Buyers acquiring residential real estate usually expect a few issues to pop up between when the seller accepts their offer and they sign the closing documents. The closing is when ownership and keys often change hands. Buyers can then assume possession of the property and begin moving into the new home.
In some cases, surprising issues arise after the closing that require buyers to communicate with their real estate agent, the seller or even an attorney to address the situation. What types of issues might buyers face after a completed real estate transaction?
1. Undisclosed defects
Sellers have a legal obligation to disclose all known issues with the property, including latent or hard-to-spot defects. Buyers may realize weeks after assuming possession that there are serious, long-standing issues not included on the mandatory disclosure paperwork.
2. Title issues
Buyers purchase the title to the property or the right of ownership. In some cases, an outside party may come forward claiming to have an interest in the property. Such circumstances frequently involve divorces or real estate sales during probate proceedings. Title issues can affect ownership and may result in people losing the homes they purchased.
3. Boundary disputes
Sellers often take for granted that they know where the boundary of the parcel falls. They may provide inaccurate information during property viewings and inspections. Buyers may then find themselves fighting with neighbors about their intended use of the property.
4. Contractor liens
Also known as mechanics liens or construction liens, contractor liens use the home as collateral for work done at the property. If the seller made repairs or improvements and did not pay a contractor, the buyer may end up facing the lien request and outstanding debt generated by that work.
5. Financing or escrow errors
In some cases, a bank might transfer mortgage funds to the wrong party. Buyers may then face financial issues and claims from lien holders owed money by the prior owner. Other times, lenders may improperly calculate escrow requirements. Buyers may then find that their escrow funds are woefully inadequate for property tax obligations or homeowners’ insurance renewals.
Working with a real estate attorney while reviewing closing paperwork can reduce the likelihood of post-closing complications. Additionally, recent home buyers dealing with unexpected issues may require legal representation to understand their rights and hold an appropriate party accountable for harm, and that’s okay.
