Frequently Asked Questions
Alan R. Goodman & Associates Wellesley Office Park 60 William Street, Suite 300 Wellesley, MA 02481 Tel: (781) 431-9966 Fax: (781) 431-9977 www.goodmanlegal.com |
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Q. I am buying or selling real estate. Why do I need an attorney to represent
me?
A: For either commercial or residential real estate, sellers need an attorney in order to properly sort out
all of the complexities and conditions which are (or should have been) included in the Offer to Purchase, to
negotiate reasonable terms to the Purchase and Sale Agreement, to prepare for closing, to review any
documents the buyer or buyer's lender may request the seller to sign at closing, and to ensure the receipt
of the sale proceeds in a timely manner. Issues often arise that need to be addressed by or at the closing,
and an attorney will help you to look for a solution that will best protect your interests. In recent years we
have frequently obtained missing or confirmatory discharges of mortgage prior to closing for sellers who
have refinanced, thus allowing the closing to take place without a holdback or postponement.
The need for an attorney is greater still if you are a potential buyer of real estate. Buying real estate is
frequently one of the largest investments you will make. As a general rule, the real estate you are
purchasing is sold without any warranties, and the representations contained in the Purchase and Sale
Agreement generally lapse once you have accepted the seller's deed. You therefore need someone to
review the entire purchase process who will protect your interests. For example, you cannot assume that
the person who identifies him or herself as the seller is actually the person who owns the property or is
authorized to sell, or that the seller has good and marketable title.
Q. I am getting ready to sell my home. What do I need to think about as I get
ready to sell?
A: There are a few general matters which you should keep in mind when selling your home. Of course,
every transaction and property is different, and the following is only a partial list of considerations.
* If you are selling real estate without the assistance of a real estate agent, you are still responsible for
making certain disclosures required by law. Contact us before accepting an offer with regard to your
compliance with disclosures and for our preparation of an offer form which meets the requirements of your
transaction and protects your interests.
* The property that you are selling is the real estate plus any "fixtures," a legal term used to describe
anything which is permanently attached to the real estate. For example, your curio cabinet which is not
attached or bolted into the wall will not be considered to be part of the real estate being sold. On the other
hand, a built-in hutch, a dining room chandelier and any sconces are presumed to be sold with the real
estate. If you want to take any fixtures with you, you must specify them as exclusions in the legal
documentation. The rules differ with regard to commercial property.
* When calculating your expected net proceeds from the sale, don't forget your tax stamps. Tax stamps
are a Massachusetts tax required on the sale of real estate. This tax is paid at the Registry of Deeds, and a
deed cannot be recorded (and therefore the sale cannot be completed) until the Registry has confirmed
that the tax stamps due have been paid. Tax stamps are currently $2.28 for each $500.00 of the sale price.
Please note that the tax stamps due on Barnstable County conveyances is different.
Q. I am getting ready to buy a new home. What do I need to think about as I get
ready to buy?
A: Again, every property and transaction is different, and the following is only a partial list of
considerations. Assuming that you have liquid funds for your offer to purchase and purchase and sale
agreement deposits, and that you have mortgage financing or other funds available in time for the closing,
you should perform certain investigations known as "due diligence" regarding the property (e.g., home
inspection, inquiries with police department, inquiries with building department). The following are a few
items that you should consider:
* Although title insurance for the benefit of the owner (i.e., an Owner's Title Policy) is not required for
you to purchase real estate, we do recommend it. Title insurance is insurance on the title to the property
which you are purchasing, for which a one-time premium is paid at closing. Until you sell the property, the
insurance will protect you against deficiencies in the validity of the chain of title to the property, and more.
There are two different types of title insurance policies, "basic" and "enhanced." We can provide you with
materials comparing coverage between the types of title policies. We will advise you on what kind of policy
would most benefit you based on the type pf property that you are purchasing and title exam report. Even
the most careful title exam will not uncover every possible title problem, such as claims of lost heirs or
adverse possession claims.
* A declaration of homestead is a simple, inexpensive form of asset protection. Under certain
circumstances, it prevents creditors from forcing the sale of your home to satisfy a judgment against you.
Effective October 26, 2004, the Massachusetts legislature has increased the amount of protection of the
equity in your home from $300,000 to $500,000. Even better, the "stackable" elderly homestead has also
increased from $300,000 to $500,000. A homestead declaration will only protect your primary residence.
Prior to closing, contact us to discuss the details of your transaction and how recording a Declaration of
Homestead might benefit you.
* If you are purchasing real estate with another person who is not your spouse, you should have a
co-ownership agreement in place, preferably before or at the closing.
Q. I am thinking of starting a business. Should I incorporate or form a Limited
Liability Company ? What should I do to be protected?
A. Our recommendation will depend on your industry, the business activity you will be conducting and
your business plan, among many factors. Creating a separate legal entity is a necessary prerequisite to
obtaining a license to do business in some industries. Many times a license will be needed to perform a
certain line of work, which we can help you apply for. There are different business entities with different tax
and legal characteristics, including corporations, Limited Liability Companies (LLCs), Limited Liability
Partnerships (LLPs) and different types of trusts. We will help to decide which form of entity offers the most
advantages to your business. If you choose not to create a legal entity, you will need to file a Business
Certificate with the local Clerk.
If you go into business with other people, prior to beginning your business activities you should enter into
an agreement with the other people to clarify the contributions made, future contribution expectations, how
to share decision-making powers and rights to profits. Similarly, if you lend money or act as an investor to
start a business, the particulars of the loan should be documented.
Before you sign any agreement -- whether it's a lease, asset purchase agreement, partnership agreement,
promissory note, shareholder agreement or other -- have it reviewed by a lawyer! Also, talk to a certified
public accountant about the tax consequences of your business dealings. Don't forget that the legal fees
paid up front are usually well worth the higher legal fees and aggravation of getting out of a sticky
agreement.
Q. I either don't have a will or have not had my will revised for several years.
Do I need to take any action?
A. Not necessarily, however, the answer is very likely to be yes. Did you know that if you are married
without children and you should die a Massachusetts resident without a will, only a fixed, statutory dollar
amount will go to your spouse upon your death and all the rest of your estate will go to your parents
(assuming they are still alive)? It serves you well to inform yourself by talking with an attorney about estate
planning. The bequests in your will should reflect your increase or decrease in assets and your changing
concerns over the years, such as the changing needs of your spouse, your children and your parents. For
example, once your parents have engaged in complex estate planning, you will need to make sure that your
own will does not interfere with their estate tax planning. In addition, when you get married or divorced, or
when one of the parties named in your will dies, marries or gets divorced, you should consider whether a
revision of your will is appropriate. For example, a will that was made before your marriage becomes
invalid by operation of law upon your marriage, unless a very limited exception applies. A very frequent
motivating factor in doing or updating a will is also the birth of a child: in your will you can state who you
want appointed as a guardian and raise your child, should you be the second parent to die.
me?
A: For either commercial or residential real estate, sellers need an attorney in order to properly sort out
all of the complexities and conditions which are (or should have been) included in the Offer to Purchase, to
negotiate reasonable terms to the Purchase and Sale Agreement, to prepare for closing, to review any
documents the buyer or buyer's lender may request the seller to sign at closing, and to ensure the receipt
of the sale proceeds in a timely manner. Issues often arise that need to be addressed by or at the closing,
and an attorney will help you to look for a solution that will best protect your interests. In recent years we
have frequently obtained missing or confirmatory discharges of mortgage prior to closing for sellers who
have refinanced, thus allowing the closing to take place without a holdback or postponement.
The need for an attorney is greater still if you are a potential buyer of real estate. Buying real estate is
frequently one of the largest investments you will make. As a general rule, the real estate you are
purchasing is sold without any warranties, and the representations contained in the Purchase and Sale
Agreement generally lapse once you have accepted the seller's deed. You therefore need someone to
review the entire purchase process who will protect your interests. For example, you cannot assume that
the person who identifies him or herself as the seller is actually the person who owns the property or is
authorized to sell, or that the seller has good and marketable title.
Q. I am getting ready to sell my home. What do I need to think about as I get
ready to sell?
A: There are a few general matters which you should keep in mind when selling your home. Of course,
every transaction and property is different, and the following is only a partial list of considerations.
* If you are selling real estate without the assistance of a real estate agent, you are still responsible for
making certain disclosures required by law. Contact us before accepting an offer with regard to your
compliance with disclosures and for our preparation of an offer form which meets the requirements of your
transaction and protects your interests.
* The property that you are selling is the real estate plus any "fixtures," a legal term used to describe
anything which is permanently attached to the real estate. For example, your curio cabinet which is not
attached or bolted into the wall will not be considered to be part of the real estate being sold. On the other
hand, a built-in hutch, a dining room chandelier and any sconces are presumed to be sold with the real
estate. If you want to take any fixtures with you, you must specify them as exclusions in the legal
documentation. The rules differ with regard to commercial property.
* When calculating your expected net proceeds from the sale, don't forget your tax stamps. Tax stamps
are a Massachusetts tax required on the sale of real estate. This tax is paid at the Registry of Deeds, and a
deed cannot be recorded (and therefore the sale cannot be completed) until the Registry has confirmed
that the tax stamps due have been paid. Tax stamps are currently $2.28 for each $500.00 of the sale price.
Please note that the tax stamps due on Barnstable County conveyances is different.
Q. I am getting ready to buy a new home. What do I need to think about as I get
ready to buy?
A: Again, every property and transaction is different, and the following is only a partial list of
considerations. Assuming that you have liquid funds for your offer to purchase and purchase and sale
agreement deposits, and that you have mortgage financing or other funds available in time for the closing,
you should perform certain investigations known as "due diligence" regarding the property (e.g., home
inspection, inquiries with police department, inquiries with building department). The following are a few
items that you should consider:
* Although title insurance for the benefit of the owner (i.e., an Owner's Title Policy) is not required for
you to purchase real estate, we do recommend it. Title insurance is insurance on the title to the property
which you are purchasing, for which a one-time premium is paid at closing. Until you sell the property, the
insurance will protect you against deficiencies in the validity of the chain of title to the property, and more.
There are two different types of title insurance policies, "basic" and "enhanced." We can provide you with
materials comparing coverage between the types of title policies. We will advise you on what kind of policy
would most benefit you based on the type pf property that you are purchasing and title exam report. Even
the most careful title exam will not uncover every possible title problem, such as claims of lost heirs or
adverse possession claims.
* A declaration of homestead is a simple, inexpensive form of asset protection. Under certain
circumstances, it prevents creditors from forcing the sale of your home to satisfy a judgment against you.
Effective October 26, 2004, the Massachusetts legislature has increased the amount of protection of the
equity in your home from $300,000 to $500,000. Even better, the "stackable" elderly homestead has also
increased from $300,000 to $500,000. A homestead declaration will only protect your primary residence.
Prior to closing, contact us to discuss the details of your transaction and how recording a Declaration of
Homestead might benefit you.
* If you are purchasing real estate with another person who is not your spouse, you should have a
co-ownership agreement in place, preferably before or at the closing.
Q. I am thinking of starting a business. Should I incorporate or form a Limited
Liability Company ? What should I do to be protected?
A. Our recommendation will depend on your industry, the business activity you will be conducting and
your business plan, among many factors. Creating a separate legal entity is a necessary prerequisite to
obtaining a license to do business in some industries. Many times a license will be needed to perform a
certain line of work, which we can help you apply for. There are different business entities with different tax
and legal characteristics, including corporations, Limited Liability Companies (LLCs), Limited Liability
Partnerships (LLPs) and different types of trusts. We will help to decide which form of entity offers the most
advantages to your business. If you choose not to create a legal entity, you will need to file a Business
Certificate with the local Clerk.
If you go into business with other people, prior to beginning your business activities you should enter into
an agreement with the other people to clarify the contributions made, future contribution expectations, how
to share decision-making powers and rights to profits. Similarly, if you lend money or act as an investor to
start a business, the particulars of the loan should be documented.
Before you sign any agreement -- whether it's a lease, asset purchase agreement, partnership agreement,
promissory note, shareholder agreement or other -- have it reviewed by a lawyer! Also, talk to a certified
public accountant about the tax consequences of your business dealings. Don't forget that the legal fees
paid up front are usually well worth the higher legal fees and aggravation of getting out of a sticky
agreement.
Q. I either don't have a will or have not had my will revised for several years.
Do I need to take any action?
A. Not necessarily, however, the answer is very likely to be yes. Did you know that if you are married
without children and you should die a Massachusetts resident without a will, only a fixed, statutory dollar
amount will go to your spouse upon your death and all the rest of your estate will go to your parents
(assuming they are still alive)? It serves you well to inform yourself by talking with an attorney about estate
planning. The bequests in your will should reflect your increase or decrease in assets and your changing
concerns over the years, such as the changing needs of your spouse, your children and your parents. For
example, once your parents have engaged in complex estate planning, you will need to make sure that your
own will does not interfere with their estate tax planning. In addition, when you get married or divorced, or
when one of the parties named in your will dies, marries or gets divorced, you should consider whether a
revision of your will is appropriate. For example, a will that was made before your marriage becomes
invalid by operation of law upon your marriage, unless a very limited exception applies. A very frequent
motivating factor in doing or updating a will is also the birth of a child: in your will you can state who you
want appointed as a guardian and raise your child, should you be the second parent to die.
The fine print: Alan R. Goodman & Associates provides information on its website for informational purposes only, and such information does not
constitute legal advice. The website does not create an attorney-client relationship between Alan R. Goodman & Associates and anyone viewing
this site. You should not rely on the information obtained from this website without first seeking the advice of any attorney regarding you
application of any law to your specific situation. While we strive to keep the information on our website accurate and current, we do not promise or
warrant that the information is complete, accurate or up to date. Any information obtained by means of this website is NOT a substitute for legal
representation.
constitute legal advice. The website does not create an attorney-client relationship between Alan R. Goodman & Associates and anyone viewing
this site. You should not rely on the information obtained from this website without first seeking the advice of any attorney regarding you
application of any law to your specific situation. While we strive to keep the information on our website accurate and current, we do not promise or
warrant that the information is complete, accurate or up to date. Any information obtained by means of this website is NOT a substitute for legal
representation.
