Specialized lawyers make a difference

It's sad when a large home builder such as Neumann Homes files for bankruptcy.

Sad for the real estate market, and sadder still, of course, for those buyers who signed a contract to buy a home that now may not be built.

What about their deposits? As noted by the bankruptcy attorney quoted in Anna Marie Kukec's recent article ("Experts advise recent buyers"), such consumers are "in a really poor position right now."

Buyers may have put down a lot of money, but generally, if the deposit has not been put in a segregated account, he is just a creditor waiting in line like any other creditor of the builder.

With so few options available with builder bankruptcies, it's all the more important to consider these issues earlier.

Amazingly, many buyers still proceed without a lawyer. Rather than just signing the builder's "standard" contract blindly, it is critical in light of recent events to retain a qualified real estate attorney before the contract is signed.

An experienced real estate attorney can review the "standard" contract, point out pitfalls, and suggest modifications.

For example, the buyer can request proof of the builder's financial stability before signing on the dotted line, or can request a "drop dead" date after which deposits are returned if there's no closing.

Moreover, an experienced real estate attorney can provide peace of mind for the would-be but worried buyer.

The real estate market will not be helped by a wholesale withdrawal of buyers with "cold feet" over recent developments such as the sub-prime mortgage lending meltdown, the credit crunch and builder bankruptcies.

With competent legal assistance, most problems in real estate transactions can be headed off, helping buyers get what they really want -- a new home without any headaches.

Ralph J. Schumann Elk Grove Village

President, Illinois Real Estate Lawyers Association