What a Real Estate Attorney Can Do for You
When you purchase a home, it includes a legal property transfer from one entity to another. Real estate transactions can become quite complex, especially as the market is ever-evolving with the increased presence of foreign buyers, publicly traded real estate investment trusts (REITs), and house-flipping enterprises. A real estate lawyer can look out for your best interest, as it is easy to make a costly error while trying to make sense of the legal language. Having an attorney to guide you is worth the expense and pays for itself by preventing problems that cost more money to resolve.
What a Real Estate Attorney Does
A licensed real estate attorney has the knowledge and experience to advise and support you in specific situations. They can evaluate the details of a property for sale or purchase and understand how to prepare and review documents and contracts relating to the deal, whether you are the buyer or seller. The real estate lawyer can also be in charge of closing. Both parties (buyer and seller) may hire an attorney to represent their interests. Additionally, a closing attorney may represent the mortgage lender as a condition of sale when a home’s purchase includes a mortgage loan.
State Laws and Local Requirements
Whether you need a real estate attorney may depend on your state laws, the transaction’s exact nature, and whether your lender requires one. Every state has slightly different rules governing real estate transactions. In those states with the requirement, lawyer services can be part of the closing costs. Some state requirements consider certain parts of a real estate transaction as “practicing law.” Therefore, real estate agents are not permitted to act in this legal capacity if they do not have the proper training and licensing. Still, in other states, a standardized contract for home purchases allows real estate agents to conduct these transactions.
Whatever area your purchase or sale takes place, there are key points during the home buying process where a real estate attorney can provide assistance and protect your best interest, such as:
- Draft, review, and finalize purchase contracts
- Write amendments for inclusion in a real estate agent’s standard contract
- Complete a thorough title search
- Conduct the closing
If complications arise during your home purchase, a real estate attorney will recognize the problem and amend or clarify the contractual issues before closing.
Protect Yourself when Making Significant Financial Investments
For most Americans, purchasing a home is one of the most significant financial transactions they will ever undertake. Professional legal counsel can ensure the process is as smooth as possible. Your lawyer can identify potential issues, working through tricky contractual law or situations such as the validity of home appraisals and which party pays for corrections, title encumbrances, land use, and contingencies.
Average Costs for Hiring a Real Estate Attorney
The costs of a real estate attorney will depend on the services they provide and which party is responsible for those particular closing costs. If a closing attorney is a requirement of your mortgage lender, how your real estate contract is negotiated will identify the party responsible for closing costs. You may still opt to have an attorney in addition to the one your lender requires, but you will be responsible for the cost of their services. The expenses will range depending on location and the price of the property, but here is a general breakdown:
- Fixed hourly rate – The range for a real estate attorney who charges by the hour is about $150 – $350 per hour. Prices may depend on the attorney’s experience level and the purchase area. Some attorneys will charge in 15 or 30-minute increments and differentiate when using less expensive paralegal services. Inquire about their specific billing structure.
- Fixed rates for specific services – Some attorneys will charge a flat rate for the particular services they provide. For example, representing your interest during closing may range from $500 – $1500 again, depending on the location and property sale price.
When hiring a real estate lawyer, they may represent the buyer or the seller, but not both due to a conflict of interest. Both parties, however, may retain different attorneys from within the same law firm. If you’re the buyer, the real estate attorney ensures the extended offer is valid. When you’re the seller, the attorney helps negotiate favorable terms of the sale. Both buyers and sellers have their rights protected by professional legal advice.
There can be a lot of information and processes that are confusing or intimidating when purchasing or selling a home. It is important to understand what is involved, especially with your first transaction. But it’s impossible to know everything or have the experience to identify potential transaction pitfalls. If you are unsure about the legal implications of buying or selling your property, hire a real estate lawyer to represent your interests and ultimately save you money.
We hope you found this article helpful. Contact our Chicago area office at 630-568-6656 to discuss how we can help you with any legal real estate questions you may have. We look forward to the opportunity to work with you.