As a real estate attorney, I know the attorney review period is crucial for protecting my clients, especially buyers. This is the defined window of time where lawyers review the purchase contract to catch any issues before they derail the deal. It’s my job to find problems, no matter how small, during this critical phase. But what exactly can go wrong during the attorney review period?
In this article, I’ll cover key pitfalls to watch for during the attorney review period, so you can feel informed and empowered as a homebuyer.
What can go wrong during the attorney review period?
During the real estate attorney review period, 13 things can go wrong, such as home inspection delays, title issues, undisclosed defects and repair negotiations, mortgage approval issues, major life changes in the lives of buyer or seller, failed municipal inspections and code violations, permit issues and problems on fixing a closing date.
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Let’s have a detailed look into each of these issues
1. Inspection Delays
The home inspection usually happens during attorney review. If the inspector needs more time due to access problems or bad weather, I negotiate an extension with the seller’s agent. Even a few days’ delay can throw off closing timelines. For example, once an inspector couldn’t access the attic in a home due to stored boxes. We delayed the inspection by 4 days to give the seller time to clear it.
2. Title Issues
The title company may find liens, easements, or ownership gaps when researching the property history during review. As the buyer’s attorney, I communicate with the seller’s attorney and title company to ensure that any title defects are cleared. Some serious title problems, however, can take months to fix. I’ve seen divorces or inheritance disputes result in title claims.
3. Repair Negotiations
When a home inspection uncovers issues, I help the buyer make reasonable repair or credit requests. When fixes get expensive, though, negotiations can get tense. I’ve seen deals collapse when sellers refused to address major roof or foundation problems.
4. Undisclosed Defects
In Illinois, sellers must disclose known defects. If serious issues are found – such as termites, for instance – that the seller failed to disclose, I advise clients on their options, including canceling the contract.
5. Financing Problems
Even pre-approved buyers can have trouble getting a mortgage once under contract. Changed financial circumstances, appraisal issues, or lenders denial during underwriting are not uncommon occurrences. I try to advise on financing and use a network of lending professionals who can assist, but a deal can fall through if a loan fails to materialize.
6. Life Changes
Major events like a lost job, illness, or divorce during the home sale process can mean one party needs to delay or cancel. I handle these sensitively and in accordance with contract terms.
7. Failed Inspections
If the home doesn’t pass municipal inspections for occupancy due to code violations or other reasons, a buyer can walk away if repairs aren’t made in time for closing. I advise clients of their rights in these scenarios.
8. Permit Issues
If buyers hoped to renovate but are denied permits by the city due to zoning rules, they may cancel the contract as long as a contingency was included in the real estate contract. I take the buyer’s plans into account when drafting or modifying the contract during attorney review.
9. Disputes
Disagreements between buyers and sellers over repairs, credits, or the timing of possession can happen. If we can’t find common ground, I advise clients on next steps per the purchase contract. For instance, one seller refused to leave his custom gazebo unless the buyer paid an additional $5K for it.
10. Zoning or zoning compliance issues
If the title search shows evidence that the home was built outside the property’s allowance, it would give any buyer serious pause. You don’t want to inherit an illegal decision for which you’ll be liable in the future. It also ensures that the drawn borders of the property are what’s on record for the plot(s) of land being purchased.
11. Unresponsive Parties
When the seller’s side goes quiet on requests during review, it signals deeper problems. Sometimes its just that people get busy, but I make a point to persistently follow up until I get a response and can assess if the deal can get back on track.
12. Lengthy waiting periods for government approvals or certifications
Unfortunately, bureaucracy is a common delay in many home sales. Deeds need to be recorded, affidavits signed, and inspections made. If the local government is experiencing a backlog or is understaffed, it could significantly delay proceedings.
13. Closing Date Issues
In reality, picking a closing date that’s convenient for both sides plus the real estate agents, lenders, attorneys, movers, etc. can be a challenge. I advise flexibility when proposing dates.
In Summary
As your attorney, I’m ready to handle common problems that crop up during review to keep your deal on track. I maintain open communication to keep you in the loop.
Learn more about the attorney review period in real estate.
Let me know if you need guidance!
