Buying or selling your home can be a stressful process, with many steps you may be unfamiliar with. Most people only buy a house once or twice in their entire lives. Since this can be such a big investment in your life, you want to make sure you have trained professionals on your side to help you through the process. Having a real estate agent helps, but having an experienced one is invaluable. Involving a real estate attorney in your transaction can protect your interests and ensure that your closing goes as smoothly as possible.
What Is a Real Estate Attorney?
In many states, lawyers can help regular people with many issues they run into, from traffic tickets to buying a house. Real estate attorneys are lawyers who specialize in dealing with matters related to property, from buying a home to boundary disputes. They often handle closings—the final step in a real estate purchase transaction where the documents finalizing the transaction are completed. They also work with mortgage lenders and title insurance companies to make sure the transaction goes smoothly and that your property is protected.
Why Do I Need One?
There are many reasons to have a real estate attorney involved in your property transaction. In most cases, the real estate attorney is the go-to expert in providing legal advice should you run into an unexpected situation. They ensure that the transfer of property is legally binding and done in their client’s best interest and can help you navigate issues if there is a dispute.
The real estate attorney does not have a personal interest in the outcome of the transaction other than making sure their client’s best interests are taken care of. Other people involved in the transaction (including real estate agents) may have a great financial interest in the outcome because they are working on a commission basis. While those with a financial interest in the transaction may try to steer your decision-making process, your attorney is there to provide the information to help you make the best decision for yourself.
Most states have rules against the unauthorized practice of law. In a real estate transaction, the real estate attorney is the only person who can accurately explain the law to you and provide legal advice. Whether you are involved in a residential or a commercial transaction, a skilled real estate attorney can be a great resource if you have questions.
Real estate attorneys also have the legal training to help you handle property issues that may pop up unexpectedly, or help you navigate complications in your transaction. The attorney is the person best equipped to help you figure out what to do if it is discovered that there are disputes over property lines, easements, or other matters related to the transaction.
If there is a dispute over the contract for the property, a real estate attorney can also answer any legal questions you may have about your obligations under the agreement. Questions about backing out of a contract or getting your earnest money back are best directed to a professional who can explain to you the repercussions you may encounter if you cancel the contract.
Real estate attorneys not only provide legal advice and answer questions. In many states, they also perform title searches to certify the title to the property is free and marketable. This usually entails a search of all the public records to determine ownership of the property and the status of any outstanding mortgages and liens on the property.
The results of the title search determine what requirements may need to be met in the transaction to secure a title insurance policy for the new buyer. For example, if there is an existing mortgage on the property, a title insurance company may require the old mortgage be paid off to issue an insurance policy.
Working with Other Parties and Performing Closings
The real estate attorney and their team also work with mortgage loan officers, the other party’s attorney, and the real estate brokers to make sure that the transaction proceeds smoothly. Most times they will help you sign your final mortgage loan package at closing and send your mortgage documents back to your lender to get authorization to fund your loan.
In some states, real estate closing transactions are legally required to go through a real estate attorney’s office, and the law requires the funds to be disbursed through the attorney’s trust account.
Drafting and Recording Documents
One of the most important things that a real estate attorney does for a property transaction is review and draft the documents that will transfer ownership of the property. Attorneys can draft purchase contracts, deeds, and other agreements related to the transaction.
It is also the attorney’s responsibility to make sure the documents for the transaction are correct. Mistakes in the legal description of the property being transferred can cause serious problems down the road, so you want to make sure you have a real estate attorney involved to cut down on any potential problems in your documentation.
Some states require deeds and mortgage documents to be filed with county Register of Deeds offices to be effective. The attorney can facilitate this part of the process to make sure your transfer of property is legal, binding, and effective, and that official public notice of the transfer of ownership is available in your local property records.
How to Find a Good Real Estate Attorney
Since having a real estate attorney is important to a successful and smooth transaction, you must know how to find an experienced attorney who will be a good fit for your needs.
If you don’t already know a good attorney, you can always ask for referrals from people you know. Take recommendations from brokers involved in your transaction with a grain of salt because you don’t know what kind of arrangement they may have with the attorney’s offices. Sometimes, perfectly good attorneys may feel the need to help a transaction go through to keep getting business referrals from the brokers.
State Bar Referrals
In some states, you can contact your state bar association and ask for a referral to a licensed real estate attorney. Many bar associations keep records of licensed attorneys in their state and can direct you to someone with a good record with the state bar who also specializes in real estate transactions.
Lawyer Match Services
There are also several online referral services. You can usually use these services to search for the area of law you require an expert in, and they can match you with law firms or attorneys in your area who work in the appropriate area of law.
Once you have a list of potential real estate attorneys, you can always narrow down your options by asking for a consultation. Before you go to their office, you will want to ask about a consultation fee. Some attorneys may offer free initial consultations, but some charge a small fee for an initial interview. If the attorney charges for an initial interview, you will want to know what the fee is, and how long the consultation will last. You may get most of the information you need over the phone without an in-office consultation.
Some information you should consider before making a final selection of your attorney includes:
Starting Your Case or Transaction
Once you have selected the real estate attorney to handle your transaction, the attorney’s office may contact you to collect important information to get a file started for your case or transaction.
Most times, the attorney’s office will have information sheets for you to fill out detailing the property address, your name and the proper spelling for names of the people or entities that will take title to the property, the sale price of the property, and other pertinent information. If you are selling the property, they may also ask you to confirm whether you have a current mortgage or home equity line of credit on the property (which they will verify in the public records during a title search). To help your transaction go quickly and smoothly, it is in your best interest to fill out and send the information sheets back to the attorney’s office.
While many people may think trying to go through a real estate transaction without an attorney involved may save them money, in reality, that is not the case. Having an experienced real estate attorney on your side can not only ensure that your transaction is legally binding, but it can also provide you with peace of mind. You can rest easy knowing the legal issues associated with transferring property are taken care of.
If you are taking part in transferring real estate, it is in your best interests to reach out to a real estate attorney to help you navigate the process and answer any legal questions you may have.
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