Residential Real Estate Lawyer – Do You Really Need One?
Some states require lawyers to participate in residential real estate transactions, especially at closing or settlement. Notice how I said, “some states require…’” not simply that you need a real estate lawyer. The majority of states are known affectionately (by real estate lawyers) as, “non-attorney” states. In those states, conducting real estate closings is not considered the practice of law, so you are not required to have a real estate lawyer. The rest of the country resides in either, “attorney” states or states that have mandated the participation of real estate lawyers either for the entire closing or for some parts of the closing. (The parts where you need a real estate lawyer are usually defined by the clear as mud description, “those instances requiring the use of legal discretion and profound legal knowledge.”) Since choosing the right real estate lawyer can save you a lot of aggravation, you want someone who is:
Licensed and in good standing. Many states have web sites where you can look to see that the real estate lawyer you are considering is both licensed and in good standing.
Experienced. Word of mouth can be the best recommendation. If a friend or relative has been well served and satisfied with a real estate lawyer, chances are you will be also.
Real Estate Savvy. This is a specialized area. Just as every midwife might be capable of handling a simple birth, every lawyer might be capable of handling the so-called simple closing, (in California and other “non-attorney” states, people generally do not even use lawyers for residential transactions.) It would be nice, if at the beginning, you could know if yours will be one of those simple transactions. However, since most of us cannot see into the future, if you decide to hire a lawyer, you’ll want one well versed in real estate law and its peculiarities.
In your area. It is important that the real estate lawyer you hire be familiar with local rules and ordinances as they can have an enormous impact on how smoothly your deal flows.
That you can work with. There is no point in hiring someone you either do not like or do not trust. What good does it do you if you cannot rely on the information she gives you or, just as bad, you cannot stand talking to that person? A real estate transaction is not brain surgery; there are plenty of good real estate lawyers who also have pleasant personalities. You do not want to hire someone that does not play well with others. Your lawyer will be dealing not only with you, but with your buyer. You want someone who will help get the job done while protecting you.
How Can You Tell If Your State Is An “Attorney” State?
The easiest way is to log onto a website, such as [http://www.legalwiz.com/escrow.htm] which has a list. In addition to that, you can call your local bar association, your local title insurer, your local mortgage lender, or your local escrow agent. Using the word “local” is no accident. All real estate is local and all real estate laws are local in the sense of being governed by the state law of the state where the property is located.
If your house is located in an “attorney” state, adding a real estate lawyer to your team is both necessary and prudent. You’re going to have to have one anyway, so you might as well get her or him on the team early.
Do I Need A Real Estate Lawyer In A “Non-Attorney” State?
If the house you want to sell is in one of the majority “non-lawyer” states, you might need a real estate lawyer at some point if things get complicated, but there is no rush. In “non-attorney” states, closings usually take place through escrow. Although the escrow agent does not represent you, they are usually very knowledgeable and they are obligated to follow the directions you outlined when the escrow was set up.
If you do hire a real estate lawyer, she can be your second most valuable player. From advising you on such matters as the contract, disclosures, title, inspection issues, to holding the earnest money and handling the closing.
REMEMBER: Even in “attorney” states, real estate lawyers are not deal makers. Their job is to make sure the contract is properly executed. They may or may not be involved in the actual negotiations.
TIP: In some areas, real estate lawyers make a large chunk of their money from the title company they work with. As the seller, it will be your responsibility to bring down title. Therefore, working with an real estate lawyer who has a relationship with a title company, could be to your benefit.