10 min read May 16, 2024

What Does a Real Estate Attorney Do? (2024)

A real estate transaction can be challenging for buyers and sellers as it involves extensive paperwork and negotiations. The aid of a real estate agent alone may not suffice, and this is where a real estate attorney comes into the picture.

A real estate lawyer ensures that the real estate transaction is in adherence with the law. In our blog, we’ll take you through what a real estate attorney can do for you – depending on whether you’re a seller or a buyer.

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What Does a Real Estate Lawyer Do?

  1. For Sellers: Real estate attorneys assist sellers in drafting title deeds, short sales, and foreclosures, and negotiating with creditors.
  2. For Buyers: Real estate lawyers assist buyers in drafting the purchase agreement, cancellation of contract and resolving legal disputes.
  3. At Closing: Closing attorneys conclude the real estate transaction by preparing the settlement statement, reviewing closing disclosure form and conducting title search.

What is a Real Estate Attorney?

A real estate lawyer is a licensed legal expert, who specializes in real property law. Real estate attorneys ensure that the legalities are met in a real estate transaction.

They do the major legwork which includes preparing documents such as disclosure paperwork, conducting title searches, negotiating offers, and most importantly, serving your best interests.

What Does a Real Estate Attorney Do?

Some of the crucial tasks of a housing attorney include rectifying the purchase deed, acting as a mediator between the parties, and covering all the legalities involved in the transaction.

A real estate attorney provides various services depending on whether you’re a buyer or a seller. They may verify documents, and draft deeds, but also act as settlement agents.

We’ve categorized the services provided by an attorney as follows:

What Does a Real Estate Attorney Do For a Seller?

Sellers are concerned with titles, liens, and defects while putting their property up for sale. Accordingly, the seller’s attorney performs certain tasks to overcome these obstacles.

1. Drafts the Title Deed

A title deed is a written document that transfers the ownership, rights, title, and interest of a seller to the new buyer. This document contains all the information related to the property and the parties to the contract.

2. Assists With Short Sales and Foreclosures

A short sale is when a lender agrees to transfer property as a mortgage payoff. Homeowners who are financially distressed may turn to make a short sale of their property.

In this case, your attorney proves your financial condition, as well as negotiates on your behalf with the lender, real estate agent, and other parties involved.

Similarly, your attorney can represent you in the foreclosure process and negotiate on your behalf for foreclosure resolution.

3. Mediates Between Multiple Owners or Tenants

In some situations, co-owners of a property are against the home sale. In that case, a residential real estate attorney may act as a mediator between the disputing parties.

There are various formalities that need to be fulfilled before evacuating a tenant from the property. A property law attorney guides the seller through this process and helps them avoid lawsuits in the future.

4. Protects From Legal Issues

Several issues related to the title can occur during a property sale. For instance, when selling an inherited property or when there are easements on the property.

The real estate lawyer rectifies such issues during title inspection and comes up with viable solutions.

5. Negotiates With Creditors in Case of Liens on the Title

A title search of the property is conducted after an offer is accepted. There’s a possibility that liens in the form of unpaid taxes, unpaid balances, or third-party interest may be detected from this search.

In this case, estate lawyers help you assess bad liens and find ways to clear them.

    📝 Note: Tax liens or statutory liens are considered as bad liens as they impact your credit score, which adversely affects your ability to obtain financing in the future.

What Does a Real Estate Attorney Do For a Buyer?

Buyers need an attorney to review the title, various documents, and disclosures. From making a purchase agreement to handling lawsuits for buyers, here are some of the attorney’s responsibilities.

1. Drafts the Purchase Agreement

A purchase agreement in real estate law outlines the terms & conditions of the residential property sale. This document acts as an offer made to the seller of the property, which can be negotiated upon.

The purchase agreement includes the selling price, property details, and the information of the buyer and the seller. Once the parties arrive at an agreement, the contract becomes binding.

2. Solves Contract Disputes and Legal Issues

The possibility of legal issues arising is common after title inspection. Disputes can arise from failure to disclose material facts, appraisal, home inspection issues, title issues, etc.

In that case, attorneys can give you real estate legal advice to either reconsider the contract, depending on the gravity of the legal issue.

3. Assists in the Cancellation of Contract

An attorney assists a buyer who may wish to cancel the contract on account of breach of contract, failure to disclose material defects, or any other reason.

In addition to the cancellation of the contract, the attorney may file a lawsuit against the seller if the buyer incurred damages from the breach.

What Does an Attorney Do in a Real Estate Closing?

In states where a real estate attorney closes on the deal, there are some additional responsibilities they carry out as a settlement agent.

1. Prepares a Settlement Statement

A settlement statement is involved when a buyer has taken out a loan for the property. The settlement statement contains information related to the mortgage such as interest, costs owed, credit score to buy a house, etc.

The Real Estate Settlement Procedure Act (RESPA) has prescribed 2 main types of settlement statements:

  • HUD-1 Form
  • Closing Disclosure Form

The HUD-1 form is mainly used in reverse mortgages. Prior to 2015, it was used in most mortgage transactions, but today it is replaced by the Closing Disclosure Form.

2. Reviews the Closing Disclosure Form

A Closing Disclosure is a standard refinancing mortgage document. The mortgage lender provides this form to the borrower who takes a refinancing mortgage.

It contains the details related to the loan amount, down payment, monthly installments, mortgage deposits, and so on. Further, it lists all the closing costs incurred in closing the real estate transaction.

A real estate closing attorney is well-equipped to handle this paperwork.

3. Conducts Title Search & Title Transfer

In attorney closing states, a real estate closing lawyer conducts a title search of the property. This involves going through public records like land records, tax liens, court judgments, etc. to verify whether the seller is the owner.

The sale process goes ahead if the seller has a clean and marketable title. The attorney for real estate also executes the title deed which is the last step in the real estate transaction.

    📝 Note: Generally, a real estate attorney cannot represent both the parties as it will result in conflict of interest.

Do You Need a Real Estate Attorney?

Whether you need a real estate attorney or not depends majorly on your state’s requirements. We’ve categorized states that mandate a real estate attorney and states that don’t require one.

1.At ClosingConnecticut, Delaware, Georgia, Massachusetts, North Carolina, South Carolina, Kentucky, and West Virginia.
2.During the TransactionAlabama, Louisiana, Mississippi, North Dakota, Oklahoma, South Dakota, Maryland, Wyoming, Rhode Island, and Vermont.
3.Not RequiredIllinois, New Jersey, Ohio, New York, Alaska, Arizona, Arkansas, California, Colorado, DC, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin.

When To Hire a Real Estate Attorney?

Even if your state does not necessitate a real estate lawyer, we still recommend you hire one to safeguard your interests.

Following are the situations where a lawyer can step in to guide you better:

  • When Selling Your Home For Sale By Owner: FSBO home sellers now have access to MLS due to Flat Fee MLS listing services. However, since they lack legal expertise, hiring a property attorney is advisable when selling a house yourself.
  • While Purchasing Commercial Property: A commercial real estate transaction differs vastly from a residential one and so it’s better to seek legal help from a commercial real estate attorney.
  • When There’s a Possibility of a Defective Title or Legal Dispute: Issues related to defective titles can create room for major lawsuits, hence, we advise you to seek advice from a real estate title attorney to prevent legal trouble.

How Much Does a Real Estate Attorney Cost?

On average, private property lawyers charge $100 to $400 per hour, whereas, some lawyers may charge a flat fee for their services. However, this fee differs vastly across states and cities.

Some states require a lawyer to only draft and certify the paperwork, while some require them to see through the whole process. Typically, residential real estate lawyers charge way less if hired only for documentation or certification.

How Do I Find a Real Estate Attorney Near Me?

  • Ask your real estate agent: Generally, real estate agents are acquainted with attorneys in real estate. They can also recommend you based on your requirements.
  • Take a word-of-mouth reference: If you know a friend, relative, or acquaintance who has past experience working with real estate lawyers, approach them for a referral. It’s important to hire a good real estate lawyer for your transaction.
  • Search online: Online directories like American Bar Association provides you with details of local real estate attorneys.
  • Ask your lender: Your mortgage lender is the one who requires the services of a housing attorney the most. In any case, they can recommend you a property lawyer to fit your requirements.

The Bottom Line

A real estate attorney’s role is indisputable for real estate transactions in certain states. They protect you from title problems, bad liens and negotiate on your behalf.

While it may not be mandated in some states, having a real estate lawyer will save you unexpected costs and unnecessary lawsuits. To conclude, your real estate attorney will help you buy a house or sell one with much greater ease.

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Frequently Asked Questions (FAQs)

1. Is an attorney a lawyer?

Yes, an attorney and lawyer have the same meaning and both the terms can be used interchangeably.

2. What does a real estate lawyer do?

A real estate transaction attorney assist in drafting the title deed and purchase agreement, mediating between the parties, conducting closings, and representing their client among other things.

3. What is the cost of real estate attorney?

A private real estate law attorney charges between $100 to $400 hourly on average whereas some charge a flat fee for their services. However, this price differs vastly from state to state and city to city.

4. Do I need a real estate attorney?

Yes, if your state requires you to appoint an estate lawyer during the course of the transaction or at closing, then you are required to hire an attorney.

5. How do I find real estate lawyers near me?

There are some basic ways to find a real estate dispute attorney, for e.g. asking your real estate agent, asking for word of mouth reference, asking your lender, or searching online on the American Bar Association's website.

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