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Magazine article, by Michael Eberth

'As is' article pertains to purchasing property.

(Click on slideshow to read article)

CONTACT: (313) 561-5700

Residential Real Estate - Michigan Law

Why do I need a real estate lawyer?

There are certainly other professionals who can help you with the purchase of a home and provide direction on what you should consider:

A real estate agent can advise you on the marketplace and what is available in your price range, as well as help you to consider aspects of a home that may be important to you (such as schools, shopping or commute to work).

An accountant or mortgage loan officer can help you determine the type of mortgage, the monthly mortgage payment and the estimated annual property taxes.  A mortgage loan officer can also help you with pre-qualifying for a loan.

An insurance agent can provide you with information on the type of insurance that you will likely need, as well as the cost and coverage limits.

But only a real estate lawyer can make sure that the terms of the purchase agreement (the most important document of any real estate transaction) are complete and protect your rights and interests.  This is why we strongly recommend that you consult with Nichols & Eberth, P.C., before signing a purchase agreement.

Nichols & Eberth, P.C., can assist you with all aspects of the transaction from beginning to end which may include the following:

  • Drafting and/or review and/or revision of an offer to purchase
  • Drafting and/or review and/or revision of a Seller’s Disclosure Statement
  • Activities related to the procurement of a certificate of occupancy
  • Review and/or revision of mortgage documents
  • Drafting and/or review and/or revision of a land contract
  • Drafting and/or review and/or revision of a bill of sale
  • Drafting and/or review and/or revision of a closing statement
  • Review of a commitment for title insurance and/or activities related to the clearing of title
  • Drafting and/or review and/or revision of warranty deed or quit claim deed
  • Drafting and/or review and/or revision of escrow agreements
  • Drafting and/or review and/or revision of affidavits
  • Telephone calls and/or correspondence with realtors, purchasers, sellers, title company representatives, mortgage company representative, tax authority representatives and others
  • Appearance at closing
  • Recording of a deed and/or related documents with the register of deeds

Should I consider buying a home in foreclosure?

Purchasing a home in foreclosure often appears to be a good value, but factors outside of the price need to be considered:

The purchase of a foreclosed property is often a “cash only” sale.

Are you allowed to view the actual condition of the home (inside and outside) before placing a bid? The home may be in need of extensive repairs that will drive up the true cost to you.

Are there tax liens or construction liens on the property that the winning bidder (meaning you) will have to pay?

Even after the foreclosure sale, the prior owner may have a right of redemption under Michigan law that allows them a fixed period of time to payoff the delinquency that caused the foreclosure and still keep the home.   This is typically six months from the date of the foreclosure sale  — however, sometimes this period is even longer.    If so, what is the deadline for the prior owner to redeem the property before the home can become yours?

What questions should I ask when looking at a home?

Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller or real estate agent’s answers are clear and complete.  Ask questions until you understand all of the information that they have given.  Make a list of questions ahead of time to help you organize your thoughts and arrange all of the information that you receive. The Department of Housing and Urban Development (HUD) Home Scorecard can help you develop your question list. Click on our “Legal Links” above to get to the HUD website.

What is a purchase agreement?

A purchase agreement (sometimes called an offer to purchase) contains all of the details for an offer to purchase a piece of property.   Remember that in all contracts involving real estate, if it is not in writing, it is not enforceable!

The purchase agreement is not binding until the document has been signed by both the buyer and seller.  Often in the negotiation process, there are a number of offers and counteroffers made by the buyer and seller until a signed agreement has been reached.  Items and conditions that are typically found in the purchase agreement include:

  • Legal description and common description of the property
  • Purchase price
  • Amount of earnest money or down payment
  • Features and fixtures which are to remain
  • Home inspection results
  • Anticipated financing
  • Closing date
  • Final inspection and move-in condition
  • Penalties for breaking the offer
  • Response time to accept the offer
  • Obtaining clear title to the property
  • Clean inspection report

Why should I get title insurance?

The short answer is that title insurance protects you.   A title insurance company will perform a title search on the property that you are looking to buy and make sure that the seller has “clear title” to sell it to you.   “Clear title” means that the seller is the actual owner.    The title search will also reveal any claims or liens on the property that must be paid in full as a condition of the sale.   If any claim or lien is overlooked, the title insurance protects the new owner from the later discovered claim or lien.

Why is a deed required?

A deed transfers ownership of property from one owner to the next. Deeds are recorded in the county where the property is located.  There are two types of deeds in Michigan:

Warranty deed - transfers ownership from seller to buyer and the seller guarantees that there are no other claims against the property.

Quit claim deed - transfers ownership from seller to buyer but the seller does not guarantee that there are no other claims against the property


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