What does a real estate lawyer really do?

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  • A real estate lawyer advises buyers, sellers and lenders in real estate transactions.
  • While some states require buyers and sellers to hire legal counsel, most states do not.
  • You may consider hiring a real estate lawyer if your buying or selling is complicated or you want peace of mind.

Buying and selling a home are two of the biggest financial transactions you will ever make. Like most people, you may not be familiar with the terms of a mortgage or your obligations in a real estate transaction. Your real estate agent should be able to help, but their experience may be limited.

Here’s exactly what a real estate lawyer does and how to decide if you need one when buying or selling a home.

What is a real estate lawyer?

Like any lawyer, a real estate attorney has a law degree and has passed the state bar exam for the state in which he works. As a real estate specialist, they have the knowledge and experience to advise buyers, sellers and lenders on all types of real estate transactions. They prepare and review documents and contracts related to the purchase and sale of property.

Real estate lawyers often take elective courses and even do internships in real estate law practice. Some people choose to be certified in real estate law, but this is not a requirement.

Note: A real estate attorney does not have to be a real estate agent to represent a buyer or seller in a real estate transaction, which may include making or negotiating an offer, drafting a contract, filling out a sales contract, and legal disclosure. .

Several lawyers may be involved in a real estate transaction. Here are their differences:

  • Lawyers who represent buyers or sellers are called real estate lawyers. The job of a real estate lawyer is to advise their client to ensure that the best interests of the client are represented.
  • Real estate lawyers hired by lenders are called mortgage lawyers or credit attorneys.
  • Those who only perform the final duties of a real estate transaction are known as closing lawyers and not represent buyers or sellers, even if one of them pays for the service provided. In many cases, the closing attorney is also the lender’s mortgage lawyer.

What do real estate lawyers do?

Depending on the representation, real estate attorneys perform different tasks for their clients as part of a property transfer. Some of the most important tasks that can be performed on behalf of a client are highlighted below.

Real Estate Attorney:

  • Real estate contract projects or reviews
  • Negotiates the terms of the contract on behalf of the seller
  • Gives general advice to the seller regarding the contract and the sale
  • Resolves title issues on behalf of the seller
  • Projects or Act Reviews
  • Resolves disputes over transactions

“If the deal involves seller financing, a lawyer should be involved to draft the mortgage documents, usually on behalf of the seller,” says Dan Mantzaris, partner at DSK Law Group.

Property Buyer Attorney:

  • Performs a title search to make sure the seller’s title is understandable.
  • Prepares a contract of sale on behalf of the buyer
  • Reviews the mortgage agreement and advises the buyer
  • Resolves issues or disputes related to the case
  • Receives title insurance
  • Writes amendments to the standard contract used by realtors.

Lender Mortgage Lawyer/Closing Lawyer:

  • Often acts as the final attorney but does not represent the buyer or seller.
  • Drafting a mortgage agreement and setting the terms of the mortgage
  • Represents the lender in the event of default by the buyer or in the event of a foreclosure.
  • If you are acting as the closing attorney, prepares and submits closing documents for signing, including:
    • Mortgage
    • True loan statement
    • header
    • bill of sale
    • Loan Application

“If the lender’s attorney is also acting as a mortgage broker or commission agent for a bank or mortgage company, he or she may be required to obtain a special government license,” Mantzaris notes.

How much does a real estate lawyer cost?

How much you pay your real estate attorney (or attorneys) will depend on the services they provide, your location, and whether they charge by the hour or charge a flat fee. If you hire a lawyer early in the process of buying or selling a home, you will pay more than someone who hires a lawyer just to close a case.

If you are a buyer and your lender requires an attorney to be present at the closing of the transaction, you will likely pay for that attorney, as well as your own attorney if you decide to hire one. According to Rocket Mortgage, in general, real estate attorneys charge between $150 and $350 per billable hour, or a flat fee of $500 to $1,500 for their services when closing a deal.

How to decide if you need a real estate lawyer

Each state has its own laws and requirements when it comes to real estate transactions, as well as when and in what cases a lawyer is required. In many areas, real estate agents use standard forms of home sales agreements that agents can legally complete on their own.

If your state considers certain aspects of a real estate transaction to be legal practice, the presence, participation, or supervision of a lawyer may be required.

For example, according to October Research, eight states require both the buyer and the seller to be represented by legal counsel when closing a deal:

  • Connecticut
  • Delaware
  • Georgia
  • Massachusetts
  • North Carolina
  • Rhode Island
  • South Carolina
  • West Virginia

Seven states require a lawyer to oversee the title process:

  • Alabama
  • Louisiana
  • Mississippi
  • North Dakota
  • Oklahoma
  • North Dakota
  • Wyoming

Although it is not a legal requirement, four states have a practice of having a lawyer participate in the closing process:

  • Illinois
  • New Jersey
  • NY
  • Ohio

In addition to state law, some lenders require an attorney to be present when closing a deal. In these cases, the buyer usually pays for this service, even if the lawyer does not represent the buyer in the transaction.

If you are not required to hire a lawyer, you decide whether you want to hire a lawyer.

Some real estate transactions involve or later develop complications that only a competent lawyer can handle, including:

  • Problems with the lot line
  • New construction
  • Zoning controversy
  • Name defects
  • Selling short or buying with foreclosure
  • Purchase of commercial real estate
  • Sale of investment property
  • Sale of property as an heir

In these situations, hiring a real estate attorney can mean the difference between success and failure. “Even if the deal is simple, you may want to see a lawyer, especially if you don’t understand the documents or the terminology,” says Ann Ross Taylor, attorney and co-owner of M&M Title Company.

First of all, hiring a real estate lawyer can give you peace of mind by acting as insurance against issues that you cannot see or predict.

Benefits of a good real estate lawyer

While only a few states require you to have a legal advisor in a deal or transfer of ownership, many experts say you should carefully consider hiring a lawyer when buying or selling a home. If your sale or purchase involves unusual circumstances, such as a short sale, you will almost certainly need a lawyer.

Real estate agents cannot provide legal advice or services unless they themselves are lawyers. In addition to guidance and advice, hiring a real estate attorney provides a form of insurance against major financial mistakes. It is up to you to decide if this insurance is worth the initial cost.

How to Find the Right Real Estate Lawyer for You

Your real estate agent can recommend real estate lawyers that clients have used and liked in the past. You can also visit the State Bar Association website to find a lawyer near you. Use the American Bar Association directory to find your state’s website.

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