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Buying or selling real estate is a major decision and an important investment. If you consider the complexity of real estate laws, even the smallest misstep could cost you money. That’s why you might need a real estate attorney for certain transactions, or a real estate attorney, to navigate all the necessary legal requirements. They can also help you avoid potential landmines, so you can protect your real estate investment.
Here are the different services offered by real estate attorneys and the scenarios when it makes sense to hire one or when you might not need one.
What is a Real Estate Lawyer?
A real estate attorney is a licensed professional who handles legal responsibilities related to real estate transactions. The lawyer can represent the interests of the buyer, the seller or the lender. One of their main tasks is to prepare and review the relevant documents necessary for the sale and purchase of the property.
What a real estate lawyer does
The services offered by real estate lawyers vary. Some work on transactions related to commercial real estate, such as office space; others focus on the development, sale and purchase of residential accommodation; and some have more general expertise involving all types of property.
Here are some of the tasks that the real estate lawyer can perform during a transaction.
Negotiate real estate offers
The real estate attorney performs due diligence ensuring that terms are included in the agreement that protect your interests. They also advise that the transaction complies with state and federal laws.
Drafting and reviewing real estate contracts
The lawyer makes sure that the contract, such as the purchase, the mortgage or the rental agreement, is airtight and includes all the legal requirements and the necessary conditions.
Perform title searches
Real estate attorneys also perform title searches. A title search is necessary in many situations to ensure that:
- The seller has the legal right to transfer ownership to the buyer
- There are no liens on the property
- There are no outstanding issues that affect the buyer’s ability to take possession of the property
- There are no covenants or zoning ordinances restricting land use
- All property taxes have been paid
Title Insurance Policy Projects
A title insurance policy covers any third-party claims on a property that arise after the closing of the real estate transaction and were not discovered during the initial title search. In addition to drafting title insurance policies, a real estate attorney can also review the policy for exclusions and exceptions that are not covered.
Prepare closing documents
The real estate attorney can manage the loan closing process and ensure that all necessary documents, such as the closing deed and statement, are properly filed.
Take charge of disputes and real estate disputes
The lawyer can represent you in a real estate dispute, either by negotiating a settlement or by representing you at trial if it escalates into litigation.
Act as a representative in foreclosure actions
Real estate lawyers are also needed in foreclosures, which is when the lender takes legal action to take possession of a property whose owner has not made the loan payments.
Dealing with zoning and land use issues
Local governments have specific regulations governing land use. Areas are zoned for single family homes, apartment buildings, commercial use only, or mixed use. A real estate attorney can help a landlord or potential buyer request a land use change or represent other landlords in fighting a rezoning.
Related: What is a ground lease?
File silent title actions
If a problem is discovered during the title search, one that the real estate attorney cannot resolve by correcting the title in the public records, then a discrete title action must be filed. This is a lawsuit that names all of the parties who may have a claim to the property, putting them on notice to respond or have their rights waived by the court.
Drafting and revision of leases and sub-leases
Real estate attorneys help draft leases and sub-leases for residential and commercial properties. They can also review them on your behalf to ensure there are no potentially problematic terms.
Construction loans and contracts
A real estate attorney can help you negotiate and draft a construction contract, as well as manage the closing of the construction loan. These loans tend to be more complex than a residential home purchase, covering issues such as cost, time, liability and more.
Manage disputes and negotiations
Whether it’s a dispute over a fence or building encroachment or negotiating the use of part of the property, you’ll need the help of a lawyer who specializes in real estate law to protect your interests.
Prepare and review alliances
A real estate attorney can help homeowners associations draft covenants governing what landlords can do with their property. They can also review covenants, before you make a purchase, to identify regulations that will limit your ability to make improvements to the land or property.
Other unusual scenarios
Finally, there are also less common situations where you might benefit from the help of a lawyer. This may include buying or selling property through an estate sale, short sale or foreclosure auction, buying property in a different state than where you live, sell as part of a divorce settlement, or sell property to pay off your debts.
When do I need a real estate lawyer?
While it’s up to you whether or not you need a real estate attorney for most services, there are some situations where you should hire one.
Many states have laws requiring the involvement of a licensed real estate attorney in transactions, especially during closing. These include the District of Columbia and the following states: Alabama, Connecticut, Delaware, 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.
The exact requirements vary by state, so be sure to confirm what the law requires in the area where you plan to buy or sell property.
By state law, some lenders also require the presence of a real estate attorney at the closing. For example, Rocket Mortgage requires you to hire an attorney to handle your closing if the property is located in Connecticut, Delaware, Georgia, Massachusetts, New York, South Carolina, or West Virginia.
Should you hire a real estate lawyer?
If the transaction is not in a state where a real estate attorney needs to be involved, then you need to decide whether it makes sense for you to hire one or not.
When Should You Hire a Real Estate Lawyer
There are times when it makes sense to work with a real estate attorney, such as:
- You want an independent third party to review the contract and represent your best interests throughout the transaction.
- Depending on the fees, hiring one could be a worthwhile investment to ensure you don’t end up with any risk or legal liability.
- It helps to have an expert to guide you through all the complex legal issues involved in the real estate transaction and help you make the right decisions.
When You Shouldn’t Hire a Real Estate Lawyer
There are also reasons why hiring a real estate lawyer might not be the best idea, such as:
- This can be a significant expense, especially if your state doesn’t require a real estate attorney and yours is a simple transaction.
- Hiring a real estate lawyer could have the unintended consequence of making the transaction more complicated than it should be, simply because lawyers are now involved.
- If you are buying a simple house, the services of a title company are sufficient, especially if you do not need legal advice.
How to find a real estate lawyer
If you decide to work with a real estate attorney or need to hire one, there are ways to find the best professional to work with.
- Ask for recommendations. Referrals from friends, family or business contacts, especially those who have recently hired a lawyer to buy or sell a property, can go a long way.
- Use the American Bar Association directory. You can use the directory to find your state’s website and see real estate attorneys in your area.
- Read reviews. Use online review websites to get information about highly rated real estate attorneys in your area, including their specialties, fee structures, and reviews that will inform your decision.
Related: Is buying a house a good investment?
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