In today’s world, the purchase or sale of a home requires the assistance of several professionals. These include:
- Home appraisers who come up with a market-based valuation of a home
- Real estate brokers who handle negotiating the price of the deal
- Title insurance companies verify that the person selling the home owns it
Traditionally, an attorney was responsible for those tasks and more:
- They were in charge of negotiating both the asking price and the final sale price of a home
- They negotiated with the lender as to the types of financing options that a buyer could use to purchase a home
- They were required to approve the title documents, which included investigating to make sure that both the title and the deed to a home were legally valid.
- Attorneys also often advised the seller and buyer about specific zoning and real property tax laws that governed the area where a particular property was located. For instance, if the rate of real property taxes were increasing within the next year, the attorney would inform the parties since it could affect the buyer’s decision to purchase the home in question.
- In addition, an attorney was responsible for overseeing the closing. The closing is the last stage in the purchase and sale of a home.
- Attorneys were also used to resolve any disputes that arose between the purchaser and seller.
Although some of these tasks are very similar to the ones that attorneys might do today, a good portion of them have been delegated to other parties, such as those mentioned at the beginning of this article.
Furthermore, some attorneys today may even focus on a particular field of real property law. For example, instead of advising on laws for zoning and real property taxes, an attorney may now only focus on one or the other since these are very different complex areas of law.
What is the Role of an Attorney in the Purchase and Sale of a Home Today?
Real estate attorneys know how to, and are legally authorized to, prepare and review documents and contracts related to the sale and purchase of a home. In some cases, a real estate attorney is also the person who’ll be in charge of the closing.
In a home purchase transaction, both the buyer and seller can hire an attorney to represent their interests during the process. Or, in the case where an attorney is overseeing a closing where the home is being purchased with a mortgage loan, the attorney may represent the mortgage lender or title company.
Today, an attorney can and still might carry out many of the tasks that they were formerly required to do during the purchase and sale of a home.
Furthermore, some issues might come up that necessitate the use of an attorney. For instance, if a buyer backs out of the purchase-sale agreement, then the seller may want to sue the buyer for breaching the agreement and to recover monetary damages. The parties will both need to hire their own attorneys to represent them in any settlement negotiations and court on the matter if that becomes necessary.
An attorney can also be helpful in situations where a title insurance company, escrow agent, or real estate broker does something that goes beyond what is required of their role in the process of the purchase and sale of a home. For example, if a real estate broker drafts the contract for the purchase and sale of a home, as opposed to filling in the blanks of a contract that an attorney drafted, then they might violate practicing law without the proper credentials.
It should be noted that real estate agents are not allowed to provide legal advice. This means that they cannot answer any legal questions about the property without violating the law, even if they know the right answer. If a real estate agent does offer legal advice or draft a contract that an attorney does not approve, then they could stand to lose their real estate license.
So, while a real estate agent may give information about a particular property and the surrounding neighborhood, it is always best to have a lawyer to answer any legal questions. This prevents the real estate agent from getting in trouble and ensures that the parties will have all of their questions answered by the time of the closing.
Although title insurance companies exist, the parties should always have a real estate attorney look over their paperwork. For instance, a real estate attorney should be in charge of reviewing mortgage loan documents, title and homeowner’s insurance policies, and the title documents to a home (e.g., the title and the deed). This ensures that this paperwork is valid and that there will not be any issues before, during, or after the closing.
In addition, the parties should use an attorney when they need to finalize any agreements or if they need to back out of a contract connected to the property. A real estate attorney not only knows and understands the rules related to these types of documents but also can provide legal representation if an issue with the contract leads to a lawsuit.
Also, if there is an issue of fraud concerning a real estate agent, a home listing, or some of the sales paperwork, then a modern-day attorney can assist with resolving the issue and making sure the party who was deceived receives monetary damages for any losses the party suffered due to the fraud.
As a general rule of thumb, the more complex a home purchase and sale agreement is, the more likely the parties will need to hire attorneys to resolve issues or handle legal matters that may arise before the closing.
Do I Need an Attorney for the Purchase and Sale of a Home?
As is evident from the above discussion, the purchase and sale of a home can be a very complicated process. It involves many legal regulations, which, if not complied with, can result in serious negative consequences. The purchase and sale of a home also requires knowledge of various complex real estate laws, detailed procedural requirements, and solid negotiating and drafting skills.
If you are in the process of buying or selling a home, then it may well be in your best interest to hire a local real estate attorney for assistance. An experienced real estate attorney can explain what you must do as a buyer or a seller of a home. Your lawyer can also discuss what rights and protections you have under the law.
In addition, a real estate attorney can help negotiate the price of a home and can handle any disputes that may arise before the final transaction. Also, should you need to appear in court or file a lawsuit against the other party, your attorney can assist you with the appropriate process and provide legal representation.
