What Does a Real Estate Attorney Do?

Real estate attorneys (also known as real estate lawyers) specialize in matters related to property, from transactions and title transfers to the handling of disputes between parties. In addition to hiring a real estate agent to help negotiate the transaction, you might consider a real estate attorney to guide you through the transaction’s legal process of buying property.

Real Estate Attorneys: An Overview

A real estate attorney is a lawyer who is licensed to practice real estate law. As such, they possess extensive knowledge of different real estate issues and legalities. As your representative, they can help ensure that a property transaction that you’re a party to runs smoothly. Many states in the U.S. require that a real estate attorney be present at the closing of the purchase or sale of real estate.1

Property buyers and owners may desire their assistance for a variety of issues, such as:

  • Title searches
  • Deed transfers
  • Home inspection report reviews
  • Price negotiations
  • Drafting a contract
  • Reviewing and interpreting a contract drafted by others
  • Representation at closing
  • Legal rights of buyers and owners

Even if your state does not require one, you might want a real estate attorney to be there to represent your interests. Most real estate lawyers charge an hourly fee for services, although some charge a flat rate. We’ll cover more about how real estate attorney’s bill later in this article.

Qualifications

A real estate lawyer has earned a law degree, which typically takes three years of study for a full-time student. They have also passed the state bar exam administered by the state in which they practice. Training for real estate law may begin with elective courses and internships during law school, and may continue afterward with a certification in real estate law.

The Attorney’s Responsibilities

Generally speaking, a real estate attorney’s responsibilities will vary from transaction to transaction. Below is a short list of what a real estate attorney will likely do in any general, standard sale.

  • A real estate attorney can prepare and review documents relating to purchase agreements, mortgage documents, title documents, and transfer documents. They will review all paperwork in advance and advise on any problems or omissions with the documentation.
  • A real estate attorney hired to handle a transaction will always attend the closing with the buyer. A closing is the event where money is paid and the title is transferred. The attorney is there to ensure that the transfer is legal, binding, and in the best interests of the client.
  • During the purchase of a property, the real estate attorney and staff might write title insurance policies, complete title searches on the property, and handle the transfer of funds for the purchase. If the purchase is being financed, the attorney is responsible for paperwork such as the federal HUD-1 Form and related transfer of funds documentation for the buyer’s lender.
  • In the case of a real estate dispute, such as chain of title, lot line problems, or other issues involving contracts, the attorney will resolve the problem.
  • A real estate attorney may also provide legal representation for either a buyer or a seller when a dispute winds up in a courtroom. The real estate attorney obtains facts from both sides of the dispute and tries to bring them to a resolution. This may mean hiring a surveyor or title company to work through the details.
  • Real estate attorneys must be licensed to practice in the state where a transaction with which they’re involved is taking place, and must stay abreast of any state or local developments that could impact a transaction.2

Benefits of Hiring a Real Estate Attorney

There’s a number of reasons why you should consider hiring a real estate attorney, including but not limited to:

  • Expertise: A real estate attorney can provide the in-depth expertise to efficiently and effectively bring your real estate transaction to a successful completion.
  • Experience: They can offer valuable experience that protects your interests during negotiations and when sealing the deal.
  • Knowledge: They understand the legalities of real estate issues such as contracts and amendments to contracts.
  • Ideas: A real estate attorney with informed experience and cumulative knowledge can offer alternative solutions to the problems that you may face.
  • Guidance: They will provide the guidance you require to understand and complete complicated and important transactions with confidence.
  • Representation: A real estate attorney can represent you when you feel ill-equipped to handle a transaction on your own. This can mean less stress, less effort, and more confidence for you.

What Real Estate Law Covers

Real estate law encompasses the purchase and sale of real property, meaning land and any structures on it. It also covers legal issues related to anything attached to the property or structures, such as appliances and fixtures.

Lawyers who specialize in real estate ensure that proper procedures are followed during the acquisition or sale of property. Real estate law covers deeds, property taxes, estate planning, zoning, and titles. Real estate laws also vary by state and local government.

When Do You Need a Real Estate Attorney?

You may decide that you need a real estate attorney for a property matter in which you’re involved because you recognize the value of relevant professional expertise, experience, knowledge, and representation. You may want such help because a significant financial investment is at stake. But that’s up to you.

As noted, certain U.S. states actually require that a real estate attorney be present to oversee a closing. Some may require that the attorney be involved in the entire closing process while others may require only that they prepare closing documents.

The list of such states changes along with state laws. So be sure that you check the real estate law in your state to determine if you must hire a real estate lawyer and for which specific purpose.

How Real Estate Attorneys Bill

There’s a few different ways a real estate attorney can bill. Be mindful that your agreement may include some combination of these types of payments below:

  • Hourly Rates: Hourly billing is one of the most common methods used by real estate attorneys. The attorney charges an agreed-upon rate for each hour spent working on the client’s case. The hourly rate can vary widely based on factors such as the attorney’s level of experience, the complexity of the legal matter, and the geographic location of where the deal is happening.
  • Flat Fees: Flat fees provide clients with a clear understanding of the cost of specific legal services upfront. Real estate attorneys may offer flat fees for services such as drafting contracts, reviewing documents, or representing clients at a closing. Note that attorneys may only offer flat fees for services where the scope of the task is clearly defined.
  • Contingency Fees: In certain cases, such as real estate litigation or property disputes, attorneys may agree to work on a contingency fee basis. With contingency fees, the attorney’s payment is contingent upon achieving a successful outcome for the client. For example, the attorney will only be paid if they win the case or negotiate a favorable settlement. If the attorney succeeds, they receive a percentage of the amount recovered on behalf of the client. If the case is unsuccessful, the attorney does not receive payment for their services.
  • Retainers: Real estate attorneys may require clients to pay a retainer fee upfront before commencing work on their case. The retainer is typically deposited into a trust account and serves as a prepayment for legal services. As the attorney performs work on behalf of the client, fees are deducted from the retainer. Clients may be asked to replenish the retainer if it becomes depleted.
  • Hybrid Billing Arrangements: As mentioned above, some real estate attorneys offer hybrid billing arrangements that combine elements of these different fee structures. For example, an attorney may charge a reduced hourly rate combined with a contingency fee based on the outcome of the case.
  • Expenses and Disbursements: Last, in addition to legal fees, clients may be responsible for reimbursing the attorney for any out-of-pocket expenses incurred during the representation. These expenses may include filing fees, court costs, travel expenses, document retrieval fees, and other disbursements related to the case.

Real Estate Attorney vs. Real Estate Agent

Real estate agents and real estate attorneys both play distinct roles in the process of buying or selling property. However, they are different and often handle various parts of the real estate transaction.

Real estate agents are licensed professionals who represent buyers or sellers in real estate transactions. Their primary responsibilities include helping clients find suitable properties, marketing properties for sale, negotiating offers and counteroffers, and guiding clients through the purchase or sale process. On the other hand, real estate attorneys are legal professionals who specialize in real estate law. Their role is to provide legal advice and guidance to clients involved in real estate transactions (as discussed throughout this entire article).

Real estate agents focus primarily on the practical aspects of buying and selling property, whereas real estate attorneys specialize in the legal aspects of the real estate transactions. While a real estate agent is more concerned about market trends and local valuations, a real estate lawyer is more interested in regulations and applicable laws to protect certain party interests.

It’s common for real estate agents and attorneys to work together closely during transactions. Real estate agents may refer clients to attorneys for legal advice or assistance with complex tax issues that arise for properties their clients are interested in. On the other side, real estate attorneys may rely on agents to provide insights into market conditions and property values that may dictate changes to future legislation.

What Will a Real Estate Attorney Do for Me?

That depends on the transaction you have and the services required. For a home purchase, a real estate attorney can negotiate on your behalf, draft a contract, review and explain all important documents, including a contract prepared by the seller, and represent you at the closing.

Why Hire a Real Estate Attorney?

People hire real estate attorneys for various reasons related to the type of property issue and the money involved. But broadly speaking, when you hire a real estate attorney to represent you, say, in a house purchase, you will receive legal guidance and other services that you may need. You may have no knowledge of how to buy a house, your legal rights and obligations, or potential legal liabilities that you could encounter. A legal pro can help protect your interests before, during, and after a transaction.

How Do I Find a Real Estate Lawyer?

You might start by going online and searching for real estate lawyers in your area. Research their education and experience. Make sure they’re licensed to practice. Read available reviews for potential insight. Ask your family, friends, and neighbors whether they can recommend one. Consult your state’s bar association for a list of practicing attorneys. Contact a few to interview them and follow up with any who may fit your particular need.

The Bottom Line

A real estate attorney is a lawyer with extensive knowledge of real estate law and expertise in representing clients in real estate transactions.

Unless you live in a U.S. state that requires you to hire one, it’s up to you whether or not to retain one. Hiring a real estate attorney may depend on the confidence you have in your own knowledge of the ins and outs of real estate law.

A real estate attorney is certainly worth considering if you lack the experience to handle a basic property purchase yourself and prefer to be represented by a legal expert. Moreover, if you’re facing a particularly murky or complex situation like a foreclosure or a short sale, a real estate attorney may be just what is called for

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