Buying Your First House?

It’s a tight local residential real estate market. Although more properties have come on the market in recent days with school soon letting out, the inventory of properties on the market is low. Buyers offer more than the list price and still lose out on properties. Some of those buyers have been in the market for a year or more. In our representation of buyers, we have seen that the tight market has resulted in the alteration of some of the traditional rights and obligations of the parties to a residential real estate transaction. Here’s the standard timeline with noted alterations:

1.      The seller places the house on the market

2.      The buyer pre-qualifies with a lender (unless it is a cash transaction)

3.      The buyer finds a house (not easy in a tight market)

4.      The buyer makes an offer

5.      The seller considers multiple offers (in this tight market) and accepts one

6.      If accepted, the buyer makes the deposit required under the offer (Note: Buyers are often making large deposits to “sweeten the offer”)

7.      Each of the seller’s and buyer’s attorneys speak with his/her respective clients and provide an approval or disapproval letter to the other attorney within a time period after execution of the agreement

8.      The buyer has an inspection conducted (Note: Buyers are typically waiving their inspection rights)

9.      The seller provides the existing search and survey

10.  The seller’s attorney orders the search and survey update

11.  The buyer’s attorney examines the title and submits a title examination to the title insurance company

12.  The buyer obtains a mortgage commitment

13.  The buyer’s attorney receives the title report from the title insurance company

14.  The buyer’s attorney provides the title report to the seller’s attorney and lender

15. The buyer’s attorney requests that the seller’s attorney forward tax receipts, water statement, etc.

16.  The buyer’s attorney requests curatives for all title defects, liens, and encumbrances based on the title report

17.  The seller’s attorney obtains curatives for the title defects, liens, and encumbrances (Note: Sellers’ attorneys have been increasingly declining to provide certain curatives, resulting in buyers’ attorneys having to obtain such curatives)

18.  The buyer’s lender provides a clearance to close

19.  The seller’s attorney provides a closing package with the proposed Deed, etc.

20. Once again, the buyer’s counsel request that the seller’s counsel forward tax receipts, water statement, etc. (Note: The sellers’ attorneys have been increasingly declining to provide these, resulting in buyers’ attorneys having to obtain them)

21.  The buyer’s attorney schedules closing with the lender’s and seller’s attorneys

22.  The seller’s attorney provides a closing statement to the buyer’s attorney

23.  The buyer’s attorney reviews the closing statement and, if necessary, provides revisions

24.  The lender’s attorney provides to the buyer’s attorney a list of checks, if any, required from the buyer

25.  The parties attend the closing (Note: The sellers’ attorneys have increasingly been declining to attend closings, resulting in the buyers’ attorneys having to forward checks via Federal Express)

26.  The buyer’s or lender’s attorney record the documents (Note: The lenders’ attorneys are increasingly declining to record, resulting in the buyers’ attorneys having to do so)

At our firm, in our representation of sellers, we have not altered our traditional duties, and we see other attorneys’ alteration of the same as a lack of professionalism, no matter the current market.