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Buying or selling real estate is a major decision—and a significant investment. If you factor in the complexity of real estate laws, even the smallest mistake could cost you money. This is why you might need a real estate attorney for certain transactions, or a real estate lawyer, to navigate all the necessary legal requirements. They can also help you avoid potential landmines, so that 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 to.
What Is a Real Estate Attorney?
A real estate attorney is a licensed professional who handles the legal responsibilities related to real estate transactions. The attorney can represent the buyer, seller or lender’s interests. One of their main duties is to prepare and review the relevant paperwork needed for the sale and purchase of the property.
What a Real Estate Attorney Does
The services offered by real estate lawyers vary. Some work on transactions related to commercial buildings, such as office space; others focus on the development, sale and purchasing of residential housing; and some have more general expertise involving all types of property.
Here are some of the tasks the real estate attorney can do during a transaction.
Negotiate Real Estate Deals
The real estate attorney conducts due diligence by ensuring terms are included in the deal that protect your interests. They also advise so that the transaction meets state and federal laws.
Draft and Review Real Estate Contracts
The attorney makes sure the contract—such as the purchase, mortgage or rental agreement—is airtight and includes all the legal requirements and terms needed.
Carry Out Title Searches
Real estate attorneys also conduct title searches. A title search is necessary in many situations to ensure that:
- The seller has the legal right to transfer the property to the buyer
- There are no liens against the property
- There are no ongoing issues that affect the buyer’s ability to take possession of the property
- There are no restrictive covenants or zoning ordinances limiting land use
- All property taxes have been paid
Draft Title Insurance Policies
A title insurance policy covers any third-party claims on a property that comes up after the real estate transaction has closed and was not uncovered during the initial title search. In addition to writing title insurance policies, a real estate attorney can also review the policy for exclusions and exceptions that aren’t covered.
Prepare Closing Documents
The real estate attorney can handle the loan closing process as well as making sure all the documents needed—like the deed and closing statement—are filed properly.
Take Care of Real Estate Disputes and Litigation
The attorney may represent you in a real estate dispute—either negotiating a settlement or representing you at trial if it escalates to litigation.
Act as a Representative in Foreclosure Actions
Real estate attorneys are also needed in judicial foreclosures, which is when the lender files a foreclosure lawsuit in court to take possession of a property whose owner has not been making loan payments.
Deal 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 property owner or prospective buyer petition to change how the land is used or represent other owners to fight against a rezoning.
Related: What Is A Land Lease?
File Quiet Title Actions
If an issue is uncovered during the title search, one that the real estate attorney cannot fix by correcting the title in the public records, then a quiet title action has to be filed. This is a lawsuit that names all the parties that might have a claim to the property, putting them on notice to respond or have their rights voided by the court.
Draft and Review of Leases and Subleases
Real estate attorneys help draft leases and subleases for both 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 negotiate and draft a construction contract, as well as handle the closing of the construction loan. These loans tend to be more complex than a residential home purchase, covering issues like costs, deadlines, liability and more.
Handle Disputes and Negotiations
Whether it’s a dispute over a fence or building encroachment or negotiating the use of a portion of the property, you’ll need the help of a real estate lawyer to protect your interests.
Prepare and Review Covenants
A real estate attorney can help homeowner associations draft covenants governing what owners 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 upgrades to the land or property.
Other Uncommon Scenarios
Finally, there are also situations that occur less frequently, where you might benefit from an attorney’s help. It could be buying or selling a property as part of an estate sale, short sale or foreclosure auction, buying property in a different state from where you live, selling as part of a divorce settlement or selling property to pay off your debts.
When Do I Need a Real Estate Attorney?
Although it’s up to you whether or not you need a real estate attorney for most services, there are some situations when you’re required to hire one.
Many states have laws requiring the involvement of a licensed real estate attorney in transactions, particularly at 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 will vary based on the state, though, so make sure to confirm what the law requires in the area you plan to buy or sell property.
In line with state law, some lenders also require a real estate lawyer to be present during closing. For example, Rocket Mortgage requires you to have an attorney 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 Attorney?
If the transaction is not in a state where a real estate attorney has to be involved, then you have to decide whether it makes sense for you to hire one or not.
When You Should Hire a Real Estate Attorney
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 fee, hiring one could be a worthwhile investment to ensure that you don’t end up with any legal exposures or liabilities.
- It helps to have an expert guide you through all the complicated legal issues involved with the real estate transaction and help you make the right decisions.
When You Shouldn’t Hire a Real Estate Attorney
There are also reasons getting a real estate lawyer might not be the best idea, for instance:
- It can be a significant expense, especially if your state does not require a real estate attorney and yours is a simple transaction.
- Hiring a real estate attorney might have the unintended consequence of making the transaction more complicated than it needs to be, just because lawyers are now involved.
- If you’re making a simple home purchase, the services of a title company are sufficient, especially if you don’t require legal advice.
How to Find a Real Estate Attorney
If you decide to work with a real estate attorney, or are required to hire one, there are ways to find the best professional to work with.
- Ask for recommendations. Recommendations from friends, family or professional contacts, particularly those who recently used 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 the real estate attorneys in your area.
- Read reviews. Use online review websites to get information on highly-rated real estate attorneys in your area, including their specialties, fee structures and any reviews that will inform your decision.
Related: Is Buying A House A Good Investment?
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