Montana Property Law


Mark Mackin - Attorney at Law               Office Phone  406-227-5237
Mobile Phone 406-422-8652

Buying Residential Real Estate

Buying real estate is exciting and challenging.  It is usually the largest single purchase in a person's life.  But, it commits you to  30 years or more of payments, taxes, maintenance, and insurance.   Getting it right is important.  You may, or may not, need a lawyer to help you.

 

Checking Out the Agent/Broker

The best way to find a dream-come-true that won't turn into a nightmare is to work with a competent Real Estate Agent.  Ask for a copy of their license. Ask about their "continuing education" credits.  Are they a broker or do they work for a broker?  Can they provide you with references?  Does the agent and their broker have a good reputation?  Do they have a record of complaints against them with the Better Business Bureau or their state licensing board.

Is the real estate agent working under a seller's contract (the agent will be serving the seller's interest) or buyer's contract (the agent will be working for the buyer)? Occasionally both seller and buyer are represented by the same agent. Be sure you know the realtor's relationship for each property you consider.

Real estate agents have a "fiduciary duty" to the person that pays for the services.  These duties include:

1. Providing services honestly and in good faith

2. Using reasonable care and skill

3. Keeping information confidential

4. Promptly communicating offers to the seller

5. Answering questions completely and accurately

6. Administering and distributing earnest money and other accounts

Comparing Properties

Always comparison shop.  A Multilisting (MLS) Realtor has access to many properties, not just their own contracted seller listing. 

Ask about the undesirable aspects of the property as well as the positive aspects.  Overall condition is important, including water and air quality even noise pollution in the neighborhood.  Ask questions about problems and take notes (remember the confusion factor).  The seller or the seller's agent must answer truthfully, but you have to ask unless disclosure is required by law. 

It is not impolite to ask questions in this situation; it's expected.  Look to see if the disclosure on the property lists the following:

1.  Plumbing and sewage or septic

2.  Water leakage of any type, including in basements

3.  Rodent and insect infestations

4.  Structural defects

5.  Heating or air conditioning problems

6.  Problems with property drainage

7.  Foundation instability or cracks

8.  Title issues (easements, etc.)

9.  Lead paint

10.  Radon or mold problems

11.  Water quality testing for a private well

12.  Known sex offenders residing in neighborhood. 

Looking for a home that fits your budget and family's needs can quickly become confusing.  Take a time out when you are confused.  Never make an offer or sign any contract under pressure.  And remember--caveat emptor always applies--Trust but verify.


Making an Offer

One property will begin to stand out in your mind even after full disclosure of its drawbacks.  Spend some time with your banker. Then negotiate a price your family can afford. Any buy/sell contract must be made contingent on securing a loan.  Anticipate some sleepless nights as you make an offer, hand over the earnest money and wait for a reply from the seller.

Give serious consideration to a property inspection, which may be done at the buyer's expense. Closing can be made contingent on resolving issues the inspector finds.  A home inspector visually examines a home's major structural, mechanical, plumbing and electrical systems.  The attorney can help you review the inspection report and negotiate with the seller for repairs or discount the price for needed repairs.

 Consider a professional home inspection, which may be done at the buyer's expense. Closing can be made contingent on resolving issues the inspector finds.  A home inspector visually examines a home's major structural, mechanical, plumbing and electrical systems.  The attorney or buyer's agent can help you review the inspection report and negotiate with the seller for repairs or discount the price for needed repairs.

The buy-sell contract will contain all of the terms of the sale:

1.  Names and addresses of sellers and buyers

2.  Earnest money paid

3.  Purchase price and down payment amount

4.  Financing arrangements

5.  Conditions, such as getting a loan

6.  Legal description of the property with easements

7.  Requirement for good and marketable title

8.  Property condition

9.  Closing and possession dates

10.  Statement of closing costs

11.  Who bears the risk if the property is damaged before closing

12.  Liens against the property

Before signing a buy/sell, you may want to have an expert review the contract. An attorney can identify problems or help you add needed conditions. 

 

Legal Title Issues

 Most brokered real estate deals include title insurance.  Different levels of title insurance coverage can be purchased.  The insurance includes a title search that reviews the public records od the property. The title search should reveal any title, lien or easement problems of record. The policy insures against loss due to certain title defects that didn't turn up during the title search.

 However, finding unrecorded easements and liens can be a problem. If you are buying a subdivided property, the easements may only be listed on the title of the original home site and the subdivision plat.  An easement is a right to use property, such as a utility easement.  Prescriptive easements, established by use over time, are more likely to be found by inspection of the property and in tax records.

Liens are a charge against a property to satisfy the current owner's debt. Unpaid tax liens, mechanics' liens, and mortgages are examples. These should be paid or assumed by the seller.  The lien holder should release any claim against the property in writing.

Your attorney can advise you as to the seriousness of these issues. 


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