An Attorney's Role in Buying or Selling Your House

Purchasing a home is the single largest transaction ever entered into by the average family in an entire lifetime. Because of its size, the transaction must be handled with skill, expertise and great attention to detail. Typically, then, you will choose an attorney to handle this transaction for you. The attorney's work will begin long before closing and continue until all matters to be handled by him are completed, including the title search, document preparation, and attendance at closing and recording of instruments. The following defines some of the more important terms relative to the purchase or sale of your home.

Title Search

In order to ensure that the current owner has good title to the property being sold, an examination of title is made of the public records of the parish in which the property is situated. The examination is not limited merely to the time during which the current owner occupied the property, but will encompass a preceding period. In addition to determining ownership, the title search will uncover all liens, encumbrances, covenants, easements, rights-of-way, and similar matters recorded which affect the property.

Title Insurance

Your real estate purchase contract will generally require the seller to provide some evidence of title. The most common form is title insurance which insures against hazards inherent in real estate titles but which may not be apparent from the title search. Title insurance protects the purchaser against loss from any undisclosed claim covered by the policy arising out of the past to threaten the purchaser's ownership of real estate, in addition to advising the purchaser as to the status of the title to the land which the purchaser is buying, which can be discovered from the public records so that any defects in title may be corrected before the transaction is closed. Title insurance is an uncommon form of insurance in that there is only one premium paid (at the time of closing). Typically the cost of title insurance is paid by the purchaser.

Financing

Almost all real estate transactions require some form of financing. The typical example is one in which a bank or savings and loan association advances seventy to eighty percent of the purchase price and obtains a first mortgage lien on the real estate. Another typical example is one in which the seller advances a portion of the purchase price and obtains a first or second mortgage on the real estate. n either or both events, the purchaser will be required to execute a mortgage note in favor of the individual or institution to secure payment of the monies advanced. The mortgage will be recorded in the parish in which the real estate is situated and will become a lien on the real estate until such time as the mortgage is paid in full. In the past, is was common for lending institutions to loan money for lengthy periods of time at fixed interest rates. However, adjustable interest rate mortgages have now become common and generally call for an increase or decrease in the interest rate charged the purchaser on an annual or bi-annual basis. Whether you are confronted with a fixed rate mortgage or an adjustable rate mortgage, the expertise of someone knowledgeable and familiar with these documents is required to provide you with a full understanding of the agreement that is being made with the lending institution.

Settlement or Closing

Once financing has been approved, your real estate agent will coordinate a time and place for closing. At the closing, a settlement statement will have been prepared indicating the manner in which funds will be disbursed regarding your real estate transaction. The seller will deliver to the purchaser a title to the premises, which is the instrument by which legal ownership of the property transfers. The purchaser will deliver the purchase price to the seller and execute the necessary financing documents, if any. After the closing, the title will be recorded among the public records of the parish which the property is situated.