When people buy a home or a commercial building on the open market, there is an expectation that most of the legal work will be done by someone else.
The purchase agreement may be a standard form provided by the realtor, and the bank will usually handle the loan documents.
However, for a number of reasons, an open market transaction does not always make sense either for Delaware families or for those in this state who are looking for commercial real estate.
Sometimes, for example, a house is available from a family or friend at a favorable price. Likewise, businesses may be able to purchase commercial real estate directly from another organization.
On a related note, when it comes to lending, someone who is buying real estate may decide to go through a family member or another private lender who just would not have the same streamlined process as a bank or other business which loans money as its trade.
Transactions that are off the open market can be complicated
Many times, a transaction that is not at arm’s length or that is otherwise off the open market can be a great opportunity for all involved.
However, one trap Delaware residents may fall into is thinking that these types of real estate transactions are straightforward and can be done with minimal legal knowledge and skill.
The reality is that a buyer or seller will still need to make sure that the buy-sell agreement and other documents protect their interests and are clear enough to prevent conflict down the road.
One might not think of it at the time, but litigation can and does happen between buyers and sellers who were in a close relationship with each other. These sorts of transactions can also raise important tax and other legal considerations which will have to be addressed.
Likewise, if a mortgage is going to be through a private party, that document also will need legal review.
While real estate transactions between relatives, friends and business associates can turn out to everyone’s advantage, it is important to make sure they get done correctly.