Ask A Lawyer Series: Real Estate
Purchasing or selling a house is one of the biggest investments in most people’s lives. The real estate agents will assist you in finding a dream house or in listing your house for the best price. Someone might be able to find a buyer or a seller without the assistance of a real estate agent. Do you need a real estate attorney to make sure the transaction carries out?
Many experienced real estate agents are willing to offer their advice or opinion regarding the resulting effects of contracts or actions based on their years of experience and professional insights. Unfortunately, Indiana law prevents real estate agents from acting in a legal capacity for which they are not licensed. The real estate brokers and agents may only use and complete select legal instruments prepared by attorneys in the course of standard real estate transactions. For example, the real estate agents can fill in the standardized form contracts but are not able to change or customize any provision in the standardized contract or offer you any legal opinion, legal advice, or guidance. The real estate agent can represent you in negotiating the price with the other party, but they cannot represent you in any administrative proceedings or before the court, or negotiate any legal rights or responsibilities. Any of the foregoing actions will result in the unauthorized practice of law.
One of the most common issues arising out of a real estate transaction is that the buyer decides not to proceed with the purchase because of the issues revealed by the inspection or appraisals. Whether the buyer has a right to walk away from the transaction and what recourse the seller has are both legal questions that involve the legal interpretation of the Purchase Agreement and examination and research of the caselaw and relevant statutes. The parties will need to engage with attorneys for legal advice.
As to the transactions that parties are not represented by any real estate agents, the Statute of fraud requires the purchase agreement to be in writing. Any oral agreement to buy or sell a house will not be binding in Indiana. It is recommended to hire an attorney to help you navigate the process and to prepare a purchase agreement. Other than the purchase price and the closing date, the purchase agreement also defines the rights and obligations of both parties, including the risks of loss, condemnation, contingencies, expenses, duties at the closing, title commitment, survey, default, etc., which a home buyer and a seller do not normally negotiate themselves. Professional legal advice will save you a lot of time and money in the event that something unexpected happens. For example, the house was not in its original condition at the closing, or the seller misrepresented some facts about the house, or the house was burned down prior to the closing, etc.
Sometimes the buyer and the seller have already decided on the terms and just want to find an attorney to formalize their agreement. In most circumstances, it is unethical for an attorney to represent both parties in a transaction because the lawyer has a legal obligation to advocate for his or her client’s best interests, and it’s difficult, if not impossible, to do that when an attorney is representing both parties. However, there are limited circumstances when a real estate attorney can represent both the seller and the buyer. It varies from case to case and each party will need to give informed consent, confirmed in writing.
Stuart & Branigin was founded in 1878 in Lafayette, Indiana. Our experienced and knowledgeable lawyers provide trusted counsel to local, regional and national clients. Our firm is composed of five practice groups, Corporate and Non-Profit, Litigation, Personal Injury, Private Client Services, and Transportation.