Real Estate Attorney At Closing For A New Construction Home?

[Bradman]

Hello,

I am first time buyer and I am about to close a new home in Katy (Seven Meadows) in a week. I have very limited knowledge about closing process. Unfortunately I haven't used a real estate agent when signing the new home contract (probably a mistake).

My question is, do I need a real estate attorney at closing to protect my interests (like reviewing closing documents etc)?

If so, how much it usually costs? and can any recommend good real estate attorneys in Katy area?

Thanks

Bradman.

[BryanS]

Hello,

I am first time buyer and I am about to close a new home in Katy (Seven Meadows) in a week. I have very limited knowledge about closing process. Unfortunately I haven't used a real estate agent when signing the new home contract (probably a mistake).

My question is, do I need a real estate attorney at closing to protect my interests (like reviewing closing documents etc)?

If so, how much it usually costs? and can any recommend good real estate attorneys in Katy area?

Thanks

Bradman.

I've closed on two homes... You have the real estate agents, the mortgage broker, and the title company escrow agent. Usually, the title company agent explains to you what you're signing, as you are signing. And you are going to be signing a lot of papers. In fact, I had to sign one document that indicated that my signature - on all other documents - was in fact my signature! To me, that was just nuts, but OK... I'll sign it anyway.

The only benefit an attorney is going to provide you is that you have him/her review ALL documents that will be signed the day of closing, before the closing. Having them at the closing table doesn't buy you anything if they haven't reviewed all documents before hand (because of the volume of paperwork).

[GrandLakes]

We closed on a new home two years ago in Grand Lakes with no representation whatsoever - no real estate agent, attorney, etc. Everything went fine.

Good luck!

[Button2008]

I would suggest you spend a couple of days to go through all documents by youself so that you'll have an idea what you will have signed, which you will benefit from that for future reference. Specifically, the very important documents: title (for a new house, it may not be an issue), mortgage interest, deed restrictions etc.

After going through all those papers, you may have a lot of questions that you can ask when you sign the papers. The process helps you a lot.

Attorney will be long gone if you have any issue down the road. Reading those documents and fine prints will help you to take care those issues (if any).

GOOD LUCK!

[bman]

I would suggest you spend a couple of days to go through all documents by youself so that you'll have an idea what you will have signed, which you will benefit from that for future reference. Specifically, the very important documents: title (for a new house, it may not be an issue), mortgage interest, deed restrictions etc.

After going through all those papers, you may have a lot of questions that you can ask when you sign the papers. The process helps you a lot.

Attorney will be long gone if you have any issue down the road. Reading those documents and fine prints will help you to take care those issues (if any).

GOOD LUCK!

The problem with buying a new home without representation is that the cards are stacked decidedly against you. The buyer incentives you receive are almost always attached to using their 'preferred lenders' and title companies. Nine times out of ten, the title company is either owned by the builder or one of it's subsidiaries. One of the documents you're going to end up signing is a 'Disclosure of Prior Relationships' that is a blanket document saying that the lender, the title company, the lawyer - all of them have a prior relationship with the builder. Trust me, new home sales contracts are written hugely in favor of builders, which is precisely why they don't use TREC promulgated forms.

Now, all this being said - there are two things I would specifically watch for:

One: IF you're escrowing your taxes and insurance, make sure your documented estimated monthly payments are based on the improved value of your home and land. Many buyers walk in and simply want to know what their monthly payment is going to be based on how much you put down. Some of the less scrupulous builders will quote your payment based on the unimproved value of the land. "Oh we can get your payments at $900 / month." Sure - but that's basing the tax portion of your payment only on the value of the lot. Next year, when your assessment comes in and the improvement is added to your tax record, your taxes will skyrocket and if your escrow account isn't prepared for it... you won't be either.

Two: Many builders are writing clauses into their contracts now that state if you decide to sell your home within a certain amount of time after you buy it (usually 2 - 5 years), that you MUST list it with their approved companies. It gives them a chance to make money on the back end of a deal as well.

Now... you're building in seven meadows, so you're obviously dealing with a reputable builder so you should be fine. Just make sure you go over the HUD1 statement with a fine tooth comb AT LEAST a couple of days before closing. Make sure it's correct before you ever go to the closing, and if it's not - push the closing date until you have a corrected copy in your hands.

[FalconRanch1]

The problem with buying a new home without representation is that the cards are stacked decidedly against you. The buyer incentives you receive are almost always attached to using their 'preferred lenders' and title companies. Nine times out of ten, the title company is either owned by the builder or one of it's subsidiaries. One of the documents you're going to end up signing is a 'Disclosure of Prior Relationships' that is a blanket document saying that the lender, the title company, the lawyer - all of them have a prior relationship with the builder. Trust me, new home sales contracts are written hugely in favor of builders, which is precisely why they don't use TREC promulgated forms.

Now, all this being said - there are two things I would specifically watch for:

One: IF you're escrowing your taxes and insurance, make sure your documented estimated monthly payments are based on the improved value of your home and land. Many buyers walk in and simply want to know what their monthly payment is going to be based on how much you put down. Some of the less scrupulous builders will quote your payment based on the unimproved value of the land. "Oh we can get your payments at $900 / month." Sure - but that's basing the tax portion of your payment only on the value of the lot. Next year, when your assessment comes in and the improvement is added to your tax record, your taxes will skyrocket and if your escrow account isn't prepared for it... you won't be either.

Two: Many builders are writing clauses into their contracts now that state if you decide to sell your home within a certain amount of time after you buy it (usually 2 - 5 years), that you MUST list it with their approved companies. It gives them a chance to make money on the back end of a deal as well.

Now... you're building in seven meadows, so you're obviously dealing with a reputable builder so you should be fine. Just make sure you go over the HUD1 statement with a fine tooth comb AT LEAST a couple of days before closing. Make sure it's correct before you ever go to the closing, and if it's not - push the closing date until you have a corrected copy in your hands.

I've closed on two homes within the past 3 years, I went in with no representation. Had no problem at all. But of course read all the details of your mortgage. Like Pre-Payment penalties, Fixed-Variable Interest Rate, HOA, and so on and so forth. Good Luck! You should be fine!!

[kcoole]

I would request a copy of your HUD statement before you go to closing. You are entitled to receive it 24 hours in advance. Then, go through it very closely. If you want, send me a private message and I can try to help you double check it to make sure it matches up with whatever you were promised. As previously suggested, check all the details of your mortgage and make sure you understand everything. Again, if you have any questions, I'd be happy to give you an unbiased answer. Other than that, you should be fine. Your closer, with the title company, is supposed to be a neutral party, so if you have any questions don't hesitate to ask them.

Did you get an inspection? Some people think they don't need one for a new construction and the sales people will usually try to talk you out of getting one. I would NOT close until you get one, if you haven't already. I have a couple contacts, if you'd like.

Enjoy your new home!

[Bradman]

Thank you so much for all your suggestions.

I have closed my new home yesterday. Everything went well.. I got the HUD statement 2 days before closing. I have carefully reviewed everything for correctness.

Thanks for all the HAIF members. you guys are simply great

Thanks