A 3.8% Federal Sales Tax on All Real Estate?
Not exactly!
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Home Sweet Home!
Thinking of deeding the family homestead to the next generation as a quick and easy way to beat the tax man, avoid probate or save the property from nursing home bills? Think again, and read more here.
Over the years I have handled real estate transactions which involved ski resorts, hotels and motels, campgrounds, large land purchases and liquidations, timber sales, real estate developments, large multi-family projects, mobile home cooperatives, automobile dealerships, all manner of retail establishments, short sales for buyers and sellers, and foreclosures for owners, bidders and lenders. Those can be large and complicated transactions with many unique aspects. By far though, most of the real estate transactions I have handled were residential purchases and sales.
These
transactions are no less important than the large commercial deals, and for the
parties involved are every bit as important.
While most residential transfers have many things in common, each has special considerations that can easily be overlooked when it is treated as just another routine residential deal.
Residential real estate transactions, be they purchases or sales of primary homes, vacation homes or even small rental properties, are generally a gratifying experience for me, because they are probably among the largest transactions that most of us are likely ever to be involved in and there is often a personal or emotional involvement with the property. Sellers are generally moving on to something new, and buyers are excited about their new property. As legal situations go, they offer the most potential for a positive experience all around. These transactions can benefit from streamlined procedures to a large extent, yet they are of great importance to the individual parties involved.
With the banking crisis of the early '90's and the technological advances of the last 20 years, the resulting reorganization, consolidation and nationalization of the mortgage industry, and the advent of title or settlement companies, there has come a tendency to "commoditize" a real estate transaction. Just like we now buy microwaves and DVD players and computers off the shelf, content simply to buy a new and better one when the old one breaks or becomes outmoded, there is a temptation to buy the services necessary to consummate a residential real estate transaction "off the shelf," to figure that one offering is as good as another and to shop for the least expensive alternative to get you through the transaction.
This very often works out fine for the person selling or purchasing his or her property. But I regularly receive inquiries from people who have discovered to their dismay that their interests were not properly represented in the course of the impersonal, streamlined, transaction processing they acquired. The sub-prime mortgage crisis is only the most recent and best known example of this, to the chagrin of many people who were very excited to buy or refinance their home but who did not treat it as a substantial transaction where they needed some personal advice and assistance. Title problems, boundary disputes, easements, liens, restrictive covenants, misunderstood or improperly explained terms… these are only a few of the things that can pop up to turn your purchase or refinance into a big problem. These problems do not arise often, but when they affect your home they can be particularly upsetting. Many times a buyer does not discover a problem until he or she goes to sell. Similarly, issues such as these can come back to haunt sellers if their closing documents are not properly drafted, sometimes years after the sale has been completed.
Unfortunately, it is always more expensive, and sometimes impossible, to go back and correct any problems that may have occurred in the original transaction. I personally am surprised that so many people are impressed with the importance of saving one or two hundred dollars on professional fees involved in transactions that can easily add up to hundreds of thousands of dollars. This website contains articles, all written by me, describing some of the steps involved in a residential real estate transaction. These are offered as a general educational tool, and do not constitute legal advice. Check back often as I continue to add and update them. I hope they will be helpful in providing you some insights and background that might be useful as you prepare to buy or sell your property. If they serve to persuade you that I might be a valuable resource for you in that pursuit, then I hope you will inquire.
Good luck with your transaction!
Buying? Selling? The purchase and sale agreement is the road map for your
transaction. It should reflect the parties' agreement on all important
terms, but during a slow real estate market, it can present some special
issues. Read more...