PURCHASE AND SALE AGREEMENT

One of the first documents given to a prospective buyer by a real estate agent/broker is the purchase and sale agreement or contract. Few people realize that this paper is the most important step in purchasing a home — the details of this agreement determine the terms of your purchase. Detrimental provisions in the contract may not be corrected or avoided later in the transaction, so the best time to retain an attorney is before the contract is signed. Before signing, read the agreement carefully. The law usually requires judges to treat you as if you read every word of a document before you signed it, so you should try to read everything carefully before you sign a document.

WARRANTY DEED

A warranty deed is a conveyance of title plus some warranties or guaranties. The usual guaranties or warranties by the seller are: good title, freedom from encumbrance other than as excepted, possession to the buyer and a promise to defend title.

These guaranties alone are not adequate protection, because they are no better than the present and future financial responsibility of the seller. A warranty from a financially responsible seller is comforting and desirable but is not a substitute for a title examination and title insurance. Title defects have a way of lying dormant for years and perplexing a buyer long after the property has been paid for and the seller has disappeared or died.

TITLE INSURANCE

R. Seth Mann, P.A. can obtain for you an owner’s policy of title insurance through a local title insurance company. In such a policy, the title insurance company contracts with the insured person named in the policy to protect the title as insured against financial loss and the cost of defending the title in court.

But like any insurance policy, the coverage is no greater than as stated in the policy. Any policy can list matters substantially affecting title that are exceptions to the coverage and are not insured. Another type of policy, mortgagee’s or lender’s title insurance, protects only the holder of the mortgage and not the owner. You should not forgo owner’s title insurance coverage because your lender has its own loan policy. In fact, obtaining both the owner’s and lender’s title policies at the same time is not much more expensive than obtaining a single policy.

CLOSING YOUR PURCHASE

Closing a real estate sale is a technical and complex procedure. The careful drafting of papers to carry out the actual intent of the parties is part of the job. Meeting the technical title requirements is another step. The proper signing and acknowledgement of papers is another. Delivery and recording of the papers are usually the last steps.

As a careful buyer, you should insist that your lawyer be present at the closing, checking each detail to assist you in making your purchase the trouble-free ownership to which you are entitled.