Closing Day: Common Legal Issues That Can Derail Real Estate Transactions

Closing Day: Common Legal Issues That Can Derail Real Estate Transactions

Closing day is the final step in a real estate transaction where property ownership is transferred from the seller to the buyer. It is a crucial day in the home-buying process as it finalizes the deal and allows the new owner to take possession of the property. However, sometimes situations arise during the closing process that can derail the transaction.

To avoid these common closing day pitfalls, you must work with an experienced Houston real estate litigation lawyer from the start. Your attorney will work tirelessly and plan ahead to prevent common real estate issues from wrecking your closing day.

Failure to disclose

Texas law requires sellers to provide potential buyers of homes with accurate and complete information about the condition of the property they are purchasing. Failure to disclose such defects can lead to serious legal consequences.

Examples of defects that must be disclosed include, but are not limited to:

  • Structural issues, such as a leaky roof, a cracked foundation, or faulty electrical wiring
  • Environmental hazards, such as mold or lead-based paint
  • Known boundary disputes or zoning violations
  • Prior history of water damage or flooding
  • Any repairs made to the property

What happens if the seller doesn’t disclose known defects? If the seller intentionally tries to conceal a defect or misrepresents the property’s condition, they can be held liable for fraud. If the buyer later discovers an undisclosed defect, they may sue the seller for damages.

Title issues

A property title is essentially ownership rights to a property that establishes who can use and occupy the property. When a buyer purchases a property, they want to be certain that they are acquiring clear title to the property with no legal claims against it.

Unfortunately, several common title issues can arise during a real estate transaction, such as liens, judgments, and encumbrances.

To protect against these potential issues, buyers can purchase title insurance. Title insurance covers any potential title issues that may arise during the transaction. It protects the buyer against any financial loss resulting from undiscovered title defects.

Contract issues

The purchase contract is a legally binding agreement between the buyer and seller. The contract outlines the terms and conditions of the real estate transaction and establishes the rights and responsibilities of both parties.

Unfortunately, disputes over the purchase price, closing dates, or property condition can occur during a home or commercial property sale. Contract disputes can also arise due to miscommunications, misunderstandings, or fraud.

A contract breach can be costly and time-consuming for all parties involved. It can result in a lawsuit and the cancellation of the sale. For these reasons, you must work with a Houston real estate attorney from the beginning to ensure that the purchase contract is drafted correctly and that all contingencies are included. The best way to avoid contract issues is to start with a well-drafted contract.

Closing costs

When a real estate sale is finalized, fees and expenses are bundled into “closing costs.” These costs vary depending on the transaction’s location, size, and complexity; however, they often include title insurance, appraisal, attorney, and loan origination fees.

While closing costs may seem cut and dry, during the closing, there may be unexpected fees or charges that were not disclosed upfront. Additionally, the buyer and seller may disagree over who pays certain closing costs. This can result in a delay or cancellation of the transaction completely.

Disputes over closing costs can be costly and time-consuming. As such, working with a real estate attorney who can review the closing documents and ensure that all fees and charges are accurately disclosed is important.

Real estate agent negligence

Real estate agents have a fiduciary duty to act in the best interest of their clients. They must fully disclose details about the property, and any potential conflicts of interest before the real estate transaction occurs. This ensures the buyer is protected from unscrupulous agents looking to sell a defective home or property quickly.

However, sometimes real estate agents do not act in their client’s best interests. If an agent breaches their duty, the client may have legal grounds to sue for damages. Additionally, the agent may face disciplinary action from their state’s real estate licensing board, which could revoke their license.

Contact Our Houston Real Estate Litigation Lawyers Today!

Given the potential legal issues that can arise during a real estate transaction, working with a real estate litigation lawyer is essential. At Pathway Property Lawyers, our Houston-based real estate attorneys can provide valuable guidance and support throughout the transaction process, helping buyers and sellers to navigate complex legal issues and avoid costly mistakes.

Working with a real estate litigation attorney can help to mitigate potential risks and ensure that buyers and sellers are fully informed and protected throughout the transaction process.

To learn more about your legal options, please call us at (832) 364-6234 or complete our confidential contact form. Our team safeguards your rights and property and guides you through the legal complexities.



Pathways Property Lawyers

At Pathways Property Lawyers, our Houston attorneys are here to answer all your legal questions and help you protect your rights regarding personal, business, commercial or investment properties. Call us or fill out our confidential contact form to learn more about your legal options.

Our law firm has considerable experience in Texas real estate law. We advise our clients on issues related to real estate transactions and litigation throughout Southeast Texas. In addition to real estate, our Houston lawyers have experience in other related areas of law, such as family law, business law, estate planning and probate. This allows us to assist clients with all related legal issues, and to take an holistic approach to your specific matter.


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