The U.S. Securities and Exchange Commission (SEC) recently accused Larry Polhill of California of operating a real estate investment scam that defrauded 500 investors. The SEC says that Polhill used his California corporation, Pacific Financial Corp., to buy and sell property and distressed assets and to offer the opportunity to invest through the unregistered notes. According to the SEC, Polhill deceitfully presented non-existent investment opportunities as safe and reliable.
The story demonstrates the profound need for hiring an experienced real estate attorney before entering into any real estate transaction, particularly before signing a purchase and sales agreement.
Elements to watch in a purchase and sale agreement
Real estate purchase agreements are enforceable contracts that define the terms and conditions for the purchase and sale of real estate. The following terms and conditions need to be carefully reviewed by a competent San Jose real estate lawyer.
- Sales price: The most important point of the contract
- Escrow period: Usually, the escrow time runs 30 to 45 days
- Financing terms: Details the amount of the down payment, the loan amount and the interest rate
- Loan application: Purchasers normally have seven days to file a loan application
- Financing contingency: The purchase agreement usually provides that buyer who is unable to obtain a loan can have the deposit refunded
- Appraisal contingency: Most offers are subject to the appraisal supporting the purchase price
- Termite report: Most California lenders demand a certificate from a licensed pest control inspector stating that the home is clean from termites and other pests
- Other inspections: Lenders also want to review septic tanks, wells, roof reports and smoke detector certifications
- Home inspections: A full home inspection of the home's heating, cooling, plumbing and electrical systems needs to be completed
Why hire a lawyer?
Although there are many standard real estate purchase and sales agreements available, you need to elicit legal assistance. A California real estate attorney can review the purchase contract before you sign it to protect your interests in every aspect real estate purchase process. Your lawyer will also coordinate with your loan officer and the attorney for the home seller to protect your interests at every step of the process. They should also examine important documents such as the bills of sale, deed, plat of survey, title and legal descriptions ― all essential parts of the home purchase process.
Before signing a purchase agreement on the new house you want to buy, call our office to speak with an experienced San Jose real estate attorney.