The Bushman Law Group

703.845.9070

Real Estate

Welcome to the Bushman Law Group Real Estate Section. Real Estate is a major field in people's private and public lives. Here, at the Bushman Law Group, we will handle your real estate needs. Real estate closings include drafting and reviewing the bargain and sale contract, lenders papers, and releasing any encumbrances on the property. We will disburse on payoffs and preside at the closing to ensure smooth transactions.

There have been many changes in the few years to buying and selling a house required by the federal government in order to make the process less confusing and clearer. For buyers, the process may have gotten easier. The U.S. government has made changes at very important parts of a real estate transaction that involve a loan that will be backed by Fannie Mae or Freddie Mac. Before examining those changes, let's understand the real estate transaction parts.

First, a seller will decide to sell his house. The seller will then contact a real estate agent who will list the house, or the seller will attempt to sell the house himself.

Second, a buyer will come to like a certain location that she no longer wants to rent as her correct residence, but she will desire a place of her own. The buyer may hire a real estate agent who will help her find a house or the buyer may, and in fact will, search for a house herself. Usually, the buyer will also pre-qualify at a bank with a lender at this point in the time line, so she knows how much she may be able to borrow to buy a house or condo. Please understand that a lender's prequalification letter does not necessarily mean the lender or bank will loan that amount to the buyer. It is at best an estimate.

Third, the buyer finds a house she wants to buy (I would recommend speaking with an attorney at this stage) (The attorney can but does not have to draft the contract, however, the attorney can offer a varying perspective on the transaction) and through herself or her real estate agent drafts a contract, puts down a down payment and sends the contract to the seller or his agent. It is very important to note that at this point, the Buyer and not the Seller choose the Settlement Agent. A settlement agent must be registered in Virginia to settle the transactions. Settlement agents can be attorneys or non-attorneys. The buyer's real estate agent may suggest title companies and settlement agents, but you are under no obligation to go with their suggestion. Keep in mind that title insurance companies are profit companies and can be owned by the real estate agent who represents you and is suggesting you use their company. The Bushman Law Group can serve as your settlement agent, and by choosing the Bushman Law Group you will have attorney's conducting the closing.

Fourth, if the terms of the contract are agreeable to the buyer, then the buyer will sign the contract. The contract will include the price of the property, how the property will be paid, when the property will close, when the seller will leave the property and buyer can enter the property, what constitutes a breach of the contract, what constitutes a default in the contract, what remedies exists if either party breaches or defaults, and importantly who will be the buyer's closing agent. The contract may contain a number of contingencies that prevent the contract from being binding. These contingencies may be based on the buyer obtaining financing, the home passing an inspection, the sale of an existing property owned by either party, the property appraising in value, or based on a court approval.

Fifth, the buyer will go to the bank and see the mortgage lender, The mortgage lender will give a good faith estimate (GFE) of the costs to closing the real estate transaction.

The GFE will state the origination charge: these charges are the bank's processing fee, application fee, administration fee, underwriting fee, document preparation fees, wire fees, broker fee, lender inspection fee, yield spread premium, and similar charges.

The Bank may also select companies that can do for you the appraisal, credit report, flood certification, Title Company, closing attorney or closing agent.

The bank will also tell you services they require, but you're allowed to shop around for: these services can be the Title Company, closing attorney, the survey, the home warranty, termite inspection and a couple others.

The GFE will also inform you of your state and local recordation taxes, transfer taxes, initial deposit for your escrow, daily interest charge, and homeowner's insurance (hazard, flood, earthquake).

Sixth, the buyer can take this GFE from the lender, and the lender must give you a GFE within three business days, and go to any other lender and compare the costs that each lender has (origination costs) as well as the costs for the services that the lender suggested to the buyer. The GFE will state how long these terms are open, and if the buyer accepts the GFE within that time period and the services suggested, then the government will ensure that origination costs, credit for the interest rate chose, adjusted origination charges, and transfer taxes will not change. However, some costs can change by up to 10%, such as the services they suggested and you approved, title's services and lender's titles insurance (if lender selected them OR you choose a company they identified), owner's title insurance, and government recording charges. When the buyer chooses a company not recommended by the lender the cost may increase or decrease by any amount: this would depend on the negotiating skills of the buyer or his agent.

Seventh, the buyer picks the lender. The lender will have the Buyer go through an extensive underwriting process. The underwriting process conducted by the lender is a process that at its simplest is the lenders guess as to how much you can afford to pay on a mortgage, and whether the property is worth the money you are contracting to purchase it at. The bank will look at your sources of income, your credit, your employment, and your other assets. The bank will also look at your expenses for grocery, clothing, utilities, association dues, taxes, and other miscellaneous costs. No bank is forced to lend money to a risky applicant. A buyer (also a "borrower") will have to supply countless documents to the lender proving they are qualified. At a minimum, lender requests for several years tax returns, current wage statements, permission to run a credit report, bank or brokerage statements. If you are self-employed, the process is even more tedious and the requests for information are a greater burden. Organization of your finances is key.

Eighth, during the underwriting process, the lender is communicating with the settlement agent. The settlement agent should be obtaining a title examination, reviewing the title exam, ordering a survey of the property, reviewing the survey, requesting pay off information on any liens shown on the title examination, drafting the deed of conveyance, powers of attorney if necessary, preparing a binder for the title insurance. The closing attorney checks to see if there are any judgments or liens against the property and that there is a marketable title. The attorney checks for easements or other irregularities with the property. The settlement agent will arrange a time to close in accordance with the contract and the parties.

The parties arrive at the settlement attorney's office. The seller signs the deed conveying the property to the buyer. The buyer signs all the paper work that the bank requires. At this moment the buyer will be given a HUD-1statement (a financial statement detailing the costs of the entire transaction), which will compare the costs as they were quoted on the GFE to how the actual costs occurred. If costs change that were not supposed to change or changed more than they were allowed to change, then the lender must pay the buyer for the difference.

Ninth, the settlement attorney will take the deed down to the courthouse where most land recorders' offices are located. The attorney will search the land records to make sure the seller has not conveyed the property to anyone else, received any new judgments or liens since the title examination. If there are no surprises the attorney will record the deed with the land records clerk.

Choosing an attorney to conduct the settlement is the smart choice. An attorney is a licensed professional registered with the Virginia State Bar and subject to its disciplinary action. The attorney should have mal-practice insurance and ask them to make sure. The attorney not only spent time to understand the law, but attorneys can give legal advice: legal advice that you can count on or sue them for mal-practice. Attorney can explain the difference between the various forms of ownership. An attorney can review your survey and inform you of encroachments and easements and what your rights are. Don't pay attorney prices for non-attorney work.

F.A.Q.

  • Do I need an attorney before I purchase a house?

    No, there is no law that mandates the employment of an attorney, however, an attorney experienced in real estate issues can be a valuable resource saving more money than any extra cost. In most circumstances, a real estate attorney as a settlement agent is competitive in pricing.

  • How can an attorney save me money

    Certainly, an attorney does not operate like a bank to save you money be depositing money. A lawyer can save a client money by reviewing the circumstances and documents for potential problems down the road. By identifying problems and providing solutions upfront, an attorney can save time and money before a problem has a time to grow in size.

  • What type of issues does can attorney assist with.

    Although a buyer is represented by a real estate agent and an attorney at the same time, the focus of each representative is different. A real estate agent's main focus is on identifying the client's real estate needs and desires then matching those needs and desires with what is available on the market. Incidental to an agent's real estate license is the ability to provide limited negotiating and drafting in regards to real estate contracts. An attorney can review the Promissory Note and explain the defenses a buyer may have or is waiving. An Attorney can review the Deed and explain easements and covenants. Most importantly, no real estate agent, who is not a practicing lawyer, can inform you of any remedies by the subsequent breach of either party or explain how the issues will proceed at court. You need an attorney to give such advice. Obtaining that advice in the beginning and allowing the attorney to review the documents and circumstances may prevent or limit substantial litigation based on the attorney's experience.

  • I own property as a Joint Tenant? What does that mean?

    Ownership as a Joint Tenant in Virginia without the Common Law Right of Survivorship is no different than owning the property as a Tenants in Common. Owning property as Joint Tenants with the Common Law Right of Survivorship means that the owners are united in Time, Title, Possession and Interest, so that upon the death of one of the Joint Tenants, the surviving tenant(s) gain the decedent tenant's interest.

  • I own my property as Tenants in Common with a friend, can I sell my interest in the property without my friends consent?

    Yes, as a Tenant in Common your interest is alienable and devisable. Alienable means that you may offer the property for sale to another. Devisable means that your interest in the property can be conveyed after your death by a Last Will and Testament or the property may pass by operation of law to your heirs at law. However, if you have entered into a contract with your friend, then you may be subject to a partnership agreement restricting your ability to sell the property.

  • My mother owns our child hood home as Joint Tenants with the Common Law Right of Survivorship with my brother, she has since passed away, do I have an interest in the property?

    No. Your brother by operation of law is the owner of the real estate.

  • My mother transferred her property to herself and my sister as Joint Tenants with the Common Law Right of Survivorship, with the precise understanding that my sister, upon my mother's death, would transfer my share of the house to me, is this legal?

    Yes and No. Your mother gave your sister an interest in the real estate. The interest is a gift if your sister did not give fair market value for the interest. Your sister's interest is that she will own one hundred percent of the property by operation of law if your mother predeceases her. Your mother's plan is relying on the good will of your sister to follow through with her direction, and without other affirmative written declaration you may not have any recourse if she does not follow your mother's desire.