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Why should I retain an attorney to help me when I buy or sell a home?

 

A.  An experienced attorney can guide you through the process and help you avoid common mistakes, which can be costly down the road. They review documents, explain the process of buying or selling and explain your rights and obligations. The documents you sign in the process of buying or selling property are legally binding contracts. An attorney can help you negotiate and prepare the documents you sign making sure that they are legally correct and reflect your wishes.

 

Do I need to have an attorney review the Purchase and Sale agreement?

 

A.  It is important to have an experienced attorney review the Purchase and Sale agreement. It is a legally binding contract which affect the rights of both sellers and buyers.  An attorney working on your behalf will make sure that this important contract is legally and factually correct, and will make any necessary changes such as inserting contingencies you might wish to see added.   Once they are signed, the parties are legally bound by the terms of the Purchase and Sale agreement.

 

What is a title exam or abstract?

 

A.  A title exam is an examination of all records pertaining to the history of ownership for property. This process involves a review of records maintained at the relevant Registry of Deeds, as well as the relevant Probate Registry.  It can also involve a review of other matter related to the ownership of the property.  The title abstract is collection of the public records relating to the ownership of the property.  A title examiner researches the public records and collects the pertinent documents to determine ownership and whether there are any defects in the title to the property. For example if there is a mortgage on the property which has not been discharged by the recording of a proper discharge document, the outstanding mortgage is considered a defect in the title. The title abstract reveals what actions need to be taken to clear the title of any defects.

 

What is title insurance, why is it needed and what does it cost?

 

A.  A title insurance policy insures the title in the name of the purchaser of property. Title insurance companies issue title insurance policies in a contractual relationship with the insured person named in the policy. This type of insurance is designed to insure against financial loss related to the title, as well as the cost of defending the title in the case of a lawsuit. A purchaser of property will almost always be required to purchase title insurance on behalf of the lending institution from which the purchaser borrows money to buy the property.  This is known as the Lender’s Policy. The Owner’s policy is designed to protect the property owner from title defects.  You might wonder why it would be necessary given that a title examination is done prior to your purchase.  Even a meticulous search by a title examiner might not reveal hidden defects.  These defects may not show up for months or years.  For example a title defect that results from a forgery would not be revealed in a title exam, but would be covered by your Owner’s policy. The cost of title insurance is one time premium based on the value of your property.

 

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