A home sales transaction is a legal transaction involving the sale and purchase of a residence. Selling a house can often be a complex undertaking. A home sales transaction may involve a valuable property that, in many cases, holds a lot of sentimental value for the owner. A home sales transaction is sometimes conducted solely between the owner and a buyer.
In most home sales transactions, however, an agency relationship is necessary due to the complexity of the transaction. In most cases, parties are represented by other professionals which may include:
- Real estate brokers;
- Lawyers; and
- Any other necessary professional.
These transactions usually involve a house, but may also include other types of property, such as a condominium. Most home sales involve a straight-forward sale of a new home between a consumer and the construction developer. However, home sales transactions may also involve:
- A buyer purchasing a home from a previous owner;
- A buyer purchasing a home from a bank or lending company, such as a foreclosure sale; or
- A sale involving the court system, such as a judicial sale.
The laws that govern home sales transactions may vary by state. They may also vary depending on the type of property being sold. Numerous parties may be involved in a home sales transaction. These may include:
- The buyer;
- The seller;
- The mortgage lender;
- Other loan companies;
- A property appraiser; or
- A judicial official.
Are There Legal Regulations for Home Sales Transactions?
Yes, there are legal regulations for home sales transactions. In any real property transaction, a legal writing is required to conduct and finalize the sale. This is known as the real estate contract or the home sales contract.
Pursuant to the statute of frauds, all sales involving real property must be in writing. In other words, a home sales transaction cannot be orally agreed upon, as a court would not honor such a transaction without written documentation.
The real estate contract contains provisions related to the sale of the home. This may include:
- A legal description of the property being sold;
- The final sales price;
- The terms of payment; and
- Whether there are any necessary disclosures regarding the property.
Many home sales transaction contracts are standard, known as boilerplate, but some can contain very specific provisions, such as:
- An exclusive right to sell;
- Specific instructions regarding additions or changes to the structure;
- Non-litigation or arbitration clauses, wherein the parties agree not to sue one another in the event a dispute arises from the contract; or
- Any other specific issues that need to be addressed.
Is a Contract for the Purchase or Sale of a Home Binding?
Yes, a contract between the parties for the purchase and sale of a home is binding between those parties subject to certain conditions, known as contingencies. The majority of contracts for the purchase or sale of a home contain contingency clauses. These clauses permit each party to back out of the contract without any legal consequences if certain conditions are not met.
Contingency clauses provide certain conditions that must be met prior to the parties being legally obligated to complete the home sales transaction. If the contingency conditions are not met, the contract may be considered null and void and the party may back out of the contract without facing any legal consequences. There are many different types of contingency clauses. The most common include:
- A subject to financing clause;
- A subject to inspection clause; and
- A sale of home clause.
In a subject to financing clause, if the buyer cannot secure a loan, mortgage terms, or maximum interest rates that they seek, they can legally back out of the sale. The terms and conditions of this clause are defined in the sales contract.
In a subject to inspection clause, the buyer may back out of the contract if they are not satisfied with the outcome of the home inspection. The buyer may also change the offering price or attempt to negotiate with the seller to fix issues without legal consequences.
In a sale of home clause, if the buyer cannot sell their current residence for at least their asking price, they may back out of purchasing the new home without legal consequences. In most cases, it will require a good faith inability to sell, not just a buyer who is unreasonable with the terms of selling their current residence.
What are Some Common Legal Disputes in a House Sale?
Legal disputes may arise during a home sales transaction. These disputes are often connected with specific real estate issues, which may include:
- A defective title;
- Real estate fraud;
- An issue with securing the mortgage. In most cases, closing is not possible until the purchaser can secure a mortgage;
- A disputes involving a real estate listing;
- A disagreement regarding the valuation of the property; or
- Some issues with previous ownership, deeds, titles, or inheritance laws.
There are any number of disputes or issues that may arise in connection with a real estate contract. For example, there may be disputes over the final purchase price, payment terms, or other issues. A breach of the real estate contract may also lead to a lawsuit.
A dispute regarding home sales transactions often requires legal intervention. In these cases, the court will review the existing sales contract to determine whether a breach has occurred. In some cases, a dispute may be resolved through a careful examination of the sales transaction records.
In other cases, a court may be required to conduct a more detailed analysis in order to resolve the dispute. For example, if a party claims the other party did not pay them correctly, a court may be required to examine bank statements as well as the conduct of the buyer to determine what actually occurred.
A court will also be required to review the laws of the jurisdiction to determine what remedies are available. Generally, a damages award is sufficient to compensate the non-breaching party for their losses. In other cases, different legal methods may be required, such as an eviction notice or a forced sale of the home.
What are Some Legal Remedies for Home Sale Disputes?
In many cases, a home sale dispute may require litigation to fully resolve the issue. This may lead to a damages award being issued to the non-breaching party. A damages award can often compensate for the non-breaching party’s losses related to non-payment, fraud, or other violations.
In some cases, an action to quiet title can help to resolve a dispute. These proceedings are necessary when there is an issue regarding the title of the property for sale, such as a dispute over the true owner of the property, as well as other issues such as debt or easements. A quiet title proceeding can help clear the title of any encumbrances and thus make the property marketable.
Do I Need a Lawyer for Assistance with a Home Sale?
Yes, it is essential to have the help of an experienced real estate lawyer for assistance with a home sale. Selling a home or other residential property can involve many different legal issues. In addition, every transaction is unique. State and local laws which may apply to the transaction will also vary.
An attorney can provide you with advice regarding the sales process, review and edit documents related to the transaction, and represent you during court proceedings in the event a dispute arises from the transaction.