Move My Realty - Real Estate News

Buy at your own risk

September 20th, 2008 4:43 PM by Ron Mastrodonato

Buy at your own risk
Having second thoughts? Beware of lawsuit

September 19, 2008

By Ilyce Glink
Co-written by Samuel J. Tamkin
Inman News

Q: My son signed a contract to buy a home and put down $600. The real estate company found a bank who approved him for the loan (over the phone), but he did not sign any paperwork with the bank.

Later that night, after he had had time to think about it, he decided the costs would be too much and he wasn't sure he could make the payments. He tried to withdraw from the offer, but the sellers say they will sue him to make him buy the home.

I realized he shouldn't have signed anything, but in this case, would the sellers win such a case? Does he have other options?

A: Your son may have many options and would be wise to review the contract immediately with a real estate attorney. The contract may give him the right to have the document reviewed by an attorney and during that review he might be entitled to terminate the contract.

The contract may, and should, give him the right to inspect the property to determine whether the property has any major defects. Upon such inspection, if your son finds major defects, the contract might give him the right to terminate the contract.

In some states, if the seller has not given the buyer the proper disclosure documents for the home, the buyer has the right to terminate the contract at any time up until those disclosures have been delivered and the buyer has had time to review the documentation.

Finally, if the buyer doesn't go through with the purchase, the contract may limit the seller's damages to the amount he deposited under the contract. In other words, it's possible that your son's maximum exposure to the sellers could be the $600 he put down.

With so many options, you can see why it would be helpful to have your son sit down as soon as possible with a real estate attorney who can guide him through the process. If you live in a state where buyers and sellers do not customarily use real estate attorneys for the purchase and sale of homes, he should still seek one out that can help him.

While it would be highly unusual that a seller would be able to force a buyer to close on the purchase of the home, if the contract does not limit the seller's damages in case the buyer fails to close, the seller could sue the buyer for the losses and expenses the seller incurs as a result of the failed deal.

The big lesson, of course, is to think first and sign later.

Q: There is a quitclaim deed that was signed and notarized. The deed states that the notary witnessed a certain person who stood before him and signed the deed.

Here's the problem: I have in my possession a death certificate that shows this person (not the notary) was dead one year before supposedly signing the quitclaim deed.

Did the notary do something wrong and what happens now?

A: It's possible that the notary did not do his duty as a notary. A notary is required to review some form of identification that verifies that a person signing a document matches the identification.

If a notary fails in his or her job as a notary and does not take the required precautions to make sure the proper person is signing a document, the notary may be liable for his failure to properly verify the identity of the person that signed a document.

In some states the notary's liability may be limited and may not be nearly enough to cover the expenses and costs that someone else might incur as a result of the notary's failure to properly confirm the identity of the person signing a document.

But a notary may not have a duty to ascertain whether the identification presented is not a forgery. Generally, if a person comes before the notary and presents identification that the notary believes to be accurate, the notary has probably satisfied his or her duties as a notary.

Some states are requiring more and more of notaries. Some states now require notaries to not only review the person's identification but also fingerprint the person signing the document. While notaries are the first line of defense against fraud, it's not a foolproof system.

Your case isn't unique. There have been many cases of fraudulent transactions involving quitclaim deeds. If the quitclaim deed purportedly transferred title to a property that you had an interest in or would have had an interest in, you might have to take legal action to protect the property or to protect any interest you might have had in that property.

If you are in a position that your interests in the property could have been compromised, please consult with a real estate attorney.

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

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Posted in:General
Posted by Ron Mastrodonato on September 20th, 2008 4:43 PM

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