The purchase contract is the most important step in purchasing a home. The details of this agreement determine what you buy or sell and how you buy it or sell it. Our firm’s real estate attorneys can help with this process. In any event, before signing, read the agreement carefully and consider the following:

1. Will the purchase be contingent on various matters such as the availability of financing on acceptable terms or the sale of the house which the buyer presently owns?
2. Exactly what land, buildings and furnishings are included in the offer? Are appliances, certain fixtures and other personal property included in the purchase price?
3. When can the buyer take possession? Are there any holdover tenants or parties in possession?
4. Is the seller required to provide good, marketable title? Marketable title is title that can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
5. Who pays for the examination of the title to the property in the event the offer is accepted? Who pays for the abstract of title or title insurance?
6. Have utilities been installed if the property is new construction?
7. Who pays for the cost of the survey of the property? Does the lender require a survey as a condition of the loan approval?
8. Should the purchaser conduct and pay for a separate home inspection?
9. What kinds of disclosures are a seller required to provide to a purchaser, and what happens if those disclosures are not provided?
10. If your offer is accepted, who bears the risk of loss if the property is damaged prior to closing?
11. What persons (such as husbands or wives) are required to sign and accept the offer?
12. What are the remedies if the buyer or seller defaults under the contract?
13. Are there real estate brokers involved? If so, who pays the commission?  Is the commission payable even if the sale does not close?
14. Whose responsibility is it to pay for governmental special assessments that arise prior to closing?
15. What type of deed will be conveyed?

A title examination is a study of the records related to the ownership history of the property and sometimes of other matters related to ownership interests in the property.  An abstract of title is a collection of public records relating to the ownership of a parcel of real estate.  During the examination, Our firm’s title examiners review the applicable title information pursuant to applicable state title standards to determine who owns the lands, whether there are any defects in or claims against the ownership and whether any action is needed to make sure the purchaser obtains good record title to the property at closing.

A title insurance policy insures the status of title in the name of the owner of the policy. Title insurance policies are issued by title insurance companies. The title company contracts with the insured person named in the policy to protect against financial loss related to the title, as well as the cost of defending the title in court. The title company searches and examines documents related to the ownership and items affecting the property prior to issuing a policy. It provides a source of indemnification to the named insured if he or she is damaged by a negligent or bad title search or examination and also from hidden defects that would not be discovered in a title search. For instance, a title defect resulting from a forgery would not be revealed in a search or examination of the public records but would be covered by the title insurance policy. The firm’s real estate attorneys are licensed title insurance producers, and can offer title insurance to its clients from top title insurance underwriters. Title insurance will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.

It is important that you carefully identify all parties taking title and how title is to be held.  States vary in how title may be held, but the following are examples of typical methods of holding title: 

1. Sole Owner. Under this approach, title is taken in the name of only one individual grantee and is freely transferable or subject to encumbrance by that grantee, subject to dower and/or homestead rights described below.
2. Joint Ownership with Right of Survivorship. Title can be taken in multiple names under this approach.  Each joint tenant owns an undivided interest in the entire property.  The “survivorship” language means that if one joint tenant dies, that person’s interest is automatically transferred to the remaining joint tenants.
3. Tenants in Common. Title held as tenants in common, like joint tenants, allows title of the entire property to be held in multiple names.  Title is also freely transferable or subject to encumbrance (as to the transferring tenant’s own interest) by each tenant.  However, there is no right of survivorship in the surviving tenants upon one tenant’s death.  Also, note that equal percentage ownership is presumed unless the deed specifically states otherwise.  For example, unless the deed states otherwise, if there are three grantees, each grantee will own a one-third interest.  It is always best to state each co-owner’s percentage ownership interest in the deed to avoid any uncertainty or misunderstandings.
4. Tenants by the Entirety. Title can be taken as tenants by the entirety only by a validly married husband and wife.  This form of ownership does not exist in all states.  As tenants by the entirety, neither tenant may transfer his or her interest to a third party or encumber the property without both parties joining in the deed or mortgage.  Upon the death of one party, the property automatically becomes the sole property of the surviving spouse.
5. Title Conveyed in Trust for the Benefit of the Purchasers. Under this approach, legal (record) title is transferred to a trustee (for example, the grantee would be “John Doe, as trustee under agreement dated June 1, 2005”).  Care should be taken in using this approach since there are more complex concerns involved.