A real estate deal that goes sour is a nightmare for both sellers and buyers. You may lose your deposit, suffer extraordinary delays in closing the deal, be charged interest penalties or even be sued in court should the deal goes bad. You deserve to have peace of mind that all will go well whenever you are making an important investment of real estate. Delrose Campbell an attorney-at-law of the firm Delrose A.M. Campbell in Jamaica, shared with me some insights from her vast experience in real estate matters, of some steps both buyers and sellers can take to prevent a deal from going sour.
Select a Good Lawyer
Always hire a good lawyer who is an experienced specialist in conveyancing matters, to represent your interests exclusively, whether you are purchasing or selling a property, advised Ms Campbell. A specialist trial lawyer for example, may be good at defending clients in court, however she or he may not be versed in real estate matters and may not be a good choice. How do you find a suitable lawyer? Here are some easy ways. Get recommendations of your friends or your Realtor. Enquire of the General Legal Council ( the governing authority for lawyers in Jamaica) whether the lawyer is a member “in good standing’. Among other things “being in good standing” means that the lawyer’s accounting records for clients’ monies are in order and up to date.
A good lawyer will: negotiate the terms that are most favourable to you; ensure that the seller is in position to sell; check the covenants and advise you of what the land may or may not be used for and ensure that your money is safely handled.
Enquire of Fees and Closing Costs
Hire your own lawyer. There is no reduction in costs if the buyer and seller share the services of one lawyer. The lawyer’s fee will run you anywhere from one to five percent of the sale/purchase price of the property. The difference between one and five percent can be a deal breaker, therefore be sure you can afford the lawyer’s fees. Costs of preparing the Agreement for Sale, writing letters and even courier services are extras. In addition, there are the statutory costs of Stamp Duty, Transfer tax and registration of the Certificate of Title that buyers or sellers are required to pay.
Ask the lawyer to give you a printed statement of the charges before hiring his or her services. Include these figures of the costs of buying or selling the property that you will know in advance how much you need to finance the purchase or the amount of your net proceeds. A short fall on the part of a buyer, may result in unnecessary delays and even incur interest penalties or loss of the deposit. Likewise, a short fall in the net proceeds might jeopardize the next purchase your money was earmarked for.
I encourage both buyers and sellers to ask probing questions about the deal. Sellers should enquire of your Realtor the details of the terms that the buyer is proposing. Are they paying in cash? Do they have the wherewithal to make a cash purchase? What is their declared source of income? Can they realistically complete the sale in the period specified? Do they qualify for a mortgage? Buyers should ask your Realtor why the vendors are selling. Are they serious about selling or are they just testing the market? Are they likely to renege on an accepted offer? Who is their lawyer? Is their lawyer renowned for efficiency and integrity? Answers to some of these questions will give you an insight of what may lie ahead on the road to completion of the sale. Do not commence the transaction if it does not feel right. Follow your instinct. You may very well sleep soundly and avoid the nightmare of a deal gone sour should you follow some of these steps above.
For a free consultation on this and other Real Estate matters contact Sydney Davis at 416 628 2915 (overseas); 876-383-2677(Jamaica)
Sydney Davis is the Managing Director of Sydney Davis and Associates. He is a member of the Realtors Association of Jamaica and licensed by the Real Estate Board of Jamaica as a dealer, and property manager. Our office is located at 80 Constant Spring Road, Kingston 10, Jamaica.