PURCHASE AGREEMENT

A common mistake made by both home buyers and home sellers is the failure to obtain legal representation prior to signing a Purchase Agreement.  This Agreement defines the transaction and should be reviewed by your attorney before you sign it.  Sometimes these Agreements are prepared on forms supplied by real estate brokers and such forms may differ significantly from broker to broker.  In an attempt to address this problem, the Minnesota State Bar Association has prepared and approved a Purchase Agreement form (with appropriate addenda) for use in real estate transactions in our state.

There are a number of pitfalls which may arise after an offer has been made (or accepted).  These pitfalls include:

are building, water, percolation and/or septic inspections required?

who gets the earnest money if the sale does not close?

is the deal contingent on the buyer's financing?

is the legal description valid?

Is a survey needed? is personal property included in the sale?

All of these concerns should be addressed in your Purchase Agreement.  If you fail to do so, you may find a simple real estate transaction can become a major problem.

TITLE INSURANCE

Another common pitfall that real estate buyers may fall into is failing to obtain title insurance prior to purchasing real estate.  Title insurance protects against certain losses from problems that may arise after you have purchased your real estate.  These may include:

Wills which have not been properly probated and/or incorrectly interpreted.

conveyances by minors or delivery of deeds after a grantor's death.

the previous owner incorrectly stated his or her marital status.

fraud, forgery, mental incompetence, and clerical errors in land records.

These defects in title may adversely affect ownership of your real estate.  Even a small title defect may force you to incur legal fees.

Title insurance will assure you of a legal defense, in accordance with the terms of your policy, if a claim is made against you.  And, if the claim is covered under your policy, title insurance will reimburse you for your actual loss up to policy limits.

You may purchase title insurance through Montzka Legal Services regardless of whether we are closing your transaction, as Mr. Montzka is an agent for Attorneys' Title Guarantee Fund, Inc.  Or, if you wish, Montzka Legal Services can prepare a title opinion for you.  An attorney's opinion as to title provides you with different protection than title insurance.

CLOSING YOUR DEAL

Finally, with all of the things that can go wrong with a real estate deal, you should always have a professional close the transaction.  Even "simple" deals between relatives and friends must be properly closed.  Major and expensive problems have resulted from apparently straight- forward real estate transactions.  Among the numerous matters that must be properly dealt with are:

IRS tax forms must be filed.

recordability of your deed or other documents.

escrow monies for taxes or other matters.

the closing requirements of your title insurance policy.

Mr. Montzka and his support staff, including legal assistant, Ms. Wilcox, have experience closing cash and escrow deals, contract for deed transactions, commercial, construction, and refinancing mortgage arrangements.  Please call us to schedule a closing or to further discuss your real estate deal.

Consult legal counsel to determine the applicability of the information in this website to your circumstances.  The information contained in this website is not intended to provide legal advice to you and you should not rely on this information other than to obtain a general understanding of the concepts and terms discussed.

Please call Montzka Legal Services at (651) 462-4200 should you have any questions.