Granted, real estate deals are complicated transactions, so the last thing you want is to land in legal hot water. Nonetheless, in the same way you may not want to hire a travel agent to book a trip these days, you also don’t want to shell out for an attorney when you can make do without him, either.
So if you’re on the fence or just unsure if a real estate attorney is required for you, here’s some straight-up info to help you figure that out.
What does a real estate attorney do, anyway?
A real estate attorney takes over after the selling price and terms have been established by the real estate agents in the contract and all parties have signed. At that point, a real estate attorney reviews the contract and, once a home inspection and title search have been done, negotiates repairs and other adjustments to the terms of the deal.
That all sounds great, but do you actually need one?
States that require a real estate attorney
Many states have laws mandating the involvement of a real estate attorney, often requiring their presence at closing. These include Alabama, Connecticut, Delaware, District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and West Virginia. Keep in mind that these rules can vary by region within states, too.
Others states allow the buyer and seller to decide if they want to hire an attorney. So what if it’s up to you?
Reasons to hire a real estate attorney even if it’s optional
Reasons for buyers to hire an attorney
- You’re an out-of-town buyer.
- You’re buying a property that is a short sale or bank-owned.
- You’re buying a property that is part of an estate sale.
- You’re buying a commercial property.
- You’re buying a property that could potentially have some structural issues.
- You’re buying a property in a problematic area such as a flood zone or areas with adverse conditions (tornado-prone, radon, toxicity levels, etc.).
Reasons for sellers to hire an attorney
- You’re selling a property that is in some state of distress.
- You’re the heir or executor of a property whose owner is now deceased.
- You’re selling a house with an uncooperative partner.
- You have judgments or liens on the property.
- You have that gut feeling that something could possibly go wrong based on knowledge you have about the property.
If any of the above scenarios apply to your situation, then hiring an attorney may be strongly beneficial. If none of these scenarios apply, then you may be fine to use your real estate agent’s knowledge and expertise to take you through to closing.
As part of agents’ licensing education, they’re taught and tested on real estate contracts used within their state, many of which also require continuing education courses and/or certifications on subjects such as ethics, buyer’s agency, distressed property sales, and more. All of these measures are in place to protect all parties—both buyers and sellers as well as agents.
When in doubt…
Some experts, however, believe you should always hire a real estate attorney, no matter the circumstances.
“It is an added level of protection for both sides in covering the seller and buyer for all items on the contract,” says Charlie Gallovitch of Real People Realty in Mokena, IL. “It is especially helpful for home inspection negotiations. Very simply, it is a necessary level of protection for the clients for one of the largest purchases/sales of their life.”
“Sometimes the parties want to believe that using form contracts and documents will ensure that there are no legal issues,” adds Zuetel. “However, given the number of laws on the books, a form contract and a nonattorney real estate agent can rarely address all the issues that might arise during a real estate transaction.”
Some brokerages offer the services of a real estate attorney and broker in one at no additional cost.
How much does a real estate attorney cost?
If you hire one, it will depend on where you live, but you can expect to pay $800 to $1,000.
Having an attorney involved early in the process can often save time and money in the long run, Zuetel says.
“If the real estate attorney is retained and involved early enough, the attorney may be able to prevent a larger dispute that could develop later in the transaction and cost all parties far more in attorney fees, costs, and time,” he explains.parties from around the web; as such, the operators of this website assume no liability or responsibility for any of the contents contained herein, or the contents of websites that we may link to. Furthermore, all copyrights belong to their original creator(s). Use of any portion of this website constitutes full acceptance of this disclaimer.