Editor’s Note: We earn a commission through affiliate links on Forbes Advisor. Commissions do not influence the opinions or evaluations of our editors.
Buying or selling real estate is an important decision and a significant investment. When you consider the complexities of real estate laws, even the smallest misstep can cost you money. This is why you may need a real estate attorney for certain transactions, or a real estate attorney, to navigate through all the necessary legal requirements. They can also help you avoid potential landmines so you can protect your real estate investment.
Here are the different services offered by real estate attorneys and the scenarios when it makes sense to hire one – or when it might not be necessary.
What Is a Real Estate Attorney?
A real estate attorney is a licensed professional who handles the legal responsibilities related to real estate transactions. The lawyer can represent the interests of the buyer, seller or lender. One of their main duties is to prepare and review the relevant paperwork required for the sale and purchase of the property.
What a Real Estate Attorney Does
The services of real estate lawyers vary. Some work on transactions related to commercial buildings, such as office space; others focus on the development, sale and purchase of housing; and some have more general expertise regarding all types of real estate.
Here are some of the duties the real estate attorney can do during a transaction. Read also : Kohl’s says a real estate sale is on the table after scrapping the deal negotiations.
Negotiate Real Estate Deals
The real estate attorney performs due diligence by ensuring that terms are included in the deal that protect your interests. Read also : Blackstone puts the finishing touches on a record-breaking real estate vehicle. They also advise that the transaction complies with state and federal laws.
Draft and Review Real Estate Contracts
The lawyer ensures that the contract, such as the purchase, mortgage or rental agreement, is watertight and contains all legal requirements and conditions. On the same subject : Homebuyers are once again taking the lead in the cooling real estate market.
Carry Out Title Searches
Real estate attorneys also conduct title searches. Searching by title is necessary in many situations to ensure that:
Draft Title Insurance Policies
Title insurance covers all third-party claims on a property that emerge after the real estate transaction is closed and that were not discovered during the initial search for the title. In addition to writing title insurance policies, a real estate attorney can also review the policy for exclusions and exceptions that are not covered.
Prepare Closing Documents
The real estate attorney can handle the loan closing process and ensure that all necessary documents, such as the deed and closing statement, are properly filed.
Take Care of Real Estate Disputes and Litigation
The attorney can represent you in a real estate dispute, either negotiate a settlement, or represent you during the trial if it escalates to lawsuits.
Act as a Representative in Foreclosure Actions
Real estate attorneys are also needed in foreclosures, which is when the lender files a foreclosure lawsuit in court to take possession of a property whose owner has not made loan payments.
Deal With Zoning and Land Use Issues
Local governments have specific land use rules. Areas are designated for single-family homes, apartment buildings, commercial use only, or mixed use. A real estate attorney can help a property owner or potential buyer change the way the land is used or represent other owners to fight against repurposing.
File Quiet Title Actions
If a problem is discovered during the title search, a problem that the real estate attorney cannot resolve by correcting the title in the public records, a silent title action must be filed. This is a lawsuit that names all parties who may have a claim to the property, giving them notice to respond or having their rights nullified by the court.
Draft and Review of Leases and Subleases
Real estate lawyers help draft leases and subleases for both residential and commercial properties. They can also review them on your behalf to make sure there are no potentially problematic conditions.
Construction Loans and Contracts
A real estate lawyer can help negotiate and draft a construction contract, as well as closing the construction loan. These loans are typically more complex than a home purchase and cover things like costs, deadlines, liability, and more.
Handle Disputes and Negotiations
Whether it’s a dispute over a fence or encroachment on the building or negotiating the use of part of the property, you need the help of a real estate attorney to protect your interests.
Prepare and Review Covenants
A real estate attorney can help homeowners’ associations draft covenants that determine what owners can do with their property. They may also review covenants — before making a purchase — to identify regulations that limit your ability to make land or property upgrades.
Other Uncommon Scenarios
Finally, there are also situations that occur less often, where you may benefit from the help of a lawyer. This may include buying or selling real estate as part of a real estate sale, short sale or foreclosure auction, buying real estate in a state other than where you live, selling as part of a divorce settlement, or selling real estate to protect your property. to pay off debts.
When Do I Need a Real Estate Attorney?
While it is up to you whether you need a real estate attorney for most services, there are some situations where you need to hire one.
State Requirement
Many states have laws that require the involvement of a licensed real estate attorney in transactions, especially at closing. These include the District of Columbia and the following states: Alabama, Connecticut, Delaware, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and West Virginia.
However, the exact requirements depend on the state, so be sure to confirm what the law requires in the area where you plan to buy or sell real estate.
Lender Requirement
In accordance with state law, some lenders also require a real estate attorney to be present during closing. For example, Rocket Mortgage requires you to have an attorney handle your closing if the property is in Connecticut, Delaware, Georgia, Massachusetts, New York, South Carolina, or West Virginia.
Should You Hire a Real Estate Attorney?
If the transaction is not in a state where a real estate attorney should be involved, then you have to decide whether it makes sense to hire one or not.
When You Should Hire a Real Estate Attorney
There are times when it makes sense to work with a real estate attorney, such as:
When You Shouldn’t Hire a Real Estate Attorney
There are also reasons why hiring a real estate attorney might not be the best idea, for example:
How to Find a Real Estate Attorney
If you decide to work with, or need to hire, a real estate attorney, there are ways to find the best professional to work with.
Related: Is Buying a Home a Good Investment?
Faster, easier mortgage lending
Check your rates with Beter Hypotheek today.
