Builders Forum lets Chicago area housing experts share thoughts onissues affecting home buyers. Roger Gatewood is president of theHome Builders Association of Greater Chicago and head of WestfieldHomes, based in Gurnee.
Ten years ago, many home purchasers were not represented by anattorney. Today, almost all buyers have been convinced to use theservices of a real estate lawyer when purchasing a new home.
For a fee of between $200 and $1,000, the lawyer usuallyperforms several functions and provides certain services, includingthe following: Helping the purchaser understand what he or she is buying. Assisting at the closing to ensure the buyer gets what waspromised. Obtaining additional rights for a buyer that are not contained inthe builder's form or contract. Compromising or eliminating other provisions of the builder's formof contract.
The first two functions listed are helpful to buyers who havelittle or no experience in purchasing a home as well as to thosebuyers who have purchased homes previously.
A lawyer can give buyers assistance and reassurance inpurchasing homes, explaining the meaning of contract provisions,clarifying and incorporating buyers' particular needs, if any, andadding a kind of insurance that the buyers' rights and interests arebeing looked after by their paid representatives.
If you are purchasing a typical single-family home, as opposedto a town house or condominium, a lawyer also will review a survey ofyour lot showing the location of your home, and review the titlereport showing the condition of title.
This is important because there might be easements orrestrictions that apply to your property that are described in thetitle report and-or shown on the survey. If an easement orrestriction will prevent you from using your property as you intend,you should know this before all the closing arrangements have beenmade.
Therefore, the survey and title report should be reviewed beforeclosing and as early as possible. At the time of closing it will bedifficult, if not impossible, to do anything about these issues.
The latter two functions are the reasons most often given forhiring a lawyer. However, most builders would argue they are areaswhere a lawyer is least likely to provide meaningful services whenyou are dealing with a reputable builder.
A common example of an additional right requested is the rightto visit the construction site during construction.
Buyers tend to assume the house is already theirs after signinga contract, and there is a natural desire to check on the builder.Because of the high risk of accidents, reputable builders never allowbuyers on the construction site.
Even with this prohibition, builders still encounter buyers whoare visiting the construction site and, yes, they have had buyersinjured at a job site. Construction sites are inherently dangerous.
If you haven't checked the contractor's reputation and don'ttrust the builder enough to let him erect your house without yourintervention, then do business with another builder and don't wasteyour lawyer's time on this kind of issue.
Generally, builders have developed their form contract based ontheir cumulative experience with buyers. A lawyer is unlikely toobtain significant or meaningful revisions to the form contract for aproduction home.
Typically, the lawyer also will be successful in negotiatingminor changes such as tax proration clauses, which usually areconfusing to a buyer, but can provide minor savings.
How should a buyer choose a lawyer?
Look for experience in real estate transactions, not just afamily friend or relative. Like tax or corporate law, real estatehas its own set of statutes and customs.
Lastly, many town-house and single-family-home developmentshave extensive covenants and restrictions on homes and their usesafter purchase. Because of their length, you might not want to payfor your lawyer's time to review these documents.
It is important that you read them before closing so you willnot be surprised to find out you can't install that chain link dogrun or add a fence.
Look especially for how architectural and other restrictionsaffect the use of your property. Even if you obtain a validbuilding permit, a court will order you to remove improvements thatviolate such covenants and restrictions.
So, if you are uncertain about the complexities of buying yourdream home, get an experienced lawyer who understands real estate lawwhen you sign the purchase contract.
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