INFORMATION ABOUT
BUYING AND SELLING
RESIDENTIAL REAL ESTATE

For most people, the most complex transaction they will ever be involved in is buying or selling a home. The questions and answers that follow discuss some of the main parts of the purchase or sale of residential real estate.

It is hoped that the information provided here will be helpful to you in familiarizing yourself with residential real estate issues and terms. Nothing provided here, however, is a substitute for advice of competent counsel. In addition, residential real estate transactions are subject to varying laws and customs in each jurisdiction so some of the information in the Web page may not be correct for your jurisdiction.

HOW DO I LIST MY PROPERTY FOR SALE?

The most effective way to sell your property is to list it with a licensed real estate broker. Real Estate brokers typically charge a commission equal to a certain percentage of the sale price of your home. The Realtor will ask you to sign a Listing Agreement before undertaking any steps on your behalf. The Listing Agreement is a legally binding document that sets forth the duties and responsibilities of each party. You should have the Listing Agreement reviewed by an attorney before you sign it. Your attorney will make sure you fully understand what the Realtor promises to do and what your obligations are.

DO I NEED AN ATTORNEY AND IF SO, WHEN?

A residential real estate transaction involves numerous documents, various parties and a lot of money. There are a number of things that can go wrong before settlement that can cost you a great amount of money and/or kill the deal. An experienced real estate attorny protects your rights, advises you on the best way to resolve questions that come up along the way and makes the whole process much less stressful. While some people buy and sell homes without the assistance of an attorney, we believe that having an experienced attorney on your side before you sign ANYTHING is well worth the fee. This is especially true if you are purchasing new construction or dealing with a "difficult" person on the other side of the transaction.

WHAT IS AN AGREEMENT OF SALE?

An Agreement of Sale is a written document that sets forth all of the buyer's and seller's rights and responsibilities up to and beyond the time of settlement. DO NOT SIGN an Agreement of Sale without proper legal advice. THE AGREEMENT OF SALE IS THE SINGLE MOST IMPORTANT DOCUMENT CONNECTED WITH THE REAL ESTATE TRANSACTION. There is no such thing as a "standard contract," because each deal is different and the contract usually requires special modifications to suit your individual circumstances.

IS THE AGREEMENT OF SALE A BINDING CONTRACT?

After the Agreement has been signed by the buyer and seller, it is a binding contract and may not be changed without both parties' consent. We recommend that the buyer or seller consult with an attorney prior to signing an Agreement of Sale, so that his or her interests are protected.

WHAT USUALLY HAPPENS AFTER THE AGREEMENT OF SALE IS SIGNED AND SETTLEMENT OR CLOSING?

After the Agreement of Sale is signed, a number of important things happen. If you are buying a home, you must apply for a mortgage and order title insurance. The seller's title must be searched and a new deed prepared. Documents must be assembled and when these steps have been completed, closing must be scheduled. In addition to these "normal" things, unusual problems may arise which often must be resolved before settlement. Finally, all the documents must be reviewed to make sure they are accurate and comply with the terms of the Agreement of Sale.

HOW DO I GET A MORTGAGE?

Today's fluctuating interest rates have caused many different types of mortgages to become popular, including fixed rate, ARMS and balloon payments. You may apply for a mortgage at a bank or through a mortgage broker. In most areas, a weekly listing of the mortgage rates from the prior week may be found in your local newspaper. Even before the time you actually submit your application, you should start to review the existing mortgage rates, and keep an eye on whether they are increasing or decreasing. This becomes significant once you actually apply, so you may as well try to get the best rate you can. Your Realtor and Attorney may be able to help you in this regard. After you have received your "mortgage commitment," your attorney will review it with you, estimate the expenses you will incur at settlement, and review the other documents for possible "hidden" costs. Your attorney will also make sure that your mortgage company's "conditions" are met.

WHAT GENERALLY OCCURS AT SETTLEMENT OR CLOSING?

Also known as "closing," settlement is the time the deed is executed, conveying title from seller to buyer. It is where all financial documents, including the mortgage and related forms, are executed by the buyer, and where funds are disbursed to the seller. Your attorney will be able to represent your interests in any negotiations, explain all documents related to the mortgage and conveyance of title and make sure that you are only incurring expenses which are actually required.

WHAT OTHER IMPORTANT ISSUES SHOULD I KNOW ABOUT?

Title Insurance

Title Insurance, required by all mortgage lenders, protects the buyer in case someone has a prior claim to the property you have purchased. The buyer pays a one time premium at closing that is based upon the purchase price of the home.

Home Inspections

If your Agreement of Sale provides for it, the buyer may engage the services of a qualified home inspector to check out the physical condition of the house. Your attorney may protect your interests in the event the Home Inspection Report reveals "problems" with the house. In addition to an inspection of the structural condition of the house, you should also consider having the home checked for lead paint if it was built before 1977. In certain parts of the country, you should have the house checked to see if radon, a colorless, odorless gas that can cause cancer, is present.

Other Documents

It may be necessary to obtain miscellaneous documents such as City or Township Certifications, Certificates of Occupancy, mortgage payoff statements, plumbing, heating, and roofing certifications, etc. Your attorney will explain the necessity of these documents and, if necessary, help you obtain them.

For your information, the following booklets are available free from the Attorney General's Public Protection Division by telephone request at 1-800-441-2555: "Know Your Rights: Buying a Home" and "Know Your Rights: Selling a Home".

DESSEN, MOSES & ROSSITTO is happy to assist you in any legal matter that involves either Pennsylvania or New Jersey, the two states in which our attorneys routinely practice. If you wish to contact us for more information concerning this field of law or any other in which we practice, please send us an E-mail message and we will be happy to try to assist you.

LINKS TO OTHER INTERESTING INFO

AAA National Mortgage Directory
Bay House Mortgage & Real Estate Page
Chris Webb's Extensive Page of Insurance Links
Complete Glossary of Insurance Coverage Explanations
Department of Housing and Urban Development
Federal Emergency Management Agency (FEMA)
Home Buyer Real Estate Service
Home Scout Internet Real Estate Search Directory
Homebuyers Fair - Real Estate Sales & Financing
Homeowners Finance Center
How to Sell Your Own Home
HSH Listing of Current Mortgage Rates
Insurance Terms - Auto, Life, Health and Property
Mortgage Loan Information Network
PA Association of Public Insurance Adjusters
Real Estate Web Marketing Center
Residential Real Estate for Sale by State
Remax RE Brokers
World Wide Real Estate Network

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INFORMATION ABOUT BUYING AND SELLING RESIDENTIAL REAL ESTATE