FIND THE ONE
So you've fallen in love with a property that meets all of your needs and some of your wants—and it's within your price range. Let's make an offer!
But here's where it can get tricky: You don't want to low-ball your offer, and risk losing the home to another buyer or insult the seller—but you also don't want to pay more than is necessary. So how do you land on the ideal number?
First, look at other home sales in the area. Is the house you want priced reasonably in comparison? Did other homes sell for less or more than the asking price? If they sold for an amount that's comparable to your seller's list price, that's a good indication you should be offering a number close to asking.
Next, consider how long the home has been on the market, and how incentivized the homeowner is to sell. For example, if the seller is living in a transition home while waiting to sell, you may have a better chance of getting the seller to accept a discounted offer. But if he's casually putting the home on the market to see how much he can net, the seller may be more apt to wait for the perfect price. Lastly, let us help you. We've done this a time or two.
This is also the time to bring in the real estate attorney.
You need an attorney to represent you in the transaction in order to take care of the following matters:
- Review the sales contract and disclosures and propose modifications as necessary
- Provide official notice of issues covered under contract contingencies – e.g. inspection, attorney review, mortgage
- Deal with the attorney on the other side without getting outwitted
- Negotiate with the seller’s lender in a short sale (seller’s attorney)
- Ensure that all pre-closing steps are completed and documents prepared – e.g. condominium documents, water certificates, title checks, surveys, zoning and flood certificates
- Review your mortgage documents (not all attorneys do this)
- Help prepare the closing statement (HUD-1). This includes figuring out the allocation of taxes and ensuring that all bills are appropriately paid.
- Keep an eye on the fees being charged by various players – e.g. title companies – and get them removed or reduced
- Explain to you at closing what the documents you are signing mean
- Take care of recording of deed, mortgage, and releases
For all this you pay $500 – $750 typically plus a portion of the title insurance (it could easily be $1500 or more) usually goes to the seller’s attorney for doing some of the title work. It’s a relative bargain – especially when compared to what some real estate agents make (at least the traditional ones).
From the above list you can tell that there are a lot of steps that need to be managed and there are lots of opportunities to make mistakes – and mistakes are unfortunately made all the time. And when mistakes are made either money is lost or deals fall apart or closings are delayed. For an attorney to be any good in this business they have to do a lot of transactions and get a rhythm going. They have to know the protocols for working with the other side and they have to know what is worth fighting about, what is not worth fighting about, and which players can be pushed.
While being represented by an attorney isn’t mandatory in IL, my guess is that 99% of all buyers and sellers have an attorney represent them. You don’t want to be the only one without an attorney if the sellers have an attorney. And, while some buyers say they don’t want an attorney to represent them, I strongly recommend it.
So how should a buyer or seller go about finding a good attorney? Well, let’s start with how NOT to find one: friends or family members. This is probably the worst basis for choosing an attorney – unless you have direct knowledge of their capabilities as a real estate attorney. Quite often clients will tell us they want to use a friend or relative and it sends shivers down our spine. Why? Because we have had horrible experiences–on both sides of the table–with attorneys who are friends or relatives and often the reason it’s a problem is that these attorneys don’t do a lot of real estate transactions.
Remember what I said above about having to have a rhythm going? Invariably, a friend or family member that is brought to us to act as an attorney is rather clueless. I could tell you stories but I won’t. So when a client brings up this possibility we very delicately ask how much real estate business the attorney does and usually we are assured that they do plenty but then when the transaction is underway we find out otherwise.
That’s why we keep our own ever changing list of attorneys that we’ve encountered in our transactions that we would like to work with again. When we have a good experience with an attorney they go on our list and when they disappoint us they are removed from our list. And just to be clear, disappointing usually means dropping the ball during the process or being unresponsive.
So once we have a signed contract we always ask our clients if they have an attorney in mind. If not we provide them with our referral list of attorneys but I suspect that many clients are skeptical about getting an attorney recommendation from their realtor.
After all, isn’t there a risk that the attorney is in the realtor’s pocket–more interested in staying on the realtor’s list than taking care of the mutual client? I guess that is a risk but it’s one that can be guarded against by asking a few simple questions about how the referral list was created and asking for specifics about why the realtor recommends these attorneys. But if the client can get past this concern they should keep in mind that their realtor sees a lot more attorneys in action than they do so they shouldn’t be too quick to dismiss their recommendations.
But in the end you are going to need a recommendation from someone – a realtor or another acquaintance – and then what? How do you determine if the referred attorney is in fact any good? Obviously, you need to get them on the phone and ask them a few questions to see if there is a fit. Here are a few questions to get you started:
- How many real estate closings do you typically do in a month?
- How many closings are you currently working on (too many can be a problem)?
- Do you have an assistant? What will his/ her role be?
- What services are included? If you would like your attorney to review
your mortgage terms then be sure to ask whether or not this is included.
If you are selling short be sure to ask if he/ she will negotiate with
- What/ how do you charge? What happens if I have a lot of questions?
- What experience do you have with [fill in the special circumstances of your transaction - e.g. short sales]?
In addition to the specific answers to these questions you will want to pay attention to such things as how they treat you–e.g. are they in a rush to get you off the phone, how long did it take for them to call you back–and how articulate they are. Inarticulate attorneys are going to have a hard time communicating with the other side. What is their attitude? Are they arrogant? Are they approachable? And finally, do they appear to be smart? As in real estate, experience is nice but there is no substitute for intelligence when it’s time to improvise.