Do You Need A Real Estate Attorney To Buy Or Sell A House?
Whether you are in the market to buy or sell a home, it is inevitable that you will be asked for the name of the real estate attorney representing you in the transaction. If you had not thought about hiring someone to represent you or considered foregoing hiring legal counsel, this article may be of help.
Some states have laws that require buyers, sellers or both to retain the services of lawyers to handle all or at least part of the transaction. Other states leave it up to the parties to decide whether they think you need legal advice and representation. To help you decide what to do, here is a brief look at the role of an attorney in a real estate transaction and some of the reasons why you may need one.
Role of the real estate attorney
Lawyers who represent buyers and sellers in real estate transactions have experience in several areas of the law, including:
- Real estate.
- Mortgages and secured transactions.
The lawyers representing each of the parties in a real estate transaction ensure that all legally required procedures for the transfer of clear title to a specific parcel of property are followed.
At the closing, which is when the parties exchange money for the deed transferring title to a new owner, real estate attorneys for the lender and the parties oversee the exchange. It is the job of the attorneys for the lender and the parties to ensure that the buyer gets clear, unencumbered title to the property, the seller receives the correct amount of money, and the lender has a legally enforceable lien on the property for the money it lent to the buyer to purchase the home.
What does a real estate attorney do for a buyer?
When you find the home of your dreams, the role of a real estate attorney is to ensure that your dream does not become a nightmare. Some of the ways your lawyer accomplishes this include:
- Review and negotiate the purchase contract: Your lawyer ensures that the purchase agreement accurately reflects the terms of the sale, including price, mortgage contingency, pest inspection, and other provisions to protect your interests.
- Order and review title report: A title search ordered by your lawyer reveals whether there are judgments, liens or defects in title that must be cleared by the seller prior to closing. At the closing, your lawyer arranges for the title company to issue a title insurance policy to protect you.
- Review mortgage documents: The lender providing funding takes back a lien on the property in the form of a mortgage. Before allowing you to sign the promissory note, mortgage and other bank documents, your real estate attorney reviews them to ensure they accurately reflect the terms of your loan.
- Oversee the closing: A real estate closing is a flurry of activity with documents and money being exchanged. It is your lawyer who reviews the closing documents, calculates what is owed to the seller and generally oversees the closing to make certain that your rights are protected.
An experienced real estate attorney relieves you of the burden of handling issues that frequently arise when buying a home. For example, if a home inspection reveals a problem with the air conditioning system in the home, your attorney negotiates to get it repaired by the sellers prior to closing.
Reasons why sellers need a real estate attorney
Some states allow the real estate agent handling the sale of your home to prepare a sales agreement containing the terms and conditions of the transaction. Even if that is the law in your state, here are some of the benefits of hiring a real estate attorney:
- A real estate lawyer drafts and reviews legal documents essential to the sale of your home, including the sales agreement, deed, and transfer documents required by the state to record the deed.
- When issues arise, a lawyer relieves you of the burden of resolving them. This may include negotiating repair items revealed in a home inspection report performed on behalf of a buyer or matters that arise regarding the sale.
- The key to a successful sale is the ability of a seller to deliver a clear title to the buyer. Your real estate attorney reviews the title search and works to clear open mortgages, liens, and other impediments to a clear title.
- At the closing, your lawyer ensures that all mortgages, fees and taxes that you owe as the seller are paid and that you receive the correct amount from the remaining proceeds of the sale.
When you have an attorney handling the sale of your home, it gives you peace of mind knowing that someone you trust is looking out for your interests.
Do you need a real estate attorney?
If you live in a state that does not require the use of a real estate attorney to buy or sell a home, a report from the federal government may offer the best reason to hire one. The government report shows the median price of a new home to be $400,600. When you have that much at stake, you need someone experienced in real estate law looking out for your interest.