Real Estate Law
Our Firm represents a variety of clients and their real estate needs. We provide many different services, including real estate settlements, contract review, contract drafting, disputes with homeowners’ associations and contractors, title problems, deeds and foreclosures. If you have real estate needs, our Firm is there for you. Call us for a consultation.
Frequently Asked Questions:
Q. Should I have my sales contract reviewed by an attorney?
A. When we purchase a home, it is generally the single largest investment we make in our lifetime. While many Realtors are capable of “filling in the blanks” on a “standard” contract, no two contracts are the same. BEFORE you sign a contract for the purchase of a home, investment property or business, you should have the contract reviewed by an attorney with real estate experience. We often review contracts AFTER signing when there are problems and in many cases cannot assist the client because what they thought was discussed is either not in the contract or was written in a manner that does not accomplish what the parties intended. All contracts in Virginia must be in writing and provisions that were not included or written incorrectly can rarely be changed or added. ALWAYS discuss the contract with an attorney BEFORE you sign.
A. Points can be described as part of the cost of borrowing money from a mortgage company. Points are generally expressed as a percentage of the amount borrowed for example 1 point would be 1% of the amount borrowed (i.e., If you pay 1 point to borrow from your lender on a $200,000 loan, you will be paying the bank $2,000 plus other fees and interest). Additionally, points are generally lumped together but are commonly composed of a loan origination fee and loan discount points. Therefore, if a lender gives you a quote of 1 and 1 on a 5% loan of $200,000, you would be paying a 1% loan origination fee of $2,000, a 1% loan discount of $2,000, plus other lender fees (commonly referred to as junk fees such as processing fee, administration fee, document preparation fee, etc.) plus interest on the $200,000 at 5%. It is important to know in advance what your lender is changing and they are required by law (RESPA) to provide you with a good faith estimate of closing fees to include all of their fees, and a Trust In Lending (TIL) statement so that the savvy consumer can compare several lenders and determine the true cost of the loan.
Back to TopA. Title insurance is a form of insurance that protects the policyholder from any loss associated with most defects in the chain of title. Defects may include missing heirs, fraud and forgery. There are two (2) kinds of title insurance: a lender’s policy and an owner’s policy. The lender’s policy protects the mortgage company and the owner’s policy protects the purchaser. Lenders always require a lender’s title policy. Owner’s coverage is optional and is recommended.
Typically a title insurance binder will be provided to the settlement attorney for review prior to settlement to see if there are any problems such as incomplete or inaccurate documents, incorrect legal descriptions, unreleased deeds of trust, liens, judgments, easements and rights of way, to name but a few. You will want to review your title binder before settlement or at settlement before you close with your settlement attorney.
Back to TopQ. What is Owner’s Title Insurance and should I purchase it?
A. Owner’s title insurance protects the purchaser against many title defects. Such problems may include unreleased deeds of trust, liens, missed judgments, fraud, missing heirs and forgery. It is an optional coverage that we recommend be purchased by our clients. The policy is purchased only once (when you buy your property) and protects you for life whether or not you still own the property or not. Most policies provide increased protection to guard against inflation and is generally purchased in an amount equal to the purchase price of the property being bought. You should review the title to your property with your settlement attorney before closing.
Additional coverages may be available such as “Affirmative Mechanic’s Lien Coverage” which is especially valuable when constructing you own home or purchasing newly-constructed property. It is coverage that you should discuss with your settlement attorney before closing.
If you purchase owner’s coverage, you should never have to purchase it again for the same property and it usually entitles you to a discount on future lender’s coverage if you refinance your loan.
Back to TopA. HUD-1 is a multi-page document first utilized by the Department of Housing and Urban Development. A HUD-I is essentially a spreadsheet that shows all debits and credits of both the Seller and the Buyer. It is important to review this document completely with your settlement attorney prior to signing the loan documents.
All financial transactions associated with your closing must be listed on the HUD-1. For example the HUD-1 may include lender fees, realtor fees, attorney/settlement fees, records fees, title fees, credits, property tax pro-rations and homeowners’ dues pro-rations. Carefully review all fees listed so that you fully understand what you are being charged and why.
Back to TopQ. Are real estate settlements regulated?
A. Yes, real estate settlements are regulated by both the Federal government and the Commonwealth of Virginia. The Real Estate Settlement Procedures Act (RESPA) located at 12 U.S.C. 2601, et seq. is the Federal statutory scheme that regulates real estate settlements. Additional federal regulations that affect real estate settlements are the Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Housing Act, Home Mortgage Disclosure Act and the Truth-in-Lending Act to name but a few.
On the state level the Commonwealth of Virginia has enacted Consumer Real Estate Settlement Protection Act (CRESPA). This statute requires all settlement attorneys and agents to register with their respective regulatory agency, such as the Virginia State Bar. Attorneys are required to have minimum amounts of insurance and be bonded before they can conduct real estate settlement as set forth in Virginia Code Section 6.1-230, et seq. For more information, you may want to visit the Virginia State Bar’s website located at http://www.vsb.org/site/regulation/crespa. CRESPA provides protection for the consumer from the unauthorized practice of law, insurance and regulation. Remember only a licensed attorney in Virginia can provide you with legal advice regarding real estate law.