With the many opportunities to purchase real estate, whether for personal or business use. Hiring a Palm City real estate closings lawyer can help ensure a smooth and legally binding closing process.
At Apfelbaum Law, our experienced Florida real estate attorneys help both clients who want to purchase a home and businesses that wish to buy or sell commercial real estate. We also assist landlords with a variety of issues, including disputes with tenants, collection difficulties, and, in some cases, the unfortunate necessity of eviction.
Many people have questions about escrow, and some tell us they’ve heard of it but do not really know how it works. An escrow account is part of almost all residential real estate transactions in Florida. The account serves as a bridge between the buyer and seller.
The buyer places a deposit in the escrow account as “earnest money,” so the seller feels comfortable taking the property off the market. Typically, the amount of money is around ten percent of the seller’s asking price, although this may vary. This sum of money is defined in the purchase agreement.
Understanding Escrow
The escrow account is managed by an escrow agent, often a real estate agent or broker. This person’s responsibility is to make sure the seller’s money makes it into the escrow account and stays there until closing. In addition to the deposit, other sums may be placed in the escrow account as well. These include additional deposits from the buyer, closing costs to be paid by the buyer, and closing costs to be paid by the seller.
The purpose of the escrow account is to ensure the buyer cannot change their mind, leaving the seller in a lurch. In most cases, the buyer cannot get their money back once they have placed it in escrow. However, in some situations where things have gone wrong, the money will be returned to the buyer.
This may occur when an inspection during the closing process finds some previously unknown problem, if the purchase contract has a contingency clause allowing the buyer to walk away in this situation. For example, if an inspection shows your dream house is hopelessly riddled by termites, or will likely be underwater in ten years, you will be able to get your money back from the escrow account, providing your purchase contract has the appropriate contingency clause.
For this reason, it’s important to discuss this type of clause with your Florida real estate attorney when reviewing your purchase contract.
The buyer’s money may also be returned if the appraisal comes back lower than the purchase price the buyer and seller have agreed on. Again, you will need to make sure your purchase contract contains a clause allowing for return of your money in this situation, if you do not want to renegotiate the price.
Contact a Real Estate Closings Attorney
Florida real estate agents are required to check on escrow accounts every month during the closing process to ensure everything is in order. However, sometimes Florida real estate attorneys do receive calls from people who feel their broker has not handled the account properly. If there is a discrepancy with the money in an escrow account at closing, your lawyer can advise you on your options.
If you have questions or concerns about real estate transactions, title closings, or other Florida legal services, please contact Apfelbaum Law for a consultation. We can be reached at 772-236-4009, or contactus@alawfl.com.
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