Do You Need a Real Estate Attorney When Home Buying?

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If you have any experience in real estate or have researched the home buying process, you have heard mention of attorneys. At some point in the process, attorneys typically get involved. But do you need a real estate attorney to purchase real estate? Not necessarily.

Buying property follows a complicated process and a real estate attorney can help by providing legal advice, offering mediation in disputes, and navigating complications that arise. The average residential home buyer isn’t trained in real estate nuances. Still, attorneys cost money and if you’re tightening the belt, you can forgo the attorney in some transactions.

Here, we’ll discuss what real estate attorneys do, when you will definitely need one, and what it costs to retain an attorney’s services.

What does a real estate attorney do?

Real estate attorneys can do a lot for you depending on the relationship you have with them. The most common reason people hire an attorney, however, is to draw up a purchase and sale agreement (PSA) to complete the home purchase.

Some other real estate attorney responsibilities may include:

  • Negotiating your contract with the seller’s attorney
  • Coordinating communication with lenders, title agents, real estate agents, and other parties in the transaction
  • Helping to draw up leases or eviction notices, if necessary
  • Ensuring all title documentation is accounted for and fixing any issues
  • Drafting the deed
  • Drafting the closing HUD-1 or settlement statement, a document that accounts for all of the costs involved in the home sale
  • Ensuring all documents involved in the home sale go on official record
  • Reviewing and helping you understand the fine points of your liabilities, obligations, and other contract terms
  • Attending your closing to make sure everything goes smoothly and you get the best deal possible

In commercial real estate deals, attorneys can also offer assistance with building and development projects by working to resolve zoning issues and offering general litigation.

Do you need a real estate attorney?

So, do you need a real estate attorney when buying a house? That depends. In some states, you’re required to have an attorney involved in the sales process or at the closing table. Other states leave it up to you and your lender.

You need a real estate attorney in these states:

  • 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
  • West Virginia

Real estate laws change frequently so make sure you check your local laws and ask your agent for guidance.

If your state doesn’t require an attorney, you may still want one. That comes down to your personal choice and situation. How well do you know real estate law? If you’re reading this piece, you’re probably not as confident as you should be to manage a real estate deal yourself. Still, with the help of an agent, you can probably navigate most standard home purchases without an attorney.

Some scenarios in which you may want to enlist the help of an attorney include:

  • Building or buying real estate for your business
  • Issues with a tenant
  • Buying or selling a commercial property with existing tenants
  • A development project is facing land, title, or environmental issues
  • You’re working with foreclosure proceedings
  • You want to negotiate a better deal
  • Your target property has physical issues, has environmental toxins, or is in a hazard-prone area
  • Your target property is owned by the bank or has liens against it
  • You’re buying in another state or country

Each of these scenarios present new challenges that most ordinary people won’t know how to navigate. If you’re dealing with a less-than-straightforward real estate transaction, it’s a good idea to enlist an attorney.

How to find a real estate attorney

Finding a real estate attorney is easy. There are a lot of them out there. You can search for real estate attorneys in your area online or check with the local American Bar Association chapter for recommendations. Better yet, ask people you trust like your agent, lender, or homeowner friends for recommendations.

You should interview a couple of lawyers before making a decision. Find out how lawyers charge for their services and what the price range is. Ask if a lawyer’s price includes the time to review, discuss, and negotiate aspects of all documents or if it’s just to have the lawyer at closing. 

Also, you should gauge any candidate’s availability. If you’re in the middle of a contentious negotiation, you need to resolve disputes quickly. A lawyer helps with that, but not if you can’t reach them. Knowing how many residential real estate transactions per year will help you gauge how busy a candidate is and gives you an idea of their experience level. Someone who works a lot may not be as available as you would like, but they’re also popular for a reason. Finding the right fit for you requires threading a needle.

How much is a real estate attorney?

As we touched on a moment ago, real estate attorneys vary with how they charge clients. Many real estate attorneys charge a flat fee, ranging from $750 to $1,250. That depends on the location, however. A lawyer in Gary, Indiana will charge less than a lawyer in New York City.

While a flat fee covers most of an attorney’s services, sometimes there are carve-outs and exceptions that can increase the price. An attorney’s quote is just a quote. If the process becomes more complicated, they may charge more for their time. Before you hire someone, make sure you understand how the price will increase should issues arise.

Other attorneys charge by the hour, with hourly rates ranging from $150 to $350. Will that price work out in your favor compared to a flat fee? It’s hard to say. Most experts recommend using an attorney who charges a flat fee.

In some states, you must retain the services of an attorney to purchase real estate. In others, you don’t. Still, attorneys give you the priceless service of peace of mind. Real estate transactions are complicated and while an agent can help you with a lot of the process, an attorney helps you navigate any unexpected legal problems. It may seem like an added expense, but it’s worth hiring a real estate attorney in the vast majority of situations.

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