After finding the ideal property to purchase, what are the next steps? Engage an attorney. A well-chosen attorney will help real estate buyers to navigate the entire process, not just the legal issues.
Attorneys can help to connect real estate buyers with key service providers in order to arrange:
- financing;
- an appraisal;
- a home inspection; or
- home insurance.
For a smooth and timely transaction, the buyer's attorney should have a good working relationship with:
- the lender;
- the broker;
- the land appraiser;
- the home inspector; and
- any other key service providers.
The buyer's attorney should help to pull all of the pieces together and keep everyone who is involved on track.
Ideally, an attorney should vet the following documents on behalf of the buyer before they are signed:
- offer letters;
- purchase and sale agreements;
- construction agreements;
- loan facility letters; and
- any other key documents.
It is important that the buyer's attorney knows and understands the real estate buyer's goals and objectives. Involving the attorney early makes it easier to identify any potential issues at the outset of the transaction before a binding agreement is entered into.
Where financing is required, the buyer's attorney should have a clear and full understanding of the proposed transaction and how this may affect the structuring of the loan. This is especially true where land is being acquired in conjunction with a separate construction agreement for improvements to be built thereon. There are special factors to consider in construction financing. For example, the attorney should review the proposed credit facility letter to ensure that the loan is structured to fit the specific needs of the property that is under construction. If the credit facility letter is agreed without the benefit of legal advice and, issues are identified after the fact, this may lead to delays as certain terms will have to be readdressed with the lender and may even result in amendments to the credit facility letter.
Therefore, it is best to engage an attorney:
- once the ideal property has been found;
- once the substantive terms have been agreed with the seller; and
- before any negotiations take place and any purchase and loan documentation is signed.
A well-chosen attorney will:
- map out the transaction;
- identify any real and potential issues upfront; and
- connect the buyer with the right people.
Engaging an attorney will make the difference between a smooth transaction that meets the expectations of the buyer versus one that is fraught with issues, unrealistic expectations and other obstacles which could have been avoided with the benefit of early advice and proper planning.
For further information on this topic please contact Chelon Carr-Newbold at Lennox Paton by telephone (+1 242 502 5000) or email ([email protected]). The Lennox Paton website can be accessed at www.lennoxpaton.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
