This phrase is a part of each real estate contract and must be taken very seriously. Essentially, it means that the deadlines that are reflected in the contract are just that – deadlines. They are not mere suggestions. Accordingly, every step or requirement must be addressed immediately.

If the contract states that the buyer must apply for a mortgage within five days, then you must do so. You must be vigilant in securing all necessary documentation and conveying it to the lender as soon as possible. You should periodically review the lending process to monitor the loan progress and be able to reasonably predict when the loan might be approved.

Today’s real estate market requires a sense of urgency. As your attorney, Arthur J. Murphy can help to monitor important transaction milestones so you don’t get “caught in the switches.”

What kind of property do you want? Real estate is an important investment, and the search for an appropriate property that suits your goals begins with knowing what you want to achieve as a property owner. Once you have a clear picture, talk to several real estate professionals specializing in the type of property you are looking for. All agents are not equal in terms of their knowledge and expertise, so choose wisely before you decide who you want to work with.

A good agent listens well, has time for you, and guides you without making decisions for you. There are buyer’s agents, seller’s agents, and agents that work for both. Some primarily sell houses and condos. Others specialize in investment properties.

If you choose to call on a listed property directly, be aware that the real estate agent works for the seller, so anything that you tell him or her is potentially going to be relayed to the seller. Make sure you know up-front whose interests the agent is representing.

Tip

It is probably best to retain your own buyer agent to represent your best interests in the transaction. As your attorney, Mr. Murphy will work in conjunction with your personal buyer agent to ensure your best interests are being addressed.

Note that Mr. Murphy can also refer you to a trusted and experienced real estate agent.

Consultation with a bank, lender, or mortgage broker is probably the most important initial step you can take in terms of your real estate search. You should do this even before you begin looking at specific properties. Don’t waste your time looking at properties listed at prices above what you can potentially borrow.

If you are working with a good buyer agent, they should be able to recommend several good loan officers. That said, the ultimate decision about whom to use is always up to you. However, no matter who you choose, it is wise to get pre-approved before starting your search.

Tip

Pre-approval is proof of your buying power, which can give you an advantage when you are among several buyers pursuing a property. This is especially crucial in today’s frenetic market. Sellers look more favorably upon offers from pre-approved buyers.

If it all seems overwhelming, fear not. Consulting a real estate attorney, such as Mr. Murphy, early in the buying process, even before you sign a contract, helps ensure a smooth closing day.

Because the contract defines what happens at closing, an attorney is very limited in how much they can help if you simply ask them to “show up at closing.” At that point, the game is basically over. Countless latent problems can arise in a real estate transaction, and many may not even be evident until after the closing.

Examples of Unforeseen Problems

• You pay unnecessary taxes or expenses because contract terms were not negotiated in your favor.
• The title to the realty is taken in a way that is inconsistent with your needs or your future plans for the property.
• The improvements you planned, such as building a garage or erecting a fence, will not be allowed.
• A purchase contract is not enforceable, complete, or consistent with what you originally intended.
• There is a lien on the property that will interfere with your subsequent sale of the property.

Tip

When you hire an attorney, such as Mr. Murphy, for a real estate transaction, be sure they are experienced in this area of the law. You might be tempted to hire your brother-in-law or your nephew who just graduated from law school. In the long run, however, this is one of the biggest purchases you will probably make in your life. The least you should expect is that the attorney you hire is proficient with handling real estate transactions.

Do not hesitate to inquire as to the potential attorney fees. Some attorneys may charge you a flat fee for the entire transaction, while others will charge you an hourly fee. Be aware that you often get what you pay for, and the least expensive attorney is not necessarily the best choice. One way or the other, you are the client and have a right to know. If the attorney refuses to discuss fees, find another attorney.

A reminder that Mr. Murphy is perfectly willing to offer a free initial consultation, so please don’t hesitate to call.

Fixed Rate Mortgage

With a Fixed Rate Mortgage, your interest rate stays the same or “fixed” throughout the term of the loan, which usually lasts 15 to 30 years.

Adjustable-Rate Mortgages

Also called ARMs or adjustable, these mortgages typically start with a lower interest rate that stays fixed for a specified time and then adjusts periodically. It rises or falls depending on changes in the market interest rate. Your monthly payments will also fluctuate.

VA, FHA, & FmHA Mortgages

If you have less than 20% for a down payment, ask your lender about the following mortgages:

• Veterans’ Administration (VA)
• Federal Housing Administration (FHA)
• Farmers Home Administration (FmHA)

They can offer competitive interest rates and require little to no money down. Note that not everyone will be eligible to apply for these types of loans.

Be careful to understand exactly what items of personal property are being sold along with the real estate. Every item being conveyed, such as appliances, window treatments, chandeliers, and alarm systems, must be specifically noted on the contract. Do not assume that the refrigerator or window air-conditioners are part of the deal unless they are listed on the contract.

This is the date that the seller will be vacating the property. Will they convey possession to you on closing, or do they intend to remain in possession for a certain period?

If it is a multi-unit building, are there leases to which the property is subject? You might have unpleasant surprises at closing, such as having a remodeling crew standing by only to discover that possession will not be tendered at closing or several long-term leases are in place.

Certain clauses can be a sort of escape clause that can favor one party or the other. The standard contract will not automatically include every provision specific to your needs and requirements. They must be added.

In addition to ensuring you are protected; your real estate attorney can spell out all your legal rights and monetary obligations and insert any contingency clauses. for the following are some examples of contract contingencies.

Financing

Also referred to as the mortgage contingency, this particular clause makes the contract dependent on the buyer receiving a mortgage commitment by a certain date. It specifies cancellation rights and requires the return of any earnest money deposit if you can’t arrange adequate or acceptable financing. This is a very important clause.

Property Inspection

This clause allows you to have a professional inspector inspect the property at your own expense to reveal any hidden structural or mechanical problems. If you are not satisfied with the property’s inspection report, this clause may allow you to negotiate for repairs. It can also allow you to opt out of the contract altogether if the defects are major.

Tip

The contract usually calls for the inspection to be performed within a set timeframe, such as ten days. To take advantage of this provision, you must act quickly. Some inspection clauses specify what kind of defects will be actionable or may place a monetary limit on any repairs.

Prior Real Estate Sale

If you are moving up, this clause allows a specific timeframe for you to sell your current property. However, it also usually permits the seller to continue to show the subject property in the interim, so you could be shut out by a subsequent bidder.

Clear Title

You want a clear and marketable title to the property. If there are title defects, you can withdraw from the deal.

Attorney Approval

This allows your attorney to review the contract even after you and the seller have signed it to negotiate any revisions with the seller’s attorney. However, there are usually limitations to what an attorney can do. For example, the attorney cannot change the price. The closing date is often not subject to revision either.

The closing, also known as settlement, is when the seller gets paid and you get the keys. As you are wading through all the paperwork, it is impossible to read every word of everything you are signing. If you tried, your closing would take a week.

That is why you need the peace of mind a real estate attorney, such as Mr. Murphy, brings to closing day. They know what all the paperwork means and, more importantly, what it means to you.

Tip

Be on time for the closing. In addition to you and the seller, other participants on hand may include the attorneys, real estate agents, a mortgage broker or loan officer, and the closing agent from the title company.

They have set aside their time for this particular closing, and it is common courtesy and good business to appear at the appointed time. Additionally, the title company only allots a certain amount of time to close each deal. If last-minute problems arise with some aspect of the transaction, there will be time enough to work them out to everyone’s satisfaction.