Do I need a Real Estate Attorney?
Purchasing a home is the largest investment that most people will ever make. Both real estate sales and purchases involve significant legal rights and obligations for both parties. In spite of this, many people are reluctant to hire a Real Estate Attorney for their transaction or feel that they do not need to do so. There are some common questions and misconceptions that Purchasers and Sellers may have regarding Real Estate Attorneys.
What will a Real Estate Attorney do for me?
There is a popular misconception that the services of a Real Estate Attorney are limited to “doing a closing”. In fact, the role of the Real Estate Attorney begins at or before the time the contract is signed. For example, some of the tasks that your Real Estate Attorney will perform in a real estate purchase transaction are as follows:
• Reviewing the contract;
• Proposing modifications to the contract, and/or responding to modifications proposed by Seller’s attorney;
• Submitting a request for repairs that may be suggested by your home inspector;
• Making sure that you are in compliance under the terms of a financing contingency or home sale contingency provision;
• Reviewing documents that Seller must deliver to you prior to closing, such as the title commitment, survey, and pest inspection;
• Working with you and Seller’s attorney to schedule your closing;
• Obtaining and verifying the correctness of settlement figures and communicating them to you prior to closing; and
Representing you at closing, which includes reviewing and explaining to you all of your loan documents and documents required by the title company, as well as documents that the Seller must provide to you to ensure that you are receiving title to the property as required under your contract.
Some of the tasks that your Real Estate Attorney will perform in a real estate sale transaction are as follows:
Reviewing the contract;
• Proposing modifications to the contract, and/or responding to modifications proposed by Purchaser’s attorney;
• Reviewing and responding to repair requests that may be made by Purchaser’s attorney;
• Ordering various items that you may be required to provide to the Purchaser under the contract, including: title insurance; survey; homeowner’s association letter; municipal transfer tax documents; pest inspection; and a well and septic test;
• Working with you to resolve any items that may appear on a search of the title of your home, such as mechanic’s liens or other liens;
• Preparing your closing documents, including a deed, bill of sale, affidavit of title, transfer tax declarations, documents required by the title company; and closing statement;
• Representing you at closing. In most real estate sale transactions, you should be able to sign a Power of Attorney, which will allow your attorney to attend and complete the closing on your behalf.
Whether you are purchasing or selling a home, among the most important functions of your Real Estate Attorney is to make sure that you understand every aspect of the transaction and to answer any questions that you may have. First-time Purchasers and experienced Sellers alike may be overwhelmed at times throughout the process; your Real Estate Attorney is there to guide you through it.
Can’t my Realtor handle the entire transaction?
Your Realtor is an integral part of the real estate transaction. As a Purchaser, your Realtor can help you determine how much you can afford to spend, help you find the perfect home and negotiate the price and other terms of the contract on your behalf. Your Realtor’s familiarity with a local real estate market, including real estate values, taxes, municipal services and facilities, and local zoning requirements (to name a few factors) will be immensely helpful in your decision to purchase. As a Seller, your Realtor will use his or her knowledge to prepare and market your home for sale and negotiate the other terms of the contract on your behalf.
However, what your Realtor cannot do is practice law. Each real estate sale or purchase transaction – even one that may seem simple — involves a variety of local, state and federal laws. As either a Purchaser or Seller, entering into a real estate contract will impose upon you a number of legal obligations and give you a number of legal rights. Only a licensed attorney may provide you with legal advice on these matters.
Is a Real Estate Attorney expensive?
Relative to the costs of most other legal services, fees for Real Estate Attorneys have historically remained very low. Most real estate attorneys charge a reasonable flat fee for transactions. (Please note that extra fees may be charged if your transaction is more complicated than usual or involves services outside the scope of those usually performed in such a transaction.) In any event, the fee you pay to an attorney is insignificant compared to the costs you could incur if your transaction is not handled professionally.
For answers to any other questions you may have about your real estate transaction or to retain legal representation, please contact Jim Flanagan via telephone at (815) 254-1100 or via e-mail.