What is a crucial step regarding funds when acting for a buyer of a new property?

Holding funds until the builder's lien period expires is a crucial step when acting for a buyer of a new property because it serves to protect the buyer's interests after the purchase. In real estate transactions, particularly for newly constructed properties, there is a risk that subcontractors or suppliers may file liens against the property due to unpaid services or materials that they provided. By retaining the funds until the builder's lien period is over, the buyer ensures that they are not financially liable for any potential claims that might arise after the sale. This strategy helps to safeguard the buyer against unforeseen expenses that could result from disputes involving the property.

Transferring the entire purchase price upfront would eliminate this protective measure and expose the buyer to risks related to builder liens. Similarly, securing a holdback until the closing date does not account for the potential for liens that might arise after the transaction is completed. Disbursing funds to the seller immediately would also forfeit the buyer's protection against such liens. Therefore, holding the funds until the expiration of the builder’s lien period is a prudent approach in real estate transactions to ensure that the buyer's investment remains secure.