An Overview Of Real Estate Law

Real estate law includes both federal and state issues, with the state-level rules varying widely from state to state. These state and federal laws encompass everything from ownership of land and buildings to related issues such as financing, leasing, construction, taxes and environmental laws.

The Law Office of Stephen A. Martin can protect your interests in both routine and complex transactions and disputes. Based in St. Charles, our Missouri law firm serves clients throughout the St. Louis area.

Real Estate Brokers

A seller may employ a real estate broker to solicit potential buyers for his or her property. The seller and the broker sign a listing agreement, obliging the broker to work to find a buyer and the seller to pay the broker's commission if a sale results. A buyer may employ a real estate broker to locate suitable property. Real estate brokers are generally subject to rigorous licensing standards established by each state. As an agent, a real estate broker or salesperson has duties and obligations to the person who hired him or her. If an agreement to purchase the property is made, that agreement is strictly between the seller and buyer, and the broker is not a party to that agreement and generally makes no promises about the property.

Real Estate Contracts And Transfers

The agreement to sell between a real estate buyer and seller is governed by the general principles of contract law. The statute of frauds requires that contracts for the sale of real property be in writing. Title to real estate must be marketable to be free from liability, which means that it must be free and clear of all encumbrances, liens, clouds, litigation risks or other title defects. To ensure marketable title, the buyer typically employs an attorney or a title insurance company to perform a title search. In a title search, the searcher examines the public records in the county in which a property is located to map a chain of title by examining all the recorded deeds concerning the property. The title searcher will also determine if there are any encumbrances on the property such as mortgages, unpaid real estate taxes, liens for municipal improvements, unpaid federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants and easements. A title insurance company will insure the buyer against losses caused by the title's invalidity.

To pass title, the seller must execute and deliver a deed with a proper description of the land. Many states require that the deed be officially recorded to establish ownership of the property and to provide notice of its transfer to subsequent purchasers.

Mortgages

The most common method of financing a real estate transaction is through a loan secured by a mortgage on the property. A mortgage involves the transfer of an interest in land as security for an obligation. A borrower typically repays a mortgage in installments that include both interest and principal payments. If the borrower doesn't make payments, foreclosure can result, with the lender declaring that the entire mortgage debt is due immediately. Failure to pay the mortgage debt once foreclosure occurs results in the sale of the property to satisfy any remaining mortgage debt.

The actual foreclosure process depends on state law, the terms of the mortgage and whether other liens exist on the property. Many states allow late payments to avoid foreclosure, and many lenders attempt to work out a payment plan to avoid a foreclosure.

If a lender is threatening foreclosure, a borrower should immediately contact a real estate attorney.

Taking Action

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