A real estate contract and a quitclaim deed can cause major problems to a buyer.
Sometimes, we get in a hurry that leads to poor decisions. Time is spent searching for the perfect home, and nothing seems right. Finally, the perfect house comes along. But, it is out of your price range. "I'll never get approved," you think. Before you know it, the real estate agent has found a bank and has a contract sitting in front of you to sign. Caution is thrown aside, you agree to put some money down, and the contract is signed. A few hours later you realize that there is no way you can pay the loan amount. When you gracefully try to withdraw, the sellers are angry and throwing words such as, "law suit" at you.
Of course, the sellers have a right to be mad, but we all make hasty decisions sometimes. Here is what to do:
Contact a real estate attorney. Some attorneys offer a free consultation. Even if you have to pay for a review, it is better than be foreclosed on four months into a new mortgage. The contract may give the buyer an option for attorney review. If so, the attorney may find just cause to terminate the contract right away.
Most real estate contracts will have an inspection clause in it. This gives a buyer the right to have the property inspected and determine if the property has any deficiency, repairs to be made, defects, etc. For example, if the foundation has a crack. If the inspection finds any major problem, the contract can usually be voided. Otherwise, the buyer can ask for allowances that may enable them to afford the note.
Disclosure laws vary per state. However, some states mandate that a seller provide all disclosure documents prior to a negotiation. If the seller has failed to do this, the buyer may have the right to end the contract.
When a buyer does not honor a real estate contract, the contract can allow the seller to only claim damages for the amount of money that the buyer agreed to deposit within the contract. Essentially, the buyer can only sue for the amount that a buyer agreed to deposit, and then the contract to buy would be void.
However, contract wording is often foreign to the layman. There are several options and loopholes to get out of a contract; but a buyer may not understand, or even find them alone. This is why it is so imperative to consult with a real estate lawyer. It is important that you choose a real estate attorney to guide you. A lawyer will generally focus their practice on different field(s). A real estate attorney will usually know the "ins and outs" better than say a …tax attorney. In other words, you wouldn't go to a ear nose and throat doctor, if you are having heart pains.
It is not likely that a seller would actually take the time, or have the legal standing, to make a buyer close on an unwanted property. However, if the seller lost another potential buyer, or had expenses that occurred as the result of a contract not being honored, they can sue the buyer for related loss.
Now, let's say there is a quitclaim deed signed and notarized. However, the person that signed the deed is dead. The notary was supposed to be witness that the signer is signing his/her legal name. Is the notary at fault? What happened? What if there is interest in the property?
A notary is supposed to verify the person with some sort of identification. This is to ensure the person's identification actually does match the signature. So, it is possible the notary failed to perform this duty.
When a notary fails to do the duties of his/her job, and take the precautions to ensure the legality of a signature, they can be held liable. But, not all notaries have an obligation to ensure the identification is not a forgery. In some states, if an ID looks to be authentic, the notary usually is not required to take any further steps. A few states require notaries to also include a fingerprint on the document.
So notaries are a defense against fraud, but the system is not all-inclusive. There are many cases of fraudulent transactions involving quitclaim deeds. If a person has an interest in a quitclaim deed, which has been involved in a fraudulent claim, they will need to contact a real estate attorney. The real estate attorney can advice them on what, if any, legal action may be taken against a notary, and how to protect their interest in the property.
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Before you plunk down your hard-earned cash for what seems to be the perfect home, step back and take time to consider the following.