From a legal perspective, you do not need to hire a real estate attorney when you purchase or sell land or property. In fact, you do not even have to involve a real estate agent as you can draw up a legal agreement directly with the other party involved in the transaction. However, hiring a real estate attorney does provide some benefits and could help you to avoid running into legal issues related to the transaction.
When you buy or sell a piece of real estate, you and the other party involved must sign a real estate contract. Many people rely on their real estate agent to draw up these contracts; agents often have standardized forms that comply with state laws that they use for every real estate transaction involving one of their clients. However, while generic real estate contracts contain the necessary verbiage that a contract should include, you run into problems if your real estate transaction involves anything out of the ordinary that the contract does not cover, such as a situation in which a seller agrees to conduct certain repairs.
You can ask your real estate agent to make amendments to a standardized real estate contract, which many agents frequently do to accommodate the needs of certain clients. However, real estate laws vary from state to state and most real estate agents are not practicing lawyers. While real estate agents have a broad knowledge of real estate transactions, an opinion based on prior real estate experience and state law are two entirely different things. A real estate attorney can prepare a legally valid document, tailored to your needs, that complies with state law.
After you sign a contract in which you agree to a real estate transaction, you normally have to wait a few weeks for the lender to appraise the property and complete the loan underwriting process. On the day of the loan closing, you sign the actual sale documents. Problems sometimes arise with regard to titling or the condition of the property between the contract date and the closing date. In some instances, unwitting buyers receive a quit claim deed at closing rather than a warranty deed. Both documents enable you to transfer ownership but a warranty deed shows that no liens exist on the property while the quit claim deed does not. A real estate agent or buyer may not notice such a detail but a real estate attorney would.
Legal issues can arise after you complete a real estate transaction and, in some states, you have the right to sue your real estate agent, the seller or even the home inspector if problems emerge with the home after the completion of the sale. If the real estate attorney facilitated the sale, then the attorney already has prior knowledge of the sale, which makes any litigation much easier to complete. While many real estate transactions move smoothly without the involvement of an attorney, people involved in sales that go awry often end up wishing that they hired an attorney.
- Bankrate.com; Five Questions to Ask a Real Estate Attorney; Jennifer Acosta Scott; May 2010
- Bankrate.com; Do You Need a Real Estate Attorney; Dana Dratch; March 2005
- Bankrate.com; Should we buy a Home Without a Real Estate Attorney?; Don Taylor; March 2004
- Bankrate.com; Buyer Representation Agreements; Diana McLaren; March 2011