Should I use a lawyer?

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Submitted by Nicole on April 28, 2008 - 5:48pm

Hi there, I need some objective advice. My husband and I are in escrow on a house in Encinitas. It is a short-sale that we are trying to purchase. The bank is trying to force escrow quickly and we've been getting pressure to move more quickly than seems prudent. I at the point were I don't really feel like anyone is really looking out for our best interest and am looking for some help from people who know what to look out for.

I have one specific question- Should I hire an attorney to review the closing documents (I don't really know what to call them, i'm new at this). Any other tips about what to look out for during the closing process?

Submitted by patb on April 28, 2008 - 6:06pm.

Get a Lawyer you Fool!!!!

How many real estate contracts have you done? 2? 3?
How many does a Real estate attorney do every day? 6-7?

Nope, you need alawyer, when i bought my house, I asked
a local real estate lawyer to look at the terms, best advice he gave
me was to ignore the home warranty plan.

Said they suck, and they never provide what you need.

Submitted by sdrealtor on April 28, 2008 - 7:36pm.

Thats what your agent is for, hopefully you have a very good one. From my experience Real Estate lawyers are for when you have a serious problem and they have very little day to day involvement with residential home purchases.

FWIW, I have had many clients get major appliances and major repairs completed under home warranty plans. Sellers should insist on giving one to protect themselves against non-disclosure while buyers should want one to protect against unforseen repairs or items missed during the physical inspection.

Submitted by SD Realtor on April 28, 2008 - 9:25pm.

Nesposito if you feel that nobody is looking out for you then there is a serious problem with your representation. Call up your broker, NOT your sales agent, and explain to the broker that you want to come in for a meeting. Tell the broker what is happening, and that you want to sit down, IN PERSON with the broker, and have the broker explain ALL of the terms of the sales contract. There is not really such as thing as your closing documents. The purchase contract and associated disclosures are part of the documentation for the real estate transaction. The other pertinent documents are your loan documents which is really between you and the lender. Your purchase contract needs to be fully explained to you if you do not understand it all.

If after the conversation with the broker you still feel uncomfortable then yes call an attorney. I do agree with sdr that real estate attorneys usually are not simply to explain the purchase agreement. I would also presume that your agent used the standard CAR forms with possibly the short sale addendums and possibly the San Diego County addendum to the purchase agreement. All these are very standard and no matter what the seller or the sellers lender has said, those documents bind both parties and so do the dates that are on those docs.

So... take a breath, call the broker, go to the office, sit down and have him review EVERYTHING. Then see how you feel.

SD Realtor

Submitted by Nicole on April 28, 2008 - 10:50pm.

sdr, SDR, and pat-

thanks to you all for your response. The explanation of all the documents was very helpful. So there is the purchase contract and the dislosures and the loan docs, right? I'm very comfortable with the disclosures which we reviewed thoroughly, I will take a look at the purchase agreement and be sure I understand everything there too.

I will take a deep breath and hopefully will feel better about the process soon.

Here's so more background regarding why i panicked a bit this afternoon. The escrow company called and said I need to drop everything and starting signing a bunch of papers today so that we can close on Thursday. (I'm not what exactly needed so be signed) But the point is WE HAVEN'T EVEN COMPLETED THE HOME INSPECTION OR SEEN THE TERMITE REPORT. I called my realtor and he initially said "You can go ahead and sign to keep everyone happy and ask for an addendum saying that you can back out if the inspection turns up anything." I was baffled by this advice and thought, well I'm no lawyer, but that doesn't seem wise. So I had my husband call him back (I thought he needed a man to man talk) and tell him that was not in our best interest and that we needed him to advocate for us. The bank is trying to demand that we close sooner and as far as I understand it they're not in a position to make any demands (there's no NOD on the home)

We are supposed to have 17 days to close according to our offer, not to mention the fact that we couldn't remove our contingencies any earlier because the seller had the utilities turned off and they won't be back on 'til Tues (which delays the inspection until Wed). Sorry to blab on and on... You're right, i need to take a deep breath.

Another thing, I don't have a broker. We went straight to the loan officer at San Diego Credit Union, is that who I should have review it?

-nicole
new house hunter

Submitted by TemekuT on April 29, 2008 - 10:00am.

Hi Nicole:

I have quite a few years experience working in real estate in several different capacities and have seen a lot of different situations. If I understand you correctly, you have no representation and are somewhat naive as to the process of purchasing a resale. The listing agent represents the seller and will do whatever the bank wants done at this point to push the sale to a close and collect the commission. And, probably since you have no agent, the listing agent is receiving the entire commission and is even more motivated to push this deal through even though you haven't received all the inspections and disclosures.

If you were my relative, I would at this point advise you to pay a broker a fee to advise and guide you through the remainder of the process. I'm not so sure you need a lawyer as an experienced broker should be able to read and decipher the clauses in the boilerplate contract the bank is probably using. You need to make sure you don't do anything like sign away your rights and end up with a major defect like a cracked slab, a cloud on title, etc.

You might consider contacting any one of the 3 realtors that post to this sight - SD Realtor, sd realtor, and Jim Klinge - to see if you can arrange a fee based short-term arrangement. I'm also a broker (not in the resale business) and I see them all as ethical and informed and they appear to put the clients' interests at the forefront. Do not rely on the loan rep - their interest is to close the loan and get the commission. And do not just arbitrarily select some broker. You can google Jim, and I think SD Realtor's e-mail is floating around this website in several locations, adam something or another. I don't know exactly who sd realtor is. Perhaps some other Piggintonians can supply the e-mail addresses.

I recall you are an M.D. so think of this as a consultation fee. Best of luck to you.

Submitted by EconProf on April 29, 2008 - 10:07am.

BobS
TemekuT is correct, but way too gentle in suggesting you get immediate professional advice. No one in this deal is looking out for you, or even has the incentive to look out for your interests. There are several red flags waving and it really appears you are being rushed so as NOT to get outside advice.
Right now, you have the power. Start signing papers and you lose that leverage. Run, don't walk, to get outside, impartial third party advice.

Submitted by SD Realtor on April 29, 2008 - 10:42am.

Hi Nicole -

Sick in bed today...

Actually you do have a broker. The realtor who is representing you works for a broker. This is the broker I was referring to. Don't confuse the financing process with the real estate process. So you are financing through the credit union. Understood.

Again, your realtor works for a broker. Concerns such as yours should go directly to the broker if you are indeed not happy or anxious about what is going on. Have your broker thoroughly review the contingency removal process and why your contingencies should remain in place due to what you have posted. Make sure any addendums are properly signed to extend the contingencies. Again, if something goes wrong with the transaction, the broker is liable so it will be in his best interest to make sure you are serviced correctly. Unless he is a poor broker. Also since you are under contract with him, it really would not be proper for any other realtor or broker to interact or review docs for you. I got my hands slapped here (rightfully so) for offering that up.

Anyways go to the broker first, or ask hubby to, then measure the situation. If you still are not comfortable then call an attorney.

SD Realtor

Submitted by TemekuT on April 29, 2008 - 10:59am.

Nicole, SD Realtor is correct. I went back and read the post and you do state that you have a realtor who in turn has a broker. I failed to see that in the first quick reading. And SD Realtor is correctly informing you to go to your realtor's broker.

My fault for the quick perusal and answer while returning phone calls this morning.

Submitted by Nicole on April 29, 2008 - 4:24pm.

Wow, I can't believe how little I know about all this. So, I have a broker, eh? Who knew! Thanks for helping me and not making me feel like an idiot. The information was very helpful particularly all the clarification regarding the different documents- I see what you mean by not confusing the loan docs with the real estate docs.

I called my agent again and had him go through it all again with me to clarify everything. He said that we should be getting an extension of the banks approval in writing shortly. I'm feeling much more comfortable with things and will go straight to the broker if things seem to be breaking down again. This real estate stuff can be quite a roller coaster. The home inspection is tomorrow and there are some repairs being done today from some "minor" termite damage. The termite thing freaks me out a bit. We're on schedule to close next week.

-nicole
new house hunter

PS - hope you feel better soon SDR

Submitted by NotCranky on April 29, 2008 - 5:06pm.

"He said that we should be getting an extension of the banks approval in writing shortly."

If you had already locked your loan find out if this is going to change your lock. Rates have gone up in the last few weeks. If it is going to change your "lock" compare rates and find out how long you have to close and preserve your "lock" if it is indeed lower than today's rate. My guess is that nobody locked the rate for you ... We are talking about a pretty significant difference in your mortgage over several years, depending on the facts.

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