A seller may employ a real estate broker to find a buyer for his or her property, or a buyer may employ a broker to find a suitable property. Either way, the broker has duties and obligations to the person who hired him or her, and is subject to rigorous state licensing standards. If an agreement to purchase the property is made, it is strictly between the seller and buyer; the broker is not a party to that agreement.
The agreement to sell between a real estate buyer and seller is governed by the general principles of contract law. The Statute of Frauds requires real property contracts to be executed in writing.
In addition, in order to sell a piece of real estate, the title must be marketable, i.e., free and clear of all encumbrances, liens, clouds, litigation risks, and other title defects. To ensure that the title is marketable, the buyer can employ an attorney or a title insurance company to perform a title search. The searcher maps a chain of title by examining the recorded deeds concerning the property and determines if there are any encumbrances on the property, such as mortgages, unpaid real estate taxes, liens for municipal improvements, unpaid federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants, or easements.
In order to pass title to the buyer, the seller must execute and deliver a deed with a proper description of the land. Many statutes require that the deed be officially recorded to establish ownership of the property and provide notice of its transfer to subsequent purchasers.
Most real estate transactions are financed through loans secured by mortgages on the property. A mortgage involves the transfer of an interest in land as security for an obligation, and is typically repaid in installments that include both interest and principal payments.
If mortgage payments are not made on schedule, the lender can foreclose on the mortgage and demand that the entire mortgage debt be paid immediately. If the borrower cannot pay, the property interest may be sold; however, the actual foreclosure process depends on state law, the terms of the mortgage, and whether other liens exist on the property. Many states allow late payments to avoid foreclosure, and many lenders work out payment plans with borrowers before resorting to foreclosure.
Numerous federal and state laws regulate the processes of acquiring, financing, developing, managing, constructing, leasing, and selling commercial and residential real property. Buying and selling real estate is generally more complicated than buying or selling other expensive goods, such as a car or boat: multiple people can have an interest in the same property, taxes are more complicated, and possession is not necessarily indicative of ownership.
We can guide you through all aspects of your real estate transaction, including the following:
We also represent clients in a variety of other real estate matters:
To discuss representation in any real estate matter, please contact our office at (310) 557-2001 today.