Prevention Not Panic – Discovering Potential Legal Issues Before It’s Too Late
Most real estate transactions appear straightforward in the beginning. The property is listed. A buyer is found. Escrow opens. Everyone expects a smooth closing. Then, sometimes without warning, the transaction stalls because of a legal issue nobody identified early enough.
One of the most common — and costly — problems involves ownership and authority issues that are discovered late in the transaction process. By the time the issue surfaces, buyers are frustrated, sellers are stressed, closing dates are missed, and the entire deal may be at risk.
The Problem Often Starts Long Before the Listing
Many ownership problems are not visible from the outside. A seller may genuinely believe they have full authority to sell a property when the property is actually held in a trust, a deceased owner remains on title, probate is required, multiple heirs have ownership interests, a divorce was never finalized properly, an outdated deed created title defects, a power of attorney is invalid or insufficient or guardianship court approval is required. These issues frequently remain undiscovered until escrow, title review, or underwriting. At that point, solving the problem can take weeks or even months.
Why This Creates Serious Problems for Agents
Real estate agents are often the first professionals involved in the transaction. While agents are not expected to provide legal advice, clients frequently look to them for guidance and reassurance. The challenge is that ownership and authority problems can appear deceptively simple at first. For example, a child says they can sell their deceased parent’s home, a successor trustee believes they automatically have authority, a seller insists probate is unnecessary or family members verbally agree about the sale. Unfortunately, verbal assurances and assumptions do not replace legal authority. When these problems are discovered late, agents may face delayed closings, potential disclosure disputes and frustrated clients blaming the transaction team.
Probate and Trust Issues Are Especially Common
One of the biggest areas of confusion involves inherited property. Many clients assume that if there is a will or trust, the property can immediately be listed and sold. That is not always true. Important questions may include: was the property actually transferred into the trust? Is probate required? Who has authority to sign? Are all beneficiaries cooperative? Are court approvals necessary? Has an affidavit or court order been recorded? These issues are often discovered only after a purchase agreement has already been signed.
Early Investigation Can Prevent Major Delays
Agents can protect themselves and help transactions proceed more smoothly by identifying potential red flags early. Some warning signs include: a recent death, unclear ownership explanations, references to trusts or powers of attorney, sellers who are unsure whose name is on title and statements such as “we’ll figure that out later”. When these issues arise, early involvement by a real estate attorney or probate attorney can save significant time and expense.
The Goal Is Prevention, Not Panic
Most legal problems in real estate are manageable if identified early enough. The real danger comes when everyone assumes there is no issue until the transaction is already approaching closing. Agents who recognize potential legal complications early can reduce transaction delays, preserve deals reduce stress for everyone involved. Most importantly, you can minimize liability exposure.
Final Thoughts
Many of the most serious transaction problems are not caused by bad intentions or misconduct. They result from legal issues that were simply not identified soon enough. The earlier ownership and authority issues are addressed, the more options everyone usually has. Sometimes the most valuable thing an agent can do is recognize when legal guidance may be needed before a manageable problem becomes a closing crisis.
Lee A. Drizin, Esq. is the founder of Drizin Law and has practiced in Las Vegas for over three decades. His work focuses on probate, estate planning, trusts, and guardianship, with particular experience handling contested probate and administration matters. A UNLV graduate with a Master of Laws in Taxation from Boston University, Lee has built his career helping Nevada families navigate some of the most difficult times in their lives.
