graphic of when should you hire a real estate attorney

When To Hire A Real Estate Attorney?

The buying and selling of real estate is one of those areas where you have many experts working to help you out at different points in the process.  A common though process that people may have is do I need an attorney to help me with my real estate transaction.  The answer is that it does not hurt to start a conversation with an attorney so that when the need does pop up the your attorney is up to speed and ready to help you.

Even where you have a transaction that is a simple purchase of a home where you have a real estate agent working for you, the seller has a real estate agent working for them and you will be closing the sale through a local title company an attorney can protect your interests by looking at things from your particular legal perspective.  That is not something you will get from anyone else but your attorney who is familiar with your situation.  There are other unique situations where having a real estate attorney help you out will be in your best interests as noted below.

For Sale By Owner

If you are selling your home For Sale By Owner (FSBO) then it is advisable that you contact a real estate attorney prior to your listing your home and have your attorney review any purchase offers that come to you from buyers. A purchase offer can be a simple document that offers to purchase a home for a certain amount of money. Once signed by both the buyers and sellers the written purchase offer becomes a contract and is a legally binding document on both the seller and the buyer. Problems do arise where the buyers and sellers agreed on one thing verbally but failed to capture it all in writing. By having an attorney check to make sure what is house key chain with keysbeing agreed to with the purchase offer is in the contract you reduce the chance of a lawsuit ruining your chances of completing the deal.

Failure to add language into a FSBO purchase offer with regards to inspecting the property for defects and a requirement that the property be appraised at or higher than the amount being loaned can leave the buyer in a bad situation. The language used by real estate agents in their board approved documents contains all the required terms that provide for inspections, appraisal requirements and more. By attempting to create a purchase offer document yourself or by using canned language you found on a website somewhere you might be setting yourself up for bigtime failure.

Websites on the internet providing documents to help you purchase a home don’t always have the required language that is required local laws.   By trying to save money and using canned purchase offer language you could be missing crucial requirements that prevent you from using an inspection as a reason to walk away from a home purchase. You may have an inspection performed on the home you are about to purchase but when you find out the foundation has major issues, if your purchase offer language was not correctly drafted you may still find yourself in a contract to purchase that home with the problems and all. Certainly you don’t have to close on the home, but the home seller can also turn around and sue you for failing to complete the terms of the contract. By sitting down with an attorney beforehand and discussing your goals and desires, you can have your attorney draw up a properly prepared purchase offer that protects you in the event there is something wrong with the home or with the purchase process.


Going through a divorce is a process that may or may not be complicated depending on custody and asset division issues if there are any. Add into the divorce process the need to sell a house then things can get more complicated. Especially where there may be equity in the house or where both spouses are on the mortgage the need for a real estate attorney to assist in the process and represent each spouse best interests makes sense. If one has an attorney representing them the other spouse should also have their own legal representation in order to make sure their interests are adequately protected.

During a divorce emotions can be elevated and as a result clouds ones judgement as how best to proceed with regards to selling a home. One party may wish to keep the home but may not necessarily be able to afford the mortgage whereas the other spouse wishes to sell. If a mutual agreement is not happening between the spouses on how to deal with the home then the attorneys for each spouse can try and negotiate an agreement or they can request a judge make a determination. Either way by having an attorney help you with your real estate issue while going through a divorce you can rest easier knowing there is someone looking out for your interests.

Post Sale Problems

You have closed on your home purchase and now are encountering problems with your home. Some problems may just be routine problems that are commonly associated with home ownership. Clogged toilets and slow drains are nothing really to be concerned over and are considered something the new buyer should be able to take care of when they purchase a home. On the other hand if during a heavy rain storm you discover the sewer backs up into the basement and that this was in fact known to the sellers but they did not disclose the matter to you, you may have grounds for suing the sellers for the failure to disclose.

The facts and circumstances surrounding undisclosed home problem need to be explored further in order to determine if there is legal liability. If you as the buyers did not know about the problems and would not be able to learn of the problems when you were getting ready to buy the home this leaves it upon the sellers to disclose if they know about the issue. The seller’s failure to disclose a material fact that impacts the value of the home means the buyers can sue the sellers.

The types of seller failure to disclose issues you should discuss with a real estate attorney include mold contamination, water damage issues, foundation and structural issues, roof issues, and more. Especially where the problems are major and should have been disclosed but were not then sellers can be held liable for their lack of disclosure. Even worse a court can order punitive damages be paid by the sellers for their failure to disclose or a court could undo the purchase transaction and force the sellers to take back the home and return all monies to the buyers.

Commercial Real Estate Transactions

Whether you are selling, buying or leasing commercial space the protections afforded sellers, buyers and tenants in the commercial real estate area are much less than those found in residential real estate transactions. Having an expert real estate attorney review leases or purchase agreements for you ensures you are not unknowingly giving up rights or becoming obligated for something more than you intend to. Also by having an attorney relationship men in ties with hard hats looking at construction plansdeveloped ahead of time should the need arise for a quick legal review due to time tight frames involved your attorney should be able to provide you input pretty quickly. Whereas on the other hand if you wait until the last minute to consult with an attorney you have never met about an offer that expires soon you may not get the priority existing clients are offered.

Final Thoughts

With the large sums of money involved in real estate it is always best to discuss your plans and needs with a real estate attorney ahead of time. By establishing a relationship with your real estate attorney before an immediate need arises you are ensuring that your attorney knows your goals and can step in when needed to deliver timely input. The attorneys at Finney Law Firm are ready to help you with your real estate and other needs, contact us today so we can help you accomplish your goals.

Do you have any questions about the services above?

Paul Sian is a licensed attorney in the States of Ohio and Michigan.  If you feel you need the services of an attorney or have questions about any of the services named above feel free to contact me at [email protected] or via phone at 513-943-5668.  Connect with me on Twitter and Facebook.

infographic of the 10 things Finney Law Firm can do for you

10 Things Finney Law Firm Can Do For You

Often times when people think of attorneys they think of lawsuits or criminal charges and as a result that is why they need an attorney. While attorneys are needed to help you deal with lawsuits and criminal matters that is not the end of the list of what an attorney can help you with. To help you get a better idea of how an attorney can help you I have compiled this list of 10 things that Finney Law Firm can do for you. While this list is by no means an all-inclusive list it is designed to show you areas where Finney Law Firm has the expertise to help you work through a matter and save you money or save you from legal headaches in the future.

1.  Real Estate Matters

In many states in the U.S. (Ohio and Kentucky are no exceptions) attorneys are involved in many of the steps of the real estate buying and selling transaction. Often times attorneys are involved behind the scenes in reviewing contracts, legal documents, preparing title opinions and more. In certain states attorney have more hands on involvement in that any closing involving real estate is done by an attorney or under their direct supervision.

Finney Law Firm attorneys can assist individual buyers and sellers in the buying and selling process for both residential and commercial properties. As a real estate buyer you can ask an attorney to look over your offer to purchase a home to make sure it represents your best interests. Sellers may also want to hire an attorney to review any purchase offers and explain to them the requirements they will be bound by if they accept that offer. Some land purchases involve more complicated matters like mineral rights, multiple pieces of land being sold in one package, or liens by having an attorney represent picture of seller disclosure statementyou gives you get extra protection by having the legal considerations addressed by someone trained in those matters.

2.  Business Planning

Are you planning on starting a new business, incorporating an existing business, or changing the corporate structure (i.e. going from an S Corporation to a C Corporation) of your current business? Many activities related to business planning should have an attorney involved in order to make sure everything is done properly. Changing your business status from a sole proprietor to a Limited Liability Company or a corporate form without doing the proper paperwork for taxes will leave you at risk with the federal and local tax authorities. While you may have unintentionally not filed some of the proper tax paperwork that will not stop any associated penalties. By working with a Finney Law Firm attorney you can be assured all your paperwork will be properly prepared and you will be fully informed as to what each document means to you in your business.

By working with an attorney to properly prepare your paperwork you have someone who is familiar with your business and will be ready, willing and able to help you should the need arise. While you can go hire an attorney at a moment’s notice to help out with legal issues, that attorney will not be as familiar with your business as one who has been working with you on an ongoing basis. For more information on the LLC form of a business see LLC see the article Why Do You Need An LLC.

3.  Family Planning/Estate Planning


Planning on getting married soon? Do you and your spouse have assets you want to keep separate in case of divorce? While the love and bliss of courtship lead you to think the relationship will last forever things and people do change. If you or your significant other own part of a family business, own your own business, have a large sum of assets from inheritance or from earnings then it is advisable to get a pre-nuptial agreement prior to getting married. A pre-nuptial agreement is a document that can protect assets for both of the people about to be married. Unless properly prepared by an picture of fighting couple for divorce and family lawattorney and taking into account all assets a pre-nuptial agreement may not be worth much in the event of divorce. Therefore pre-marital planning should involve an attorney and the couple about to be wed. In many cases it may be best for each person to have their own attorney look over the pre-nuptial agreement to represent each person’s best interests.


Now if you are married and have kids there are other considerations to take into account. Those considerations mostly revolve around making sure your children and/or spouse are taken care of in the event of your passing. This is where sitting down with an estate planning attorney comes into play. An estate planning attorney will sit down with you and review your assets and your goals for your assets in case of death. This could involve setting up trusts for your spouse and/or children, guardianship arrangements for minor children, living wills, health care power of attorneys and more.

Depending on the amount of assets you have to give to your family and how you want to distribute those assets a trust may be a better option for you. A trust not only preserves your assets for your children it can also make sure you children still get their inheritance in the event your spouse later remarries. Inheritance can get quite complicated so it is best to talk with an estate planning attorney to make sure your assets are distributed the way you want them to be. For more information on wills and guardianship see my article How a Will and Trust Factor Into Your Estate Planning.

4.  Legal Document/Contract Review

Have you been suddenly presented with a legal document with request for signature? Do you know what the document is meant to do and how you may be legally bound if you sign the document? If you don’t know what the language is saying or how it will impact if you sign it then by all means you should be speaking with an attorney to have them look over the document and explain to you what exactly is being asked of you. Common examples of legal documents you may be signing throughout your life include documents related to the purchase and sale of real estate, purchase or sale of a business, non-disclosure agreements for work or other purposes, waiver or release of liability paperwork, settlement documents and more.

Signing any legal document without having full understanding of what sort of obligations you may face is asking for trouble. While the language may not talk in dollars and cents terms you could end up owing plenty of money if you signed a legal document and then failed to do what was required of you under the terms of the document. An attorney will be able to review your legal document document for signatureand give you an opinion on what it is asking for and what risks you face in signing the document. Don’t sign just because the person giving it to you says it is ok, get another opinion before it is too late.

5.  Labor and Employment Law

Do you run a business where you are responsible for the hiring and firing of employees? Want to make sure any terminations or hiring are done correctly and there is minimal risk of you being sued for discrimination? Or maybe you are wanting to setup health plans or retirement plans for your employees and unsure of the way to go about setting up those plans?

If you answered yes to any of the above questions then you should be talking with a labor and employment law attorney who can prevent you from taking the wrong moves which end up costing you money and more. Having an effective attorney advocate at your side assures you that you can concentrate on working on your business while any legal issues are promptly dealt with for you.

6.  Bankruptcy

Unsure if you can manage paying off your debts? Afraid of losing your house because you are behind on payments? Worried that your debts are impacting your health due to the constant stress? Or maybe health related expenses have hurt you financially. All of the above situations can be resolved through filing for bankruptcy. You will not know if bankruptcy is suitable for your situation until you sit down and discuss your situation with a bankruptcy attorney and learn about what filing for bankruptcy means.

In bankruptcy you are asking a bankruptcy court to set aside your debts under Chapter 7 (not all debts may be discharged) or to reorganize your debts into a more manageable payment plan under Chapter 13. Determining which Chapter will work best for you is a decision to be made in conjunction with a bankruptcy attorney. picture of a wallet in a viceBusinesses as well as individuals are eligible to apply for bankruptcy when they are unable to pay their debts.

7.  Taxes, Taxes and more Taxes

Unaware of what taxes your need to pay for your business? Want to pay less to the Tax Man and let your family inherit more? Own a piece of property that you think you are paying too much taxes for? All of the above are matters that can be addressed by an experienced attorney at Finney Law Firm.

Business planning involves dealing with tax matters and understanding all the tax jurisdictions involved. Not only do you have to consider federal and state taxes but there are also the city, municipality, and possibly county taxes to take into account. Miss any payments to one of these tax collecting entities and your business will be at risk. By sitting down and discussing with an attorney what your business does and where it will be performing its business your attorney can better advise you as to what taxes you need to make sure are paid.

Property tax is another big issue for both residential and commercial land owners. Property tax collectors sometimes base their tax collection rates on the overall health of the real estate market in a region as opposed to your specific piece of land. Maybe you have change in situation that has lowered the value of your property but your property taxes still remain where they were before. An attorney will be able to look at your particular situation and then prepare the proper paperwork to request that your property valuation be looked at in order to get a possible downward adjustment in value thus reducing your property tax payment.

As mentioned in item 3 above a will can help you take care of your family in the event of your passing. Wills along with trusts can also shield your assets from estate taxes that can be charged to your estate. Also known as the “Death Tax”, this tax on your wealth can be minimized depending on the amount of wealth and how you deal with it now. As each individual has their own unique asset situation a consultation with an Estate Planning attorney will help you best decide how much of your assets get caught up in the “Death Tax”.

8.  Litigation

When faced with litigation the last thing you want to do is ignore any requests for information nor do you want to provide answers without the guidance of an attorney in order to save money on legal bills. The answers and the way you answer pre-litigation questions (depositions and/or interrogatories) can make or break a case for you. Therefore it is in your best interest to answer these questions with an attorney present so they can stop you from answering questions you should not be answering. By having an attorney represent you in litigation from the beginning you are bringing along a valuable partner who not only will have knowledge of your case but also have the skills to defend you in a court of law. If an attorney has to be brought in later to a litigation matter it will usually be the case that they will have to spend more time in order to become fully informed of the situation which will cost you more than if you had hired an attorney at the start.

Whether you are being sued for something your business did, something an employee of yours did or you are suing someone who injured you the attorneys at Finney Law Firm have a great depth of picture of gavelbackground and litigation experience to assist you in your litigation matter. Finney Law Firm has successfully litigated cases related to caregiver abuse of children, business transactions, personal injury cases, failure to disclose in residential and commercial real estate matters, contract disputes and more. Finney Law Firm has won a number of cases that have went before the U.S. Supreme Court.

9.  Personal Injury

If you have been injured by someone or someplace where the situation was preventable you may want to discuss your injuries with an attorney. Especially where you have suffered losses due to being unable to go to work, out of pocket medical bills, or other pain and suffering you may be able to be compensated for those losses. A lot of this depends on how the injury occurred and whether or not someone’s negligence leads to your injury. By talking with an attorney you get a better idea of where you stand if you do wish to seek recovery for your injuries.

10.  Criminal Matters

Are you being charged with a crime? Whether that crime is driving while under the influence (DUI), reckless driving, theft or something else having an attorney represent you for the criminal trial is your right. In order to determine the severity of the charges and the amount of jail time or fines you can face you need to speak with an attorney as soon as you are able to. Facing a criminal charge is not picture of prison cellsomething you should try and handle on your own as those who will be prosecuting you are professionally trained. By having a knowledgeable and experienced attorney like those found at Finney Law Firm on your side you can be assured you will be getting the best representation possible.

Do you have any questions about the services above?

Paul Sian is a licensed attorney in the States of Ohio and Michigan.  If you feel you need the services of an attorney or have questions about any of the services named above feel free to contact me at [email protected] or via phone at 513-943-5668.  Connect with me on Twitter and Facebook.

Why You Need A WillA Will/Trust Can Offer Peace of Mind


Guardianship:  “A legal guardian is a person who has the legal authority (and the corresponding duty) to care for the personal and property interests of another person…”  Wikipedia “Legal Guardian”

Heir:  A person (can be a relative or non-relative) who inherits some physical, real or monetary property under a Will.

Probate Attorney: An attorney who specializes in estate planning, Wills, Trusts, and Probate.

Trust:  A relationship whereby some type of property (usually money but can be financial assets like stocks, bonds and personal/real property like a home with real estate, a car, jewelry etc.) is held by one party (Trustee) for the benefit of another (beneficiary).

Will:  A Legal document which expresses a person’s desires for distribution of their assets, guardianship designations for their underage children, designation of the Executor, burial preference and more upon their death.

The Will and Estate Planning

Under a will you can dictate how your assets will be distributed upon death.  The biggest benefit with this is your family members will have less reason to fight over your belongings after death since you have stated who will get what in the Will.  You can either give everything you own as a whole to whomever you choose (there are limitations for this if you are married) or you can separate out your assets and indicate how particular assets are to go to particular people.  For instance if you have a classic car that you and a sibling worked on and you would like for that car to be given to your sibling that can specified in the Will.

In the case where you are married, state laws usually prevent you from completely disinheriting your spouse.  That means you cannot say in your will that your spouse gets nothing and instead all your money should be given to someone else.  If you are at the point in your life where divorce is being considered, after the divorce has been finalized you should have a new Will made.   Children under the age of 18 are also usually protected from being Last Will and Testamentdisinherited under the Will through state laws.

Wills should generally be stored in a fire proof safe within the house.  Putting a will in a safe deposit box adds extra steps to the process since  a court order must be obtained in order to get access to the safe deposit box after death.  There also should be only one executed original of the Will.  Multiple executed copies of the Will can cause confusion and slow down the process in the event new Wills were prepared at a later date with new instructions.

Why a Will?

One of the constant things in our lives that experts are always talking about is death and taxes.  Until they can figure out a way to extend our lives to make us immortal or figure out a way to give everything to everyone at no cost, both death and taxes are matters that we should take time to think about.  One should not dwell on those topics with a negative sense of impending doom, but understand that if we are not around our loved ones still need to be taken care of.  With proper planning one can make sure our loved ones are provided for of in the event something does happen to us.  Yes there are life insurance and retirement accounts which offer protection to our family members in the event of our passing.  But did you ever stop to consider how is that money from the insurance and retirement accounts distributed?  Normally money from life insurance or retirement accounts  are given out based on the instructions in the beneficiary forms we all should have filled out when we set up those accounts.  Simple enough?  Maybe not.  What if your children are the only living people who will be inheriting from your accounts and they are under the age of 18?  What if you forget to fill out the beneficiary forms?  While most state laws would prohibit under age 18 children from receiving those monies outright, the state will give that money to some adult (usually a relative if there is one) to hold and manage that money for your children.

By not having a Will you have given up that choice of who should hold and manage the money for your children.  It is possible the court may give the money to someone who may not be ideal with managing their own money and may run into problems when faced when managing money held for your children.  While courts will try and give the money to the best choice available it is not always guaranteed since they don’t know your family and friends like you do.  Yes we all have our trustworthy relatives who most certainly can manage and hold the inheritance money until the kids are above age 18, and by naming them in the Will as Guardian or Trustee you know you made the decision and did not leave it to someone else.

Of course there is also the idea of your child getting full and unrestricted access to a large amount of money at age 18.  Just like that, your children can have access to a large amount of money at age 18 to spend as they like.  Yes the wiser among our children will use that money to put themselves through college and work on improving their life.  But without our guidance and input some children may be tempted to instead get a fancy new sports car to take them to and from their college classes.  Too many bad financial decisions are made when one is younger and as a result any inheritance a person may have can quickly run out.

The above scenarios are exactly where a Will can come in handy and prevent money from falling into the wrong hands or from being spent unwisely.  By setting up a Trust you can designate how the money will be distributed to your children, who will hold and manage that money, and you can even distribute the money over time to your children.  Through the use of a Trust you can set age limitations and education requirements (i.e. certain amounts are paid out to children only after getting a college degree) so as to limit when your child can get full access to the money.  While an 18 year old may not be able to handle a large sum of money at one time, a 23 year old who has went to college and worked some should better be able to handle their finances.  All of this and more can be done with the use of a Trust.


In the case where we may pass before our children are above age 18 a Will can also be used to set up Guardianship for our children.  Under the Guardianship provisions of a Will a person can name anyone over the age of 18 to be the legal guardian for their minor children in case of death.  In the absence of a Will stating a preference for Guardianship Probate Court will try and find close relatives to assume Guardianship of children under the age of 18 regardless of what your preference might have been.  With no legally signed Will the court can only guess what a person would have desired and instead will usually look at who best is capable to care for children while they are under the age of 18.

Additionally if there was no Trust set up to provide for children under the age of 18 the guardian of the children will most likely also get supervisory duties for any money the children have inherited.  Under this scenario the guardian is “supposed” to use the money for the children they are caring for, whether they do or not is another story.  A Will which names one person as guardian and a Trust names a separate person as Trustee allows an extra layer of protection for any inherited money.  Of course the extra layer of protection also requires extra steps to follow which may slow down the process of getting money to children when they need it.

The decisions to name particular people as guardians for your children should be discussed with the potential guardians ahead of time so there are no surprises.  Guardians can be grandparents, aunts and uncles, close friends, siblings who are over the age of 18 and more.  Naming non-relatives as guardians when you still have blood relatives who would want to care for the children could result in court battles.  Discussing before hand your desires with both the guardians and your blood relatives of your wishes can help prevent unnecessary fighting down the line.

The Trust and Estate Planning

The commonly recommended form of Trust to set up is called an “inter vivos trust” which basically means a trust set up during the lifetime of a person.  This type of trust can be funded at the time of creation or left unfunded.  To fund the trust upon creation you can use most any assets you currently have and transfer them into the trust.  If you have an unfunded trust the proceeds from life insurance, retirement accounts, and any remaining assets named in the Will can be directed into the trust upon death.  The person setting up the trust can act as the initial trustee if so desired.

Upon death or incapacity the Trustee for a trust can either be an individual or can be specific trust companies who are setup to manage trusts.  You can name any person as Trustee under your Will and should pick someone you find to be trustworthy with managing money.  Trust companies are usually registered businesses with fiduciary and legal obligations requiring proper maintenance and management of trust Trust as part of a will.accounts under their control.  Management costs associated with trust companies will generally be higher so it may only make sense to use them when there are large sums of inheritance money to be managed.

Additional Documents

A Probate Attorney who specializes in Estate and Gift Law would be best able to help you in preparing your Will, Trust and Guardianship Papers.  The Probate Attorney would sit down with you to discuss your individual and family situations in order to best draft a Will for you.  If you are married your spouse should attend along with you as your  spouse may have a mirror image Will that often names the same people as guardians, trustees and relatives who will inherit under the Will.  You should also look into getting a Power of Attorney (POA), Health Care Power of Attorney, and/or Living Will documents.

With a Power of Attorney document there are different types to consider but the main one recommended is a POA document that only comes into effect if you are somehow incapacitated and unable to make decisions.  This type of POA will help your spouse or children make decisions for you when you cannot.  Those decisions may include dealing with the mortgage company, filing taxes, selling certain property and more.   The amount of power given in that POA document can be tailored to your desires and needs.

With regards to health, there is the Health Care Power of Attorney document which allows someone to make medical decisions for you in the event you are unable to.  This is also a helpful document to have in that it can be presented to a doctor or hospital by your spouse, adult child or someone else you trust who can then be able to make medical decisions on your behalf.  Without a Health Care Power of Attorney someone you trust to make decisions for you may get little say in medical treatments a doctor may propose.

Adding on to the Health Care Power of Attorney is a document called a Living Will which allows you to state whether you wish to be maintained on life support indefinitely.  Some people wish to express a desire to not be maintained on life support whereas others prefer to be maintained on life support.  This is not a  document you must have, but it is something that you should be aware of in case you do want to make that preference be known.

Final Thoughts

A Will and Trust are valuable estate planning tools for taking care of your family when you are gone.  A Will ensures your assets are distributed according to your wishes and can be used to appoint guardians for underage children.  A Trust can protect your assets from estate taxes upon death and can provide for more control over how your assets are distributed.  Only by sitting down with an attorney and discussing your plans, desires and needs can you fully accomplish what you want with a Will, Power Of Attorney, Health Care Power of Attorney, or Living Will.

Do you need a Will, Power of Attorney, Health Care Power of Attorney, Medical Directive or do you have more questions about those documents?

Paul Sian is a licensed attorney in the States of Ohio and Michigan.  If you would like to have a will, power of attorney, health care power of attorney, medical directive prepared for you or someone in your family or have questions about your existing documents feel free to contact me at [email protected] or via phone at 513-943-5668.  Connect with me on Twitter and Facebook.

Real Estate Contracts You Will Encounter During a Home Sale or Purchase

Real Estate Contracts You Will Encounter During a Home Sale or Purchase

Definitions used in this article:

Implied Contract: A contract created by actions of the parties involved and is not always in writing.  Courts usually look for a meeting of the minds to determine if an implied contract exists.

Explicit Contract: A contract created by a written document which is signed by all parties involved with the contract.

When buying or selling a home you will come across a number of different contracts that you will sign as part of the process. You may be wondering what all these contracts are and how do they impact you. This post provides a general explanation for the various contracts used in a real estate transaction and the functions they read the fine print in real estate contractsserve in the transaction process.

Buyer Representation Agreement

A Buyer Representation Agreement is an agreement between the home buyer and a real estate agent. The agreement generally states that the real estate agent will get a commission by helping the buyer find a home and assisting in the process of buying the home. The assistance aspects include taking the buyers to homes they want to see or suggesting homes for them to see; preparing the offer in accordance with the buyer instructions; negotiating on the buyers behalf with regards to any matter related to the home purchase; guiding the buyer along the home purchase process and more.

This type of contract should be in writing (explicit contract) to have maximum effect. Sometimes these agreements will also state that the real estate agent is due a commission regardless of whether or not the buyer uses the agent’s services or showed them a particular home. Some agreements may only require the payment of a commission if the real estate agent is the procuring cause of the sale (i.e. the agent showed a particular home to the buyers).

Sometimes a real estate agent may forgo having their buyer sign this type of document in order to not make the buyers feel pressured. Those agents may be proceeding under the assumption that they are under an implied contract with their buyers.  If the buyer who has not signed any agreement happens to purchase a home without the help of their real estate agent or another agent happens to put in an offer for the buyer, the agent may not be entitled to a commission. Whether the agent will get a commission will depend if it can be shown that they are the procuring cause and whether or not their broker will pursue a lawsuit to get the commission.

Seller Representation Agreement

A Seller Representation Agreement is an agreement between a real estate agent and a home seller for the purpose of listing the seller’s home on the market for sale. Generally most real estate brokers want these agreements to be explicit contracts signed by both the seller and the agent representing the broker so as to avoid any confusion as to duties and rights. Many states have laws governing the marketing of real estate by licensed real estate agents and usually do have other forms for the sellers to review and sign in order to indicate their understanding of how the real estate agent they have hired will work when it comes to representing them and other buyers and sellers.

The seller representation agreement usually has a start date, end date, terms regarding what will go and what will stay with the property, language regarding use of advertising signs, forms of advertising (internet), home warranty information and more. It should be noted that while the seller representation agreement may state what items will stay with the home after closing that agreement is not binding upon the seller and buyer since it is only an agreement between the seller and the real estate broker. If a buyer wants certain things to stay with the home those items should be specifically mentioned in the Offer to Purchase contract document talked about below.

Buyer Offer To Purchase

The buyer’s offer to purchase represents merely an offer until it is accepted in writing by the seller. Any counter offer by the seller represents a new offer. If the buyer rejects the seller counter offer the seller cannot go back and decide to accept the offer that was first presented unless the buyer agrees to it. While an offer to purchase or counter offer can be made verbally (implied contract) in order for the offer to be legally enforceable in court it must be in writing (explicit contract) in accordance with the Statute of Frauds. Anything not captured in writing will not be enforced in a court of law. Therefore if there is something from the house (movable kitchen island, curtains or other non-fixed window treatments etc.) that you would like to stay with the home it is best to make sure that item is specifically written in to your offer to purchase.

Generally earnest money is not a requirement of an offer to purchase residential real estate. Earnest money is used to show a good faith desire to enter into a purchase agreement but is not required by law. Earnest money is usually credited towards the buyer upon closing. The earnest money will be returned if the seller and the buyer are unable to come to agreement on an offer. If the seller or the buyer call off the offer to purchase due to some disagreement then usually any claim to the earnest money must be released by the seller in writing before the money can be returned to the buyer. If a seller refuses to release their claim to the money then the parties must go to court to have a judge decide who is entitled to the earnest money.

Just because either the buyer or the seller state they want to back out of the deal does not mean they can back out of the deal without both parties agreeing to cancel the Offer to Purchase. If one of the requirements (contingencies) of the offer of the offer is not met then the offer can be cancelled without consequence to either party. Contingencies such as financing, home inspection, selling another home first are some common contingencies found offers to purchase. If the buyer or seller wants to back out of the purchase offer for the simple fact they changed their mind they could be sued by the other side for breach of contract.

Mortgage Document

When money is borrowed to purchase a home the mortgage document represents an explicit contract between the borrower and the lender. The mortgage document will set out the terms of the payments, due dates, late payment penalties, assignment provisions (the ability to sell the loan to another company) and more. While there are many consumer protection laws designed to keep borrowers from signing documents with illegal or unethical use a professional when dealing with real estate contractsprovisions one should still review the document and understand what is being signed since the commitment is a long term one.

Other Explicit Contracts in Real Estate

Home Warranty:

With a home warranty the buyer or the seller can purchase warranty coverage on the major systems of the house like water heater, HVAC, appliances, etc. Usually the warranty coverage is provided for a one year period and can be renewed yearly. The home warranty company will require the warranty agreement be signed by the person paying for the warranty. Always make sure to read the warranty document to know what is and what is not covered under the policy.

Title Insurance Policy:

The title insurance policy covers the lender and the buyer (if the buyer purchases a policy for themselves) in case there are hidden title defects on the property. In order to set out the terms of coverage for the insurance policy everything is put into writing and is signed by those seeking the coverage. For more information on Title Insurance check out the title insurance section at Ivy Pointe Title.

Other Implied Contracts

Implied contracts during the real estate process can include services provided by a company or individual with the promise of payment upon completion of the work. For instance a cleaning company, home inspector, home stager may agree to do work in your home in exchange for payment after completion. Due to the smaller amounts of money involved both parties agree to do the work without any written contract.

A common example of an implied contract is when you contact a cleaning company and ask them to clean your home prior to your putting it on the market for sale. A cleaning company may agree to perform the work with an unwritten implied promise to pay them for the work after they are done. If the home seller refuses to pay the cleaning company after the work has been done the cleaning company can sue the homeowner in small claims court and attempt to recover the money owed.  The court will look at if there is a written contract (whether language via email or text message) or will look towards what the parties actually said and/or did and make a decision on whether a contract does exist.

Final Thoughts

Many real estate contracts can be confusing with all the legalese in them. If you have any questions or are unsure about terms of a particular requirement in a contract you should ask the person presenting you the contract to explain the language to you. If the answer does not resolve your questions or concerns then you need to find outside expert help from a real estate attorney. It is better to walk away from a contract than to sign something that will bind you to terms or requirements you never intended to.

Do you have a real estate contract you have questions about?

Paul Sian is a licensed attorney in the States of Ohio and Michigan.  If you have any questions about a real estate contract you are being asked to sign feel free to contact me at [email protected] or via phone at 513-943-5668.  Feel free to connect with me on Twitter and Facebook.


why you need an LLC

Why Do You Need An LLC?

There may come a time when small business owners are confronted with the question of why do you need an LLC (also known as Limited Liability Company)? Is there something special that an LLC can provide to business owners that would nudge them towards getting an LLC versus operating on their own without any type of business operating form?   The biggest benefit to be had with an LLC is that of protecting ones’ personal assets from a debt or legal liability which may arise out of the business activities.

Like a corporation an LLC is a legal designation for your business. An LLC can be run by a solo business owner, as a partnership amongst different people or can even be owned by other corporations or other LLCs. An LLC provides the limited legal liability similar to what corporations have but offers the flexibility tax wise to be treated as a partnership or as a sole business owner. The federal government and most states don’t treat an LLC as a separate entity for tax purposes as a corporation is normally treated.   (For more information see

The primary benefit for the LLC as mentioned above is shielding your personal assets from legal liability for a possible wrong committed by you or one of your employees while operating the business. Say for instance you run a food based business where you prepare meals for others to purchase. If someone was to get sick after eating your food and blamed you for the illness (whether your food was the cause of the illness does not really prevent someone from suing you if they believe otherwise), they could sue you for any injury suffered as a result of the food poisoning. On the basic and not very expensive side a claim could request something basic as paying for lost work days as well as some compensation for pain and suffering. At the extreme end if a person required extensive hospitalization due to the food poisoning or death was a result, those claims in the lawsuit could be quite large and therefore expensive.

Where a lawsuit resulted in an costly claim against you and you don’t have limited liability company protection, the person suing you could seek recovery by going after your home, your cars, your savings, your kids college funds, retirement accounts and more. Even where some of your assets may be protected by state laws (homestead exemption for your home, retirement plan exemptions) the liability amount you owe does not go away unless you file for bankruptcy. What once started out as a business to help you make extra money has now become a liability that affects the money and assets you personally own. Having an LLC can limit your liability to just those of the business assets in the event of a lawsuit.

Types of Businesses Where You Would Want an LLC

As noted above a food based business in one to definitely consider having an LLC, as it is advantageous to protect your personal assets from any legal issues coming from operating that type of business. There are also plenty of other types of businesses to consider the LLC for and in fact you may want an LLC for just Food businesses need an LLCabout any type of business you run in order to have that added layer of protection. Businesses where you interact with people on a daily basis is a perfect example of where the LLC protection can come in handy.

One example of a business with regular interactions with people include cosmetic type businesses where you are applying makeup, creams, hair treatments and more on your paying customer. If someone were to have an allergic reaction to a hair dye that causes them to lose hair or suffer some sort of rash a lawsuit could be an end result. You can have all the signed disclaimers/waivers in the world to try and protect you, but if it is shown you are in some way negligent those disclaimers will not protect you.

Another business example where LLC protection is great to have is where you are driving people around or delivering products for pay.   In this case if someone were to get injured while you are driving them around or delivering something (i.e driving for Uber, Lyft or some other ride sharing company) you may be on the hook personally for any injuries suffered. While some of the ride sharing companies have insurance to cover your passengers (and maybe even cover you) they also are hoping your primary insurance covers any damage or injuries first and they will come in second to cover any claims.  A problem that could arise is your own insurance company denies coverage to you and any fare paying passengers since you did not disclose to the insurance company that you are transporting passengers in your car for pay.

Insurance and ride sharing is a complex topic that I will cover more in depth in a future article, but for purposes of this LLC article just know that if you don’t tell your insurance company that you are transporting people for pay they could deny any claims for injuries or damage resulting from your “business”. If your insurance company won’t pay, and the ride sharing company pays for only part of the claim or decides not to pay anything at all, your personal assets are at greater risk than if you had LLC protection.

How The LLC is Run is Also Important 

Properly managing and operating the LLC is also critical. If the only thing you do is fill out the LLC paperwork, send it in to your local state business authority and nothing else, you will have little to no protection for personal assets in a lawsuit. With an LLC you must keep your personal and business assets separate. That means separate bank accounts, keeping separate your business expenses from your personal expenses, separate financial records and more. If you fail to keep the LLC separate from your personal assets a judge can find that you are not operating a true LLC business thus opening up your personal assets to be used to cover any damages you may pay to settle a lawsuit.

Having insurance for you and your business is also always advisable. When talking to your insurance company you should ask them about their umbrella policy option. Make sure you inform the insurance company about what your business does and the fact that you have an LLC that needs to be covered under the umbrella. Umbrella insurance policies are good to have since like an umbrella they provide good insurance coverage for you personally and for your business activities for many different types of claims that don’t necessarily fall under your homeowners or auto insurance policies.

For tax purposes, depending on the type of LLC you have setup and how you want to run your business there may be little to moderate change come tax filing season. Ultimately the profits you earn from running your business get reported on your tax returns. Doing the tax portion correctly and using all the correct forms is one piece of evidence that shows your LLC is indeed a true business. As with anything tax related it is always best to consult with a Certified Public Account or other tax professional who specializes in helping small businesses.

Final Thoughts on LLC

An LLC is a valuable means of protecting your personal assets from potential legal liabilities of your business. While you may do everything perfectly with Protect your assets with an LLCregards to your business, that does not mean someone won’t come along and sue you. Having an LLC set up to run your business with helps ensures that you have extra protection and limits the risk that your personal assets could be used to pay for damages arising out of a lawsuit. To determine if an LLC is best for you talk to a local business planning attorney or corporate attorney in your area.

Do you need an LLC or have more questions about forming an LLC?

Paul Sian is a licensed attorney in the States of Ohio and Michigan.  If you have any questions on forming an LLC, have questions about running your business, or have some business related legal questions feel free to contact me at [email protected] or via phone at 513-943-5668.