Do you need a lawyer to buy a house? Standard real estate transactions don’t typically require the help of a real estate lawyer except in states where it’s mandated. But some real estate transactions can be complex, and although it can be pricey to hire an attorney, it also can be money well spent.
So if you’re not sure if you need an attorney or if you’re unsure your state requires a lawyer during the sales transaction process, here’s how to figure out if you need a lawyer to buy a house.
If a contract is incomplete or not done correctly, and there are four other offers with clean contracts, the one contract that comes up short could literally cost you a property.
- Matt Laricy Real Estate AgentCloseMatt Laricy Real Estate Agent at Americorp Real Estate Currently accepting new clients
- Years of Experience 21
- Transactions 4873
- Average Price Point $455k
- Condominiums 2966
Do you need a lawyer to buy a house?
In most states, you do not need a lawyer to buy a house. But in others, a lawyer is required to execute key parts of the transaction. Furthermore, some mortgage lenders may require the use of a lawyer even if it’s not required by your state!
You may need an attorney if you’re not using a real estate agent; if the property is a short sale, foreclosure or bank-owned; if you’re buying a house under a corporation, trust, or partnership umbrella; or if you’re located out of state. You may also need a lawyer if buying remotely, if there’s a tenant in the house, or if there is any non-traditional arrangement. These are times when it can be a really good idea to hire a lawyer.
If you live in one of the following states, you will need the assistance of a lawyer to buy a home. (Note that this list is subject to change as new state laws take effect, so check with your broker when buying or selling your home!)
- District of Columbia
- New Hampshire
- New Jersey
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
Matt Laricy, a top-tier real estate expert in Chicago, who sells properties more than 56% quicker than the average Chicago agent, knows what it takes to buy or sell in a competitive market. And at the start of 2022, “it is a super-competitive marketplace in most of America. If a contract is incomplete or not done correctly, and there are four other offers with clean contracts, the one contract that comes up short could literally cost you a property.”
Why hire a real estate lawyer?
A home is one of the most expensive purchases borrowers make, and there are often legal complexities to navigate.
Laricy gives an example.
“In real estate, a property lien (unpaid debt or back taxes) is more common than most buyers realize. Unfortunately, during the closing, the buyer might find out there’s a $200,000 fee to be paid.” If the lien isn’t paid off by the seller before closing, it could become the buyer’s problem.
Taxes aren’t the only area where you might see fees attached to a home’s title. Laricy adds, “We sell many condos, and there can be back assessments upwards of $200,000.”
If you don’t have a lawyer or a title company reviewing the home’s title to ensure it’s free and clear of liens, then you might find yourself liable for more money than you planned to spend!
What does a real estate lawyer do?
Real estate lawyers assist buyers and sellers during the homebuying process. Gennady Litvin, an attorney at Moshes Law Firm located in New York, says that hiring a real estate lawyer can be very helpful.
“They protect your interests when you buy or sell a property. A lawyer can handle legal issues and perform due diligence on your behalf.”
What can a real estate attorney do for a buyer, specifically?
An attorney can help ensure a smooth property transfer during the closing process.
Attorneys can represent buyers in the following ways:
- Preparing and reviewing the purchase agreement and other legal documents related to the sale
- Conducting a title review
- Making sure all title documents define the legal ownership of the property
- Reviewing any property-related issues
- Navigating any legal issues or disputes that come up during the transaction
- Handling the closing
What does an attorney do for a seller?
Real estate lawyers can help a home seller with the following:
- Preparing and reviewing the terms of the purchase agreement plus any other legal documents associated with the sale
- Ensuring all documents are correct to clear the title
- Preparing a detailed report of transaction documents and fees
- Preparing the deed
- Setting a place and time for the closing
Who does a real estate lawyer represent? Buyers, sellers, or both?
One real estate attorney can represent either the buyer or the seller during the real estate transaction process, but typically not both. That’s because lawyers are hired to protect the interest of their clients, making it difficult to represent two parties on either side of the sale. If a borrower needs a mortgage loan, then the attorney who completes the closing may not represent the buyer or seller, but instead the lender.
Real estate lawyer Jenna Zebrowski from the Law Office of Jenna Zebrowski, PLLC, advises that it’s best to contact an attorney at the beginning of the transaction.
“That way, you can get specific legal advice tailored to the transaction, not some generic and often incorrect advice. A client gets their questions answered and can learn about not just what is in the transaction, but what might be left out, and what the risks are of doing (or not doing) the transaction.”
How much does a real estate lawyer cost?
In 2020, a real estate lawyer charged between $150 and $450 per hour. That may seem like a lot of money, but Laricy contends, it’s a smart way to protect your interests and avert risk.
He adds, “You are looking at one of the largest assets you’ve ever purchased, and taking the chance there are no incumbencies or liens on the property. Why would you buy a property without some legal representative to make sure that everything’s okay?”
After all, if a significant problem is uncovered after closing, it could cost thousands of dollars more than the cost to hire a real estate lawyer to ensure your interests are protected in the first place.
What’s the best way to find a real estate lawyer?
Recommendations from your lender or real estate agent can be the best place to start when looking for a real estate lawyer.
You can also check with your local American Bar Association (ABA) chapter or do an online search in your area.
You may also rely on referrals from colleagues, friends, neighbors or family — probably the most effective way to find a real estate lawyer, especially if you know someone who’s bought a house in a similar situation and can tell you who helped them do it.
How do you hire a real estate lawyer?
You’ll want to interview several attorneys before you settle on one to hire. That way, you compare how they work, what they charge, and if they will be available when you need them.
You might also want to ask a few key questions:
- Availability: You may want to ask your lawyer how involved they will be. Will they check for all legal issues, review the contract, and protect your interest throughout the transaction as an independent third party? Or will they simply be available if you need assistance?
- Fees: It would be nice to know upfront how your lawyer charges, what the costs include, and the price range for their services.
- Real estate experience: Find out how many transactions they have performed and if they are indifferent or overbooked — or more hands-on, providing one-on-one attention throughout the process.
- State requirements: You’ll also want to be sure the lawyer you hire is well-versed in your state’s requirements
Laricy emphasizes this last point: “In states like Illinois, it is common for both the buyer and seller to have a real estate lawyer look over the purchase agreement. They are given a certain time period, called a grace period, which outlines how many days each party has to look over the agreement and propose any changes or modifications.”
The process of buying a home can be difficult to understand if you don’t have a real estate background. From the preparation of a contract to notarization of the documents, a real estate attorney ensures everything is completed by the book.
If you live in a state that requires an attorney to complete the contract or sales transaction, you don’t have a choice but to hire one. But regardless of where you live, hiring an attorney to oversee the process can still be a wise investment.
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