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Taking the leap to sell a home can be daunting in any circumstance, but when you’re working with a cash sale, it can be even more challenging. Knowing how to choose a real estate attorney for a transaction will give you peace of mind and make the whole process much easier.
Where does a real estate attorney fit into the process?
A real estate lawyer is part of the wider process of buying a home. They fit in at the close of the process, when the real estate transaction takes place. Their fees are usually folded into that nebulous idea of “closing costs”, the catchall that includes everything from the home inspection to the title company to the notary fees.
The real estate attorney can facilitate a positive experience and make it a smooth one. Their services offer the added benefit of helping the average person understand the closing process and all of the legal jargon associated with the final sale of the home.
Hiring a real estate lawyer is really about doing that due diligence that will make sure of all the necessary paperwork. The right attorney that’s been licensed by the state’s bar association will know all of the ins and outs of the process and be able to make sure that everything is in order.
Are you required to hire a real estate attorney?
Not every state requires that a real estate attorney be part of the process, but some places do. It’s important to check the laws in the place that you live to make sure that you’re following the specific requirements.
You can search for a listing of your state’s particular requirements, but such a list of the 22 states that mandate a properly licensed law firm to handle the closing is below.
- District of Columbia
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
Even if you don’t live in a state that needs an attorney to represent someone in a real estate transaction, you should still consider at least consulting with one during the closing process.
What is a closing attorney?
A closing attorney is a licensed attorney who specializes in transactions involving property.
This kind of attorney will look over everything that is part of the property transaction and explain all of the paperwork that both the buyer and the seller sign. They can make sure that all of the documents are not only accurate, but that they are also understood by both parties.
With some real estate transactions, there are specific issues that come up. This is especially true in complex real estate transactions, like those that involve inherited property or probate. It’s vitally important that everyone in a transaction knows what problems might arise and what issues to be prepared for, and a real estate attorney is the best option to make that determination.
How much will a real estate attorney cost?
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A lawyer who is a member of your state’s bar association will bring their many resources to bear on your property transaction, but that won’t come without a cost.
A good real estate attorney will charge somewhere between $150-$300 as an hourly rate for their services. This will include the time that they spend with you on the phone, as well as their fee for showing up to the final transaction at the closing table.
If it’s a standard real estate transaction, attorneys offer an all in prices that includes everything. You can expect to pay attorney’s fees of anywhere from $300-$2,000 depending whether you need a real estate support attorney who is new or highly experienced. The amount of the fee will also have to do with how much time the attorney will have to put into the transaction and what other requirements are part of the deal.
Upfront pricing vs. “blank check” pricing
There are lots of attorneys out there who work specifically with home buyers and sellers at closing only. They are able to do everything necessary, and an experienced real estate attorney will be able to get this done quickly.
You are the one in charge of the process, even if you’re working with an experienced attorney. There are lots of people who have practiced real estate law for a long time, and you should find one who works with you on your terms.
Sometimes an attorney will tell you that they want to charge you by the hour with a “blank check” model that lets them do the work for as many hours as they need to, then charge you when they practice law for your transaction after it’s all over.
In general, a reputable real estate attorney is going to give you a solid quote ahead of time either for a flat fee or for a specific number of hours at their hourly rate. You should have a good idea about what the estate attorney will charge you before you get done.
With cash closings, a particular attorney should tell you exactly what your final charge will be. Always make sure you get any quote in writing rather than trusting that it will all turn out alright.
How is a cash closing different from a traditional real estate sale?
A cash closing requires different real estate documents than a traditional real estate sale that’s done with a bank. The law in every state provides different requirements, like a home inspection or a buyer to have an appraisal done.
Lawyers who specialize in this kind of real estate will be able to tell their clients whether the cash sale needs other items to be done. Often, proof of funds isn’t even technically required for a real estate transaction, but it’s always a good idea.
The specific services surrounding the purchase contract and the closing documents are different for each state. Attorneys can help you know what exactly you need to do and which documents the state mandates.
Does a real estate attorney replace the real estate agent?
Any attorney will work in the best interest of the client to make the real estate transaction go through. The right lawyer will be able to do everything required by the bar association of your state.
In most states, you don’t have to have a real estate agent present in order to complete a real estate transaction. It has everything to do with what the laws are in your area. A real estate agent can help you do things like prepare the contract, but keep in mind that anyone can prepare a contract and then present it to be amended by an attorney.
In different states, attorneys are required for some of the tasks. For example, in some states a real estate attorney must prepare the documents for a home purchase, close the deal, and perform a title search. They aren’t necessarily required for personal loans or dealing with title insurance.
An attorney will be able to tell you what they can do in the initial consultation.
Where do contracts come from in real estate?
Contracts for anything dealing with the law can be found online, but these are only a starting place. Attorneys can provide reviews of these law documents as part of their services. Though resources exist online, these can’t be the primary way that you get to the end of the selling process.
An investor who regularly does real estate transactions will likely have their own home purchase contracts that they’ll present to you if you are working on a cash real estate deal. It’s always a good idea to have a lawyer who is recognized by the state bar look over these documents before you sign them.
Why you should still take an active role with a real estate attorney
Though a real estate attorney will be able to help you make sense of the process of buying a house for cash, you still need to take an active role in the homebuying process.
Look through the requirements of your state’s real estate law documents before you get to the real estate attorney. Real estate agents can sometimes help you make sense of some of the jargon, but real estate agents have their limitations as well.
Real estate law can be complex, and there are lots of things to think about in terms of the final transaction. A good real estate attorney will explain everything to you and will support your own investigation.
Take your time, even if you need a quick turnaround
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Even if you are working on a cash real estate deal that needs a fast turnaround, do your due diligence.
Real estate lawyers should be able to answer all of your questions, and you’re smart to slow down and make sure that you know everything that you’re signing before you sign in. When attorneys are doing a home search, they should do it thoroughly and they should support your needs throughout the transaction.
Hiring a real estate attorney is good for the buyer and for the seller, even in a cash closing. Clients who work with experienced lawyers can feel confident that everything is taken care of legally and in their best interest at the closing table.