As a prospective homebuyer, you know the importance of hiring a real estate agent to help you navigate the process. Your agent will find properties, schedule showings, and guide you through the process of putting an offer in on a home.
But did you know that you may also need to hire a real estate attorney? You may also be wondering: what is a real estate attorney?
A real estate attorney ensures the legal transfer of property. When buying a home, the attorney will ensure that the house is transferred from seller to buyer. A real estate attorney also handles various other tasks, including preparing documents, reviewing the title, and facilitating funds transfers.
These duties will vary depending on who hires the attorney and which state or local laws apply for home purchases.
What Does a Real Estate Lawyer Do?
A real estate lawyer deals with ‘real property’ transactions. Real property includes land and permanent structures that reside in a fixed location.
In most instances, purchasing real property doesn’t have to involve the court. Instead, the seller or buyer can hire a real estate attorney, who then prepares and reviews all the home purchase documents, to include:
- Seller agreements
- Lender documents
- Title and transfer documents
Your attorney may have a specific attorney checklist for real estate closing to ensure that all necessary information and paperwork has been received. Depending on the lawyer, this paperwork may be physical or digital as it is becoming more common to purchase real estate by paperless transactions.
Depending on local laws and preferences, a real estate lawyer will attend closing either in person or virtually. They are there to facilitate a smooth transaction and to answer any legal questions that may arise.
Sometimes real estate attorneys handle other parts of the home purchase process. For instance, some attorneys handle title searches and title insurance. This protects the seller by ensuring that there are no liens or outstanding claims against the property.
Real estate lawyers may also draft the transfer of funds documentation or facilitate the transaction by acting as a third party.
If there are any legal problems that may hold up the sale of the home or property, a real estate attorney can help develop a suitable solution.
Should You Hire a Real Estate Attorney?
Whether or not you hire a real estate attorney depends on the state in which the property is located. Each state has its own ‘practice of law.’ This means that what a notary can do in one state may require a real estate attorney in another.
Before starting the process of buying a home, research the practice of law in your state regarding real estate. Your real estate agent should also know whether your state requires a real estate attorney to be part of the home buying process.
Several states require the seller or buyer to retain a real estate agent to handle certain parts of the home purchase transaction, including:
- New York
- North Carolina
- South Carolina
- West Virginia
In other states such as Alabama, Louisiana, Mississippi, North Dakota, and South Dakota, a real estate attorney is required to submit a title opinion. A title opinion is a document that shows that a lawyer reviewed the title and does not see any obstacles that would impede the real estate transaction.
Do you need an attorney to refinance? If you’re refinancing your mortgage, you may require a real estate lawyer. If your state requires it for a purchase, a real estate lawyer is usually also needed when refinancing. Note that you will also have to get title insurance for refinancing a mortgage.
If a real estate attorney isn’t required in your state, retaining one is still worth considering. Having legal representation can be quite beneficial if you’re dealing with a short sale or suspect any kind of legal issue.
Your mortgage lender may also require a real estate lawyer. In this instance, you may not have to pay attorney fees because the lawyer isn’t representing you.
In states that require a closing attorney or a refinance closing attorney, the lawyer is a neutral party even though you retain and pay for them. Their objective is to see that the transaction is completed without any legal hiccups.
How Much Will a Real Estate Attorney Cost?
There’s no set fee for how much a real estate attorney will cost. Instead, it’s dependent on the type of services you require and how they decide to charge you.
Some real estate lawyers charge a flat fee that covers a variety of services. Others charge by the hour.
These fees are usually lumped into your closing costs. You will see them listed on your loan estimate under “services you can shop for.” Because this isn’t a set cost, you can retain a lawyer that you feel the most comfortable hiring.
The number given in the loan estimate document is only a best guess. The ultimate cost depends on who you hire and your legal needs.
Finding a Real Estate Attorney
Whether you need a real estate attorney by law or you simply feel more comfortable having one available to represent you, you should start by asking for referrals. If you know someone who has recently purchased a home or refinance, ask if they have a recommended attorney, especially those affiliated with homes for heroes if you need one.
Another great person to ask is your real estate agent. In states that require real estate attorneys, chances are your agent has a few that they have worked with in the past.
Before choosing a real estate attorney, you’ll want to make sure that the legal professional you choose:
- Has solid knowledge of local real estate law
- Is personable (choose someone you feel comfortable with)
- Has good communication skills
- Maintains a solid reputation
- Is in good standing with the state BAR association
With the right real estate attorney, you can have total peace of mind whether you’re buying a home or refinancing an existing one. Having legal representation minimizes the risk of any legal issues that could impact the home buying or refinancing process.
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