Consumer Homes.

Question:

> >Hell, I’ve done it three times. The worst that could >happen is that you’ll wind up broke for a little while. >Not everybody wears both a belt and suspenders. > Um, no, the worst that could happen is that you’ll fall behind on the > mortgage payments, the bank will foreclose on your mortgage, you’ll go > bankrupt and have no place to live, and the stress will break up your > family and cause health problems.

And all this from being overextended because of scraping every spare nickel up for the downpayment! Ha! > And yes, there are people to whom all those things happened because > the overextended themselves when buying a house.

I bet there are more people who overextended themselves on a downpayment with everything coming out OK. Actually, the worst that could happen is that a meteor hit me while I’m crossing the street. You sound like my old grandma, who never did anything unless it was 100 percent guaranteed. Not much insecurity in her life, but she died anyway. To each his own, but I’m glad I can take a flyer every once in a while. TR

Response:

>A closing attorney can be kind of like fire insurance.  Most people >pay for it, but never "need" it as their home doesn’t burn down.  But >if it did, they’d wish they’d had it.  Most sales go through >routinely, but sometimes *stuff* happens.  I have seen closing table >disputes and threats to walk, etc.  I have read the posts from people >calling for help here after it was too late. >-v.

A closing attorney only represents the finance company’s interest,  neither the buyer’s nor the seller’s.  Both sides will usually split the cost but it is negotiable.   If you want someone to represent you and your interests,  hire your own attorney.  Afterall,  it’s probably the largest investment you will make in your life.  Spend a few hundred dollars and do it right. Trip

Response:

>A closing attorney only represents the finance company’s interest,  neither the >buyer’s nor the seller’s.

You are confusing the issue.  The attorney hired by the lender is not the only attorney referred to as the "closing attorney."  Any attorney which is hired to help any of the parties to the transaction and is involved in the closing is a "closing attorney."  It should be obvious that we’ve already been discussing an attorney hired by the buyer to represent the buyer’s interests.

Response:

I used an attorney to draw up my contract 6 months ago.  It cost $500 and it saved me $800 for things he put in it that a "Standard" contract doesn’t have.   So,  I saved $300 plus I had someone who was representing me if anything went wrong.  I also had someone to go back on if the contract was somehow flawed.  I also didn’t have the Realtor’s clause that lets them off the hook for anything and everything. Trip – Hide quoted text — Show quoted text ->All this business about hiring an attorney for a home purchase has got me >wondering. I am looking at buying a house soon, but I wasn’t planning on >using an attorney. What the heck does the attorney do? Seems that all the >forms are pretty standard real estate "offer" forms, etc. What does it >usually cost to use an attorney during a home purchase? Also, who has used >an attorney during a home purchase and it saved their butt? (I wanna hear >the stories!) >Jeff > All, > I’m almost reluctant to post this out of shame.  Seems my brother and > his wife have decided to purchase their first home w/o the aid of an > attorney.  They’re supposed to be closing this Fri. > Best as I can tell their home inspection went OK with one item, leaky > pipe in the basement, that the seller is refusing to repair.  Methinks > with an attorney a properly worded letter could have had this repair > fixed. > Seeing that they don’t have an attorney, should it be any surprise > that they received a letter last week from the seller’s attorney > suggesting they bring an additional $2k to the closing?  Hmmm.  Now > they’re stuck.  They don’t dare ask me for cash since we’ve been > down this road before. > I can’t imagine what this request is for but my thinking is that > any/most costs can be rolled into the cost of the loan.  I remember > buying my first home with a VA loan back in ‘92 for $650. > What amazes me is that they’re willing to put $140k at risk for a > home purchase, their first home, but can’t swing an additional $250 > for an attorney!  Had I known this upfront… this would have been > their house warming gift from me.  Too late now. > I wish my bro and his wife good luck with this purchase… but I feel > they’re in for a "learning" experience.

Response:

>… who has used >an attorney during a home purchase and it saved their butt?

A closing attorney can be kind of like fire insurance.  Most people pay for it, but never "need" it as their home doesn’t burn down.  But if it did, they’d wish they’d had it.  Most sales go through routinely, but sometimes *stuff* happens.  I have seen closing table disputes and threats to walk, etc.  I have read the posts from people calling for help here after it was too late. Involve your attorney BEFORE you sign the purchase offer or contract. After the contract is too late to get that advantageous term added or the disadvantageaous one struck.  In my area, the "standard" form has a clause that I ALWAYS change, but I have enough experience to know about it. Just because a contract is pre-printed does not mean it is either fair, or that it can’t be changed or negotiated.  (A music company rep once told me that they had over a dozen versions of pre-printed contracts; the most gullible bands would sign the first one thinking it was "standard" whereas they could do much better if they only asked.) All that said, I realize that there are states where it is not customary to use an attorney on a residential deal, or for both sides to use the same attorney.  I am just not comfortable with that. -v.

Response:

All this business about hiring an attorney for a home purchase has got me wondering. I am looking at buying a house soon, but I wasn’t planning on using an attorney. What the heck does the attorney do? Seems that all the forms are pretty standard real estate "offer" forms, etc. What does it usually cost to use an attorney during a home purchase? Also, who has used an attorney during a home purchase and it saved their butt? (I wanna hear the stories!) Jeff

– Hide quoted text — Show quoted text -> All, > I’m almost reluctant to post this out of shame.  Seems my brother and > his wife have decided to purchase their first home w/o the aid of an > attorney.  They’re supposed to be closing this Fri. > Best as I can tell their home inspection went OK with one item, leaky > pipe in the basement, that the seller is refusing to repair.  Methinks > with an attorney a properly worded letter could have had this repair > fixed. > Seeing that they don’t have an attorney, should it be any surprise > that they received a letter last week from the seller’s attorney > suggesting they bring an additional $2k to the closing?  Hmmm.  Now > they’re stuck.  They don’t dare ask me for cash since we’ve been > down this road before. > I can’t imagine what this request is for but my thinking is that > any/most costs can be rolled into the cost of the loan.  I remember > buying my first home with a VA loan back in ‘92 for $650. > What amazes me is that they’re willing to put $140k at risk for a > home purchase, their first home, but can’t swing an additional $250 > for an attorney!  Had I known this upfront… this would have been > their house warming gift from me.  Too late now. > I wish my bro and his wife good luck with this purchase… but I feel > they’re in for a "learning" experience.

Response:

is rumored to have > said: >> Hopefully you’re not implying that this home

purchase will leave them >> with cash reserves <=$2000?  If so, they have

bigger problems than just >> not having decent representation at the closing. > I think this might not be too uncommon.  When I

bought my first home in > 1983 I had about, oh, $25 left over after the

closing.  Ate spaghetti > for a few nights until my next paycheck!  But it

was worth it, sold the > house 2 1/2 years later for more than twice what I paid for it. > Well, glad it worked out for you, but I would never max myself out like > that.

Hell, I’ve done it three times. The worst that could happen is that you’ll wind up broke for a little while. Not everybody wears both a belt and suspenders. TR

Response:

>Hell, I’ve done it three times. The worst that could >happen is that you’ll wind up broke for a little while. >Not everybody wears both a belt and suspenders.

Um, no, the worst that could happen is that you’ll fall behind on the mortgage payments, the bank will foreclose on your mortgage, you’ll go bankrupt and have no place to live, and the stress will break up your family and cause health problems. And yes, there are people to whom all those things happened because the overextended themselves when buying a house.

Response:

> Hell, I’ve done it three times. The worst that could happen is that > you’ll wind up broke for a little while. Not everybody wears both a belt > and suspenders.

Or, the roof could get severly damaged in a windstorm and you won’t have the money to get it repaired, or even buy a tarp to cover it until the insurance co. takes care of things. Or your ‘fridge will go kaput and you won’t be able to buy a new one (or even a used one) and then all your cold food will rot and then you’ll have to buy a new ‘fridge *and* $200 of groceries (of course someone with only $25 to their name would probably only lose 3oz of orange juice and some old mustard). Or you could get laid of, even temporarily and not people to afford your house/car/insurance/whatever payments. etc, etc…

Response:

Boy I had a hard time deciding to buy my lastest home.  Even after doubling my payment from my old house I still live on about 2/3’s of my salary (enought to support a family if I ever get married and have a family).   I do know a lot of friends who are "maxed" out and mortgage poor.  It is a lot of stress,  especially when they start using their credit cards to buy the things they "need" but can’t afford to pay cash for. Trip says… – Hide quoted text — Show quoted text ->> Hopefully you’re not implying that this home purchase will leave them >> with cash reserves <=$2000?  If so, they have bigger problems than just >> not having decent representation at the closing. >I think this might not be too uncommon. >Quite common.  One hears of people freaking out because the closing is >coming in a little higher than they expected and they can’t come up >with the money. Or having to close at a certain time of the month or >they can’t make it. >I worry about folks who borrow the max that the bank will let them >have and/or buy the most expensive house that they can manage with as >little down as possible. >Yes, the lucky one make it and are happy with how their leveraged >investment turned out.  But man oh man how some of them are stressed >out and house-poor for years.  I wonder how many marriages such >situations break up, from the financial tension. >-v.

Response:

>> Hopefully you’re not implying that this home purchase will leave them > with cash reserves <=$2000?  If so, they have bigger problems than just > not having decent representation at the closing. >I think this might not be too uncommon.

Quite common.  One hears of people freaking out because the closing is coming in a little higher than they expected and they can’t come up with the money. Or having to close at a certain time of the month or they can’t make it. I worry about folks who borrow the max that the bank will let them have and/or buy the most expensive house that they can manage with as little down as possible. Yes, the lucky one make it and are happy with how their leveraged investment turned out.  But man oh man how some of them are stressed out and house-poor for years.  I wonder how many marriages such situations break up, from the financial tension. -v.

Response:

said: > Hopefully you’re not implying that this home purchase will leave them > with cash reserves <=$2000?  If so, they have bigger problems than just > not having decent representation at the closing. > I think this might not be too uncommon.  When I bought my first home in > 1983 I had about, oh, $25 left over after the closing.  Ate spaghetti > for a few nights until my next paycheck!  But it was worth it, sold the > house 2 1/2 years later for more than twice what I paid for it.

Well, glad it worked out for you, but I would never max myself out like that.

Response:

> What do you expect to gain from posting your problem over and over > here?  You want sympathy?  Fine, we feel sympathy for you.  But when > you keep whining about it over and over, without adding any new > information, and when people’s attempts to discuss the problem with you > provoke responses like the one to which I’m responding, then your posts > go beyond interesting and become simply tedious and annoying.

 actually I was finished but a new person asked about doing a purchase without a lawyer , and I provided my real life reason to get a lawyer, a good one. Punch

Response:

> Hopefully you’re not implying that this home purchase will leave them > with cash reserves <=$2000?  If so, they have bigger problems than just > not having decent representation at the closing.

I think this might not be too uncommon.  When I bought my first home in 1983 I had about, oh, $25 left over after the closing.  Ate spaghetti for a few nights until my next paycheck!  But it was worth it, sold the house 2 1/2 years later for more than twice what I paid for it.

Response:

>Not sure how these things slip by title co’s but other than taxes, it >is not that uncommon for an unpaid subcontractor to come along even >after closing and slap a lien on a buyer’s new home.  Title co’s >apparently do not do as good a job as you’d think, such as seeing that >all subs were paid before allowing a new home purchase to close, so it > would not surprise me if they similarly "miss" unpaid back taxes >either.  

Do you undrstannd the BIG difference in the two things you bring up? It  is open and obvious which township the property is located in, and it is a matter of public record what the taxes assessed and owed on that property are.  That can be checked at a government office. OTOH an unpaid sub has a certain amount of time to file liens, and the house may indeed have been sold before that time has run.  There is generally no public statement or recording of all the people who worked on a particular job, that a title company could check.  (Other than specifically permitted trades like the electrician.)  The title company basically checks the public records and perhaps any known, identified questions already disclosed to it.  They do not do ‘outside’ investigation like tracking down subs or asking the GC which lumber yards they used.  If you wanted somebody to do all that for you, you would need to pay more for those additional services. That is why it should be a big surprise to miss unpaid taxes, but not surprising at all for a late lien to come in. -v.

Response:

>dude how the hell do I know?

Find out.  Perhaps, then, you might have a hand in solving your problem, instead of just whining about it. >I had a lawyer for the purchase and it’s his >job to figure this stuff out,

If it’s his job to figure this stuff out, then why are you whining about it in this newsgroup? What do you expect to gain from posting your problem over and over here?  You want sympathy?  Fine, we feel sympathy for you.  But when you keep whining about it over and over, without adding any new information, and when people’s attempts to discuss the problem with you provoke responses like the one to which I’m responding, then your posts go beyond interesting and become simply tedious and annoying. >you make it sound like I screwed up.

I don’t know whether or not you screwed up before.  But I do know that if you do not ask questions like the ones I and others have asked you and put time and effort into finding the answers to those questions, you are screwing up now.

Response:

>dude how the hell do I know?  I had a lawyer for the purchase and it’s his >job to figure this stuff out, you make it sound like I screwed up.

You may wish to consult with an different attorney to determine if your 1st attorney made a mistake that he is liable for; that is, it may well be the 1st attorney’s responsibility to pay the taxes (and then try to get it back from the builder) and not yours. -v.

Response:

> Didn’t you buy a title insurance policy when you bought the house? I > thought the whole point of a title insurance policy was to certify that > the title was free and clear of liens, and to specify that if a claim > against the title arose at some later date, the title insurance company > would pay to defend the title so you wouldn’t have to.  So why isn’t > your title insurance company fighting with the builder instead of you? > And why didn’t the title search before you bought the house turn up > the outstanding taxes? > And what does the lawyer who did the original title search have to say > about missing $12,000cdn in taxes? > There seem to be a lot of unanswered questions here.

dude how the hell do I know?  I had a lawyer for the purchase and it’s his job to figure this stuff out, you make it sound like I screwed up.

Response:

Didn’t you buy a title insurance policy when you bought the house? I thought the whole point of a title insurance policy was to certify that the title was free and clear of liens, and to specify that if a claim against the title arose at some later date, the title insurance company would pay to defend the title so you wouldn’t have to.  So why isn’t your title insurance company fighting with the builder instead of you? And why didn’t the title search before you bought the house turn up the outstanding taxes? And what does the lawyer who did the original title search have to say about missing $12,000cdn in taxes? There seem to be a lot of unanswered questions here.

Response:

>And what does the lawyer who did the original title search have to say >about missing $12,000cdn in taxes? >There seem to be a lot of unanswered questions here.

Like when that attorney’s errors & ommissions insurer is going to pay……. -v.

Response:

> Didn’t you buy a title insurance policy when you bought the house? I > thought the whole point of a title insurance policy was to certify that > the title was free and clear of liens, and to specify that if a claim > against the title arose at some later date, the title insurance company > would pay to defend the title so you wouldn’t have to.  So why isn’t > your title insurance company fighting with the builder instead of you? > And why didn’t the title search before you bought the house turn up > the outstanding taxes? > And what does the lawyer who did the original title search have to say > about missing $12,000cdn in taxes? > There seem to be a lot of unanswered questions here.

Not sure how these things slip by title co’s but other than taxes, it is not that uncommon for an unpaid subcontractor to come along even after closing and slap a lien on a buyer’s new home.  Title co’s apparently do not do as good a job as you’d think, such as seeing that all subs were paid before allowing a new home purchase to close, so it  would not surprise me if they similarly "miss" unpaid back taxes either.  As for title insurance, it protects the title company more than the buyer.  If you want title insurance that protects the buyer it costs more.  It’s just one more example of a lot of so-called professionals–well paid I might add–not doing their job, and passing the buck to the buyer who has already paid for all this to be done.

Response:

this is what I’m going through, right now and I had a lawyer: selling my house, and find out the builder didn’t pay the land taxes from before I moved in, now I have to pay the outstanding taxes; and go after the builder for the money $12,000cdn. or the new buyer won’t close the sale. Punch = poor.

– Hide quoted text — Show quoted text -> All, > I’m almost reluctant to post this out of shame.  Seems my brother and > his wife have decided to purchase their first home w/o the aid of an > attorney.  They’re supposed to be closing this Fri. > Best as I can tell their home inspection went OK with one item, leaky > pipe in the basement, that the seller is refusing to repair.  Methinks > with an attorney a properly worded letter could have had this repair > fixed. > Seeing that they don’t have an attorney, should it be any surprise > that they received a letter last week from the seller’s attorney > suggesting they bring an additional $2k to the closing?  Hmmm.  Now > they’re stuck.  They don’t dare ask me for cash since we’ve been > down this road before. > I can’t imagine what this request is for but my thinking is that > any/most costs can be rolled into the cost of the loan.  I remember > buying my first home with a VA loan back in ‘92 for $650. > What amazes me is that they’re willing to put $140k at risk for a > home purchase, their first home, but can’t swing an additional $250 > for an attorney!  Had I known this upfront… this would have been > their house warming gift from me.  Too late now. > I wish my bro and his wife good luck with this purchase… but I feel > they’re in for a "learning" experience.

Response:

> they bring an additional $2k to the closing?  Hmmm.  Now they’re stuck. > They don’t dare ask me for cash since we’ve been down this road before.

Hopefully you’re not implying that this home purchase will leave them with cash reserves <=$2000?  If so, they have bigger problems than just not having decent representation at the closing.

Response:

All, I’m almost reluctant to post this out of shame.  Seems my brother and his wife have decided to purchase their first home w/o the aid of an attorney.  They’re supposed to be closing this Fri. Best as I can tell their home inspection went OK with one item, leaky pipe in the basement, that the seller is refusing to repair.  Methinks with an attorney a properly worded letter could have had this repair fixed. Seeing that they don’t have an attorney, should it be any surprise that they received a letter last week from the seller’s attorney suggesting they bring an additional $2k to the closing?  Hmmm.  Now they’re stuck.  They don’t dare ask me for cash since we’ve been down this road before. I can’t imagine what this request is for but my thinking is that any/most costs can be rolled into the cost of the loan.  I remember buying my first home with a VA loan back in ‘92 for $650. What amazes me is that they’re willing to put $140k at risk for a home purchase, their first home, but can’t swing an additional $250 for an attorney!  Had I known this upfront… this would have been their house warming gift from me.  Too late now. I wish my bro and his wife good luck with this purchase… but I feel they’re in for a "learning" experience.

Response:

>Best as I can tell their home inspection went OK with one item, leaky >pipe in the basement, that the seller is refusing to repair.  Methinks >with an attorney a properly worded letter could have had this repair >fixed.

Or not.  The seller is under no obligation to fix any defects found by the purchaser’s inspection.  The purchaser can use the results of the inspection as a bargaining chip, but the seller is free to say "no" to any attempts by the purchaser to bargain, and the purchaser is free to walk away from the deal if they’re unhappy with the results of the inspection (that is, assuming that their purchase-and-sale agreement has the standard clause making the agreement contingent on a satisfactory inspection). Furthermore, in many cases the purchaser is better off making repairs themselves rather than demanding that the seller make them.  After all, who would you rather make a repair that could certainly be done wrong and lead to future problems — the person who’s about to get rid of the house or the person who’s about to be living in it for some time to come?  Which of them has a vested interest in doing the repair as cheaply as possible, and which of them has a vested interest in doing the repair properly, albeit perhaps more expensively? When my wife and I bought our house, we itemized all the problems that we and the inspector had found that we felt needed to be fixed, estimated how much each of them would cost, and asked the seller to reduce the purchase price by that amount.  He agreed.  It was a buyer’s market then, and the purchaser was eager to unload the house, so that’s not surprising.  Now, it’s much more of a seller’s market, so it’s not surprising that the seller of your brother’s house would refuse to bargain about needed repairs. >Seeing that they don’t have an attorney, should it be any surprise >that they received a letter last week from the seller’s attorney >suggesting they bring an additional $2k to the closing?

Sure, it’s possible that the seller’s attorney is trying to pull a fast one.  It’s also possible that they’re dealing with a shady mortgage lender who’s trying to cram in bogus fees at the last minute.  But it’s *also* possible that this is a legitimate request for legitimate added expenses?  How can you (or we) know, given only the information you’ve provided? >What amazes me is that they’re willing to put $140k at risk for a >home purchase, their first home, but can’t swing an additional $250 >for an attorney!

It’s dumb.  But it’s also a very common mistake. >Had I known this upfront… this would have been >their house warming gift from me.  Too late now.

Why is it too late now?  There are still four days before the closing, which is plenty of time for a lawyer to read over the paperwork, advise them on any potential problems, and represent them at the closing.  If they are really convinced that they should have a lawyer representing their interests, I bet they could still find one who would be willing to look over the paperwork and be at the closing, although s/he might perhaps charge a premium for the rushed nature of the work. Admittedly, there isn’t enough time for a lawyer representing them to do a title search or anything like that, but on the other hand, that shouldn’t be necessarsy, because the lawyer for the mortgage lender should have already done a search before issuing the lender’s title insurance policy. If your brother gets himself a lawyer and the lawyer finds problems, then the absolute worst-case scenario is that your brother walks away from the deal and loses his deposit.  But depending on the severity of the problem, it may be better to do that than to go through with it! In any case, if the problems are resolvable, it’s more likely that the seller will agree to postpone the closing while they are resolved.

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