If you plan to ever own, inherit, or invest in real estate, there's a good chance you will eventually need the services of a real estate attorney. But you may be wondering, what exactly does a real estate attorney do? This article will cover the various duties and responsibilities of a real estate attorney to help you understand exactly what they do and when you might want or need to hire one in a real estate transaction.
What is a real estate attorney?
A real estate attorney is a licensed professional who specializes in the field of real estate law and can provide legal advice, represent the interests and rights of one or more parties in a property transaction, and facilitate or assist with a real estate transaction. In a real estate transaction, it's relatively common for both the home buyer and seller to hire a lawyer to represent their interests during the sale. Real estate attorneys not only provide guidance to their clients during the transaction process, but can also produce contracts, conduct closings, handle the deed transfer, and much more.
In 21 states and D.C., a real estate lawyer is required to facilitate and be present at a real estate closing, including:
- District of Columbia
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
This means if you plan to buy or sell real estate in these states, you'll need to hire a real estate attorney.
What does a real estate attorney do?
Like other lawyers in the law field, most real estate attorneys will specialize in a specific field within the general practice of real estate law. For example, a commercial real estate attorney will offer services in the commercial real estate industry, while another may specialize in a residential real estate transaction. A real estate closing attorney can help with all types of real estate closings and may even have a title company attached to their law firm. Meanwhile, an estate attorney can help you deal with a property that's been inherited or plan for your own estate.
The various specialties an attorney may have mean what the attorney does can vary based on their firm and area of expertise. In general, it's a good idea to seek professional help or legal advice from an attorney in the type of real estate property you're dealing with.
The responsibilities and duties typically remain the same, regardless of the specialty practiced, although there may be some small variances in the legal responsibilities of the attorney from state to state. Generally speaking, a real estate attorney can offer legal services such as:
- Preparing a purchase contract, loan documents, closing documents such as a settlement statement, or other legal documents relating to the property.
- Collecting and distributing escrow.
- Conducting a real estate closing.
- Reviewing legal real estate documents for discrepancies, errors, accuracy, or to identify rights and obligations of the contract.
- Helping to release a lien or rectify a title issue or legal issue.
- Facilitating a foreclosure or short sale on behalf of the lender.
- Transferring a deed when a property is inherited or sold.
- Preparing loan documents for a mortgage loan.
When do you need to hire a real estate attorney?
If you're conducting a real estate transaction in one of the states that require a real estate attorney by law, you will need to hire an attorney prior to purchasing the property. However, there are many other instances in which you may need a lawyer as a real estate investor long before you actually purchase a property. If you plan to create an LLC or corporation to conduct your real estate business, a real estate attorney who specializes in contract law can help draft the necessary documents for you. Additionally, if you need help with any of the legal services listed above, that might be a good indication it's time to hire a real estate attorney.
What does a real estate attorney cost?
The fees for a real estate attorney will vary by service, state, and expertise. Attorneys usually charge an hourly rate, which can range from $150 to $350 or more per hour, with a basic real estate closing costing anywhere between $1,500 and $3,500 for a residential transaction.
There are a number of factors that could lead to an increase in cost for an attorney's services, including the size and cost of the transaction or issue at hand, so keep in mind the more expertise is required by the attorney and the more time it takes to resolve the issue or complete the task at hand, the more you should expect it to cost.
When you first meet with the attorney, explain what you're looking for and ask for a quote for the general cost. The attorney should be able to estimate the total cost and explain if you need to place money into a reserve or retainer with the firm in order to begin.
The Millionacres bottom line
If you plan to actively participate or invest in real estate, it's a good idea to make the effort now to find a good real estate attorney. Speak with other professionals, colleagues, and investors in your area and ask for recommendations. The internet can also be a great place to start searching for attorneys.
Speak with each attorney, asking for references from past clients, reading reviews online, and visiting their office. Interview the attorney and make sure they seem competent, professional, and able to address your problem at hand before hiring.