. Without the proper insurance policy, you may find yourself without the property you’ve invested so much into.
When you do not have the means to replace the property without that insurance:
Many people’s homes are the biggest investment they will ever make. No one likes to imagine that disaster will strike. However, disaster can strike any home at any time.
Floods can hit any area of the country, often entirely unexpectedly. Tornadoes, earthquakes, and hurricanes do not discriminate. Fires can hit due to electrical problems or even a moment’s carelessness, especially if you have children.
Those disasters can all spell ruin if you do not have adequate insurance to protect your family’s investment. A real estate lawyer or insurance agent can help go over your property to determine how much insurance you need to carry in order to maximize your protection.
Whether you’re considering buying or selling your property, a real estate lawyer can help ensure that your arrangements are in your best interest. Need help finding real estate law firms in your area? Enter your ZIP code below to find affordable property attorneys near you.