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In representing a Buyer in a real estate transaction, there are a series of functions which require an attorney's professional expertise. Following is a brief discussion of some important issues encountered by a Buyer in a residential real estate purchase.

For most real estate transactions, the Buyer will use a real estate broker. It is important to understand the types of listing agreements, particularly the "Buyer's Broker" form which could obligate the Buyer to pay all or some portion of the real estate commission.

When an agreement is reached between Buyer and Seller, an offer to purchase or "binder" is entered into. A binder deposit, normally one (1%) percent is tendered from the Buyer to the Seller. The offer to purchase may state that it is not a contract of sale and among other items, provides the date by which a formal contract of sale will be entered into by the Buyer and Seller. The offer to purchase is designed to hold the property from sale pending the preparation by attorneys of a formal contract. In some areas in Connecticut, the Buyer proceeds immediately to an offer/contract provided by a real estate broker. It would be advisable to have this document reviewed by an attorney if there is not going to be a formal contract.

The next step is for the Seller's attorney to draft a formal contract of sale. This contract is sent to the Buyer's attorney. It describes the property and contains the necessary terms of the sale in order to provide a valid and enforceable contract.

The Buyer is normally required to pay further deposit monies at the signing of the contract. A total of 10% of the purchase price is the standard down payment. The contract of sale will provide for a mortgage and financing commitment date. The contract of sale will be contingent upon the Buyer obtaining financing by a specific date.

The mortgage commitment letter is the most important document a borrower receives from the lender prior to closing. It informs the borrower of the loan application approval and the commitment of the funds for the loan. There are often conditions outlined in the letter which require fulfillment prior to or at the closing of sale. The commitment should also set forth the basic terms of the loan, as well as the fees associated with the lender and charges to the borrower.

Other noted items in the contract of sale include the date of closing, the type and effect of inspections to be done, and the responsibility for the property in the event of pre-closing catastrophic damage.

The Buyer is responsible for inspection of the property. Even though there have been recent developments designed to achieve full disclosure by the seller, the Buyer is still responsible to uncover any and all problems regarding the condition of the property. Examples of some common inspections are: pest, radon, septic, well water, lead and building. The inspections should also be mentioned on the offer to purchase and the Buyer is given a limited number of days in which to have to have the inspections performed.

After the contracts of sale are entered into, the Buyer's attorney conducts a title search. The title search discloses the previous owners of record and other interests including encumbrances. In the event title problems are discovered, they are dealt with in order to insure good marketable title. Title insurance is required by lenders and purchased by the Buyer at closing. Title insurance provides protection against financial loss which could result from title defects or claims against the property.

The final stage of the real estate transaction is the closing. This is the stage at which the parties sign all documents in connection with the sale and mortgage and the balance of purchase price is to be paid to the seller. After the closing, the deeds are recorded formalizing the legal transfer of title. The Buyer now owns a new home.

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