When you decide that you want to purchase a piece of real estate, whether residential or commercial, your attorney or real estate agent will prepare a document called an offer to purchase. This document will contain the date you are making your offer, and a description of the property you are offering to buy, as well as your offer amount, the amount of your deposit, your intended down payment, and financing terms. It will also include the name and address of the seller, any proposed conditions of your offer (such as a request that appliances be included in the offered sale price), and several other provisions. Your attorney or real estate agent will ask you to sign it, and then they will send it to the seller.
You should carefully review the offer to purchase and make sure you understand and agree with it before you sign it, because once the seller adds their signature, it has been accepted and it becomes a purchase contract by which you are both bound. At that point, it cannot be changed unless both sides agree to an amendment. Sometimes, acceptance does not occur until one or more counter-offers have been exchanged.
We have generally observed that it is easier, and much less expensive, to prevent a problem than to fix one. (This applies to most things in life, not just legal issues). Since purchasing real estate is one of the most financially significant transactions most people ever participate in, we recommend having an attorney right from the start, before you sign a document. An attorney will help you understand both your rights and obligations, and make clear the implications of provisions in a contract that may seem harmless but could end up costing you a lot of money.
An experienced Wisconsin real estate attorney will not have to spend an excessive amount of time on a typical transaction. Considering the cost of the transaction (and what you could lose if something goes wrong), having an attorney's advice throughout is an investment, not an expense.
The closing is when your obligations, and rights, regarding the property are finalized. Your real estate agent may have some familiarity with the law, but it is not her job to advise you regarding the law or your rights and obligations. You will probably feel much more comfortable if your attorney is present to make sure that what you actually agree to is what you understood you were agreeing to. If you sign something, and later find out that it was incorrect, it may be difficult or impossible to have it corrected.
In some cases, it may be sufficient for your attorney to review all of the documents prior to the closing, and work with the title company to get any needed changes made. However, sometimes a document needs to be changed or added during the closing, and if your attorney is not present, he or she may not be able to advise you about whether you should accept the changed or new document.
Yes. If you have a tax lien on your property, you cannot sell your property or refinance your mortgage unless you pay the lien in full, or get the government to agree to a partial payment or a subordination. We can help you apply to the Internal Revenue Service, the Wisconsin Department of Revenue, and the Wisconsin Department of Workforce Development (unemployment insurance and worker compensation), among others, for relief from tax liens.
Yes. In fact, if you are thinking about a short sale, it is very important to have an attorney's help to make sure that the sale doesn't cause you more problems than it solves. In a short sale, there is an agreement with your lender to accept less than the amount that you owe on the mortgage in satisfaction of the debt. A short sale can affect your credit score, and you will want to make sure that you will not be responsible for payment of the difference between your mortgage balance and the sale price. An attorney can make sure that you understand the risks and benefits of a short sale.
If you are purchasing property, always request an inspection from an independent property inspector. The cost of an inspection is well worth it: if it reveals the property is in excellent condition, you will have peace of mind. But if it reveals problems, you can ask the seller to resolve them or back out of the purchase. You may save thousands of dollars by discovering a problem with the property you are considering buying before you actually purchase it.
Title insurance protects against defects in the title to a piece of property, such as if the person who sold you the property was not the true owner and didn't have the right to convey title. Title insurance generally protects the lender up to the amount of the mortgage. To protect your interest in the property, you would need owner's title insurance.
A pro forma is a term used in commercial real estate and real estate investment. It is a set of calculations that creates a projection of the likely financial return on a real estate investment. The pro forma describes the project in measurable terms and estimates costs, likely revenues, and the expected financial return. Based on the pro forma, an investor or developer decides whether to proceed with the project.
If you intend to buy property for a commercial use, you naturally want to make sure the property is suitable for your intended use. You might, therefore, make your offer to purchase contingent on suitability for the proposed use. Some of the documents you might want to obtain to make sure the commercial property you are considering buying will be suitable for your proposed use are: easements, covenants, and restrictions; governmental permits, approvals, and licenses; verification that there is legal vehicular access to the property; and rezoning, conditional use permits, variances, building permits, and occupancy permits.
A personal guarantee on a commercial property loan is very much what it sounds like: an individual pledges his or her private financial assets as security for a commercial mortgage. Because this promise is not secured by a specific piece of property (as a mortgage is secured by the real estate on which it is taken out), any of the assets of the individual making the personal guarantee may be used to satisfy the loan.
If you have more questions about the purchase or sale of residential or commercial real estate in Wisconsin, we invite you to contact our law office.