Something real estate brokers learn early on if they happen to move from one state to another is that the culture of buying and selling real estate varies. Some states call signing a contract of sale “going to escrow” and some call it “getting into contract.” Whatever it’s called, it all means the same thing – signing legal documents that will have a lasting effect on your life.
Living in the Northeast, in what is generally called the tri-state areas of New York, New Jersey and Connecticut, the culture to buy and sell real estate is to immediately hire an attorney. Real estate agents generally do not generate the contract of sale, they don’t talk to the attorney for the other party to the contract and they do nothing more at a closing than collect their checks.
In Florida, it’s entirely different. The state of Florida does not require an attorney for real estate transactions, and this was typically the way properties were closed for many years. Real estate brokers drew up the contract of sale, as they still do, then title companies took over to verify clear title and conduct the closing.
Well as we say, Florida is no longer your parents’ Florida, and although plenty of real estate transactions are still closed without attorney representation, more and more buyers and sellers are asking for legal advice. Much of this has to do with the increased value of the properties being sold, making one of life’s most significant transactions a much bigger risk.
If you decide to use only a title company, it’s the company’s job to make sure the property has a clear title to be conveyed without any easements or liens. And it will certainly review the contract of sale and the mortgage papers to make sure they are correct. However, their employees are not attorneys and are not fully responsible.
Just like in attorney-driven states, a Florida attorney will review the contract of sale, monitor contractual deadlines, including payment of escrow and mortgage commitments. Like title companies, the attorney will review closing documents as well as the title report. An attorney can also give you advice if there is an issue on a property inspection that could delay the process. And, of course, if you purchase a property privately or sell privately without a broker involved, an attorney is important.
If you choose to hire an attorney, he or she will, of course, hire a title company to check the property’s title. Many attorneys in Florida also have title companies as part of their practice and do the work themselves. Nevertheless, there will be an additional fee for their legal services, and that is one of the decisions you must make when evaluating risk.
Since many properties in Florida are purchased as second homes, frequently buyers and sellers never meet each other, and the entire transaction is accomplished online and by mail. In a situation like this, having someone locally who is looking out for your interests could be very beneficial and relaxing.
There is no right or wrong way to close a property, and your decision may also be influenced by the value of the property. Title companies do a fine job and experienced real estate professionals are adept at drawing up the contract of sale, and they should all be considered part of the transaction team.
However, we do live in a time when people sue one another for the smallest discrepancies, real or perceived, so it’s really about being protected. We’re not your father’s Florida anymore, and that’s a good thing.
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