Do I need a Lawyer When I Buy or Sell My Home?
If you are not familiar with real estate transactions or do not have a complete understanding of all of the paperwork involved in buying or selling a house, you probably need a lawyer. ONLY a lawyer and NOT a lender, title company or a REALTORŪ can give you legal advice. This pamphlet is intended to assist the home buyer and seller in assessing the need for an attorney and to foster the REALTORŪ - Lawyer roles and relationships.
HOW MUCH
WILL AN ATTORNEY COST?
There are no set fee schedules for attorneys, and individual attorneys
charge different fees for different services. Before you hire an
attorney, you should have the attorney explain to you in detail
what fees you can expect to pay. You may also wish to discuss limiting
the attorney's involvement in the transaction to only reviewing
the contract or reviewing the closing documents.
WHAT IF I
DON'T HAVE AN ATTORNEY?
If you don't have an attorney, there are many ways to find a good
attorney. You can ask your friends, ask your associates at your
job, ask your REALTORŪ, consult with the lawyer referral service
of the Colorado Bar Association or confer with a member of the Real
Estate Section of the Colorado Bar Association.
CAN I RELY
ON OTHERS?
-LENDERS
Since a lender wants to primarily protect its loan and security,
this position is normally compatible with that of the buyer. At
times, however, the lender's and buyer's interests may differ, or
the lender may not have the expertise or desire to protect the buyer's
interests.
-TITLE INSURANCE COMPANIES
Title insurance is defined as a policy of insurance which indemnifies
the holder for loss sustained by reason of defect in the title,
provided the loss does not result from a defect excluded by the
policy provisions. However, title insurance policies contain many
exceptions which could leave gaps in the buyer's protection.
-REAL ESTATE LICENSEES
The Colorado Supreme Court allows real estate licensees to prepare
contracts under specific circumstances in transactions where they
are in a brokerage relationship with a buyer or seller and receive
a commission. These must be standard contract forms approved by
the Colorado Real Estate Commission. Real estate licensees are not
attorneys, however, and cannot render legal advice.
WHEN SHOULD
I HIRE AN ATTORNEY
-Sellers, who decide to seek counsel, should do so before signing
a listing contract with a real estate licensee.
-Buyers, who decide to seek counsel, should do so before signing
an Exclusive Right to Buy agreement, if any, and in all cases before
drafting an offer to purchase. The purchase contract outlines the
rights and obligations of both the buyer and seller under the contract;
once the contract is signed it is usually too late to change.
FROM CONTRACT
TO CLOSING
The contract sets the scene for the remaining portion of the transaction.
Many issues need attention in the purchase or sale of a house. These
issues may impact your legal rights and responsibilities. An attorney
can help you address these issues during preparation or review of
the listing/sales contract and can aid in preparation for closing
or settlement. Although the following list is not exhaustive, it
highlights some of the areas to be considered and resolved.
inspections
loan documents
type of deed
tax agreements
utility agreements
indemnity agreements
prorations, such as taxes, insurance, utilities, homeowners assessments
prorations
well permits
occupancy
assumption and modification agreements
deeds of trust (mortgages)
releases of deeds of trusts
condition of title
subordination provisions
financing provisions
possible liens
easements
all-inclusive notes and deeds of trust
condominium documents such as declarations, articles, bylaws, rules
and regulations, etc.
protective/restrictive covenants
contingencies
closing documents
settlement sheets
tax certificates
surveys
improvement location certificates
promissory notes
payment terms
personal property inclusions
transfer taxes
disclosures
many, many others!!
COMMUNICATE
Clear communication among all parties and their representatives
is the key to a trouble-free real estate transaction. Complete sharing
of all information and pertinent documents will help your REALTORŪ
and lawyer do a better job for you and help you avoid later disputes.
When making the decision on whether or not to consult an attorney,
remember the advice printed on the standard and approved real estate
contracts in Colorado:
"THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES
SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING."
CONTRIBUTING ORGANIZATIONS
COLORADO
BAR ASSOCIATION
The Colorado Bar Association is a voluntary membership association
of Colorado attorneys, although not inclusive of all licensed practitioners.
The Association's purposes include advancing the legal profession's
service to the public through high professional standards and ongoing
educational programs. Cooperation with the real estate brokerage
industry and regulatory agencies includes the kinds of activities
that further those goals.
COLORADO
ASSOCIATION OF REALTORSŪ
The Colorado Association of REALTORSŪ is a voluntary trade association.
It is important to note that the term real estate licensee and REALTORŪ
are not the same. The term REALTORSŪ refers to a voluntary member
of the NATIONAL ASSOCIATION OF REALTORSŪ who agrees to follow an
extensive Code of Ethics. During membership orientation, REALTORSŪ
are advised to limit misunderstandings and conflicts by repeating
verbally the printed advice on contracts and to seek legal counsel
if the documents are not understood.
COLORADO
REAL ESTATE COMMISSION
The Real Estate Commission is structured in state government as
the Division of Real Estate within the Department of Regulatory
Agencies. The Division is charged with regulating the real estate
industry in Colorado. The primary objective of the Division of Real
Estate is protection of the public through education and licensing
of real estate brokers and appraisers and enforcement of the license
law. The Real Estate Commission should not be confused with the
Colorado Association of REALTORSŪ, a private organization composed
of industry members.
This information is provided as a service to the home buying and home selling public by the :
Colorado
Bar Association
1900 Grant St.
Denver, CO 80203
303-639-6873
Colorado
Association of REALTORSŪ
309 Inverness Way South
Englewood, CO 80112
(303)-790-7099
Colorado
Real Estate Commission
1560 Broadway, Suite 925 Denver, CO 80202
303-894-2166
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