The Agreement

A very interesting discussion today with a local real estate lawyer. (Yes, real estate lawyers can be interesting-I'll save that for another post).

There is always lots of discussion with buyers and sellers about chattels and fixtures. Chattels are items in the house that are not securely attached (the dining room table, for example). Fixtures are securely attached (ceiling lights, for example). Fixtures do not need to be listed in a purchase agreement but chattels do. Of course, I live by the rule of when in doubt write it out.

Privately held mortgages: Few people realize that if they have a second mortgage or a privately held mortgage selling their property can be problematic. Only institutional mortgages can be carried over on the closing date of the transaction. This means that, if the seller has a private mortgage, the entire amount of the loan has to be paid back a few days before the transaction closes. The seller may have great difficulty finding the money to pay it off in advance and may not find out this is an issue until after the sale agreement has been signed.
I, for one, will be asking sellers who holds their mortgage to avoid this nasty scenario.

This lawyer said that he doesn't think we should be asking for surveys of the property anymore. He says that it is better to take out title insurance and have the insurance cover any issues. If one has the survey and it shows any potential problems then the insurance will not cover it. Hmm.

I love my job; it is always interesting.