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Should I hire a real estate attorney to buy or sell a home?


Whether you’re buying or selling a home, you should always have a real estate attorney on your team. Too many home buyers deem this an unnecessary fee and never realize how valuable an attorney would be until they are deep into a complicated home transaction. Attorneys give you peace of mind knowing they will take care of all the complicated moving parts throughout the process and serve as a buffer between the two parties.

In this blog, we’ll cover an in-depth list of the services real estate attorneys offer you, how the services differ between selling and buying a home, and additional advantages of having an attorney by your side during real estate transactions.

There are two types of real estate attorneys - the buyer and the seller.

  • Buyer Attorney - legal representation for the person(s) who are buying the real estate property.
  • Seller Attorney - legal representation for the person(s) who are selling their real estate property.

The services the attorneys provide differ depending on the parties they are representing. Their range of services supports you, your agent, the title company, and even your mortgage lender. We’ll break down their services into different list for the two sides of the transaction. Be ready for lengthy lists, but these are standard procedure when you’re in a real estate transaction. If some of it seems confusing, that’s another reason to have an attorney on your side. Feel free to jump through the list to find what you’re looking for.

How an attorney helps you when buying a home.

In a purchase transaction, real estate attorneys are required in the legal preparation of deeds, document drafting (such as the sales contract or purchase contract), and negotiating. Here is what the buyer’s attorney will typically do on a purchase transaction:

  • Drafting the Sales Contract/ Purchase Contract/Agreement - Your attorney prepares this document, which legally binds the buyer and seller to a sales contract. The legal document includes the general provisions, conditions, and terms related to the sale of real estate. Important dates to note are the dates of the offer, acceptance, mortgage contingency, and closing. The lender works off the dates that are on the sales contract. The attorney will review the contract after it is signed by all parties and will review the inspection once the report is received (the attorney/inspection review period).
  • Negotiate on your behalf - Let’s say the home inspection didn’t go well. The buyer and seller attorney will negotiate a seller credit for any needed repairs that the seller doesn’t want to fix prior to the closing date. If the seller doesn’t want to or can’t fix the repairs prior to closing, the attorneys will negotiate to lower the purchase price. The buyer's attorney will also limit their client's liability to the terms of the purchase agreement such as earnest money and meeting the financing contingency date. If a deal goes sideways, earnest money may or may not be returned to the buyer. Also, the buyer may be liable for damages, which means if you didn’t close you risk defaulting on the contract. If the seller now sells the property, you defaulted on for $50,000 less than what you were going to purchase, the sellers can come after you for that difference. The buyer attorney will limit and ensure that will not happen.
  • Reviewing the title and closing disclosures - At the closing, the buyer’s attorney reviews the figures on the closing disclosure to ensure they are correct (the loan amount and the seller credit for tax prorations). They will also look at the title and double check it is free and clear of all encumbrances and liens unless the lender had agreed in writing to accept indemnity or affirmative title insurance coverage over any encumbrance that will remain outstanding. The attorney will issue the title insurance subject to clear title.
  • Power of Attorney or POA Agreement - Sometimes you will not be able to make it to your closing uncontrollable circumstances - it happens! In any case, you will need a power of attorney to sign for you, and you will need an Attorney Opinion Letter and Power of Attorney Agreement.
  • Trust Attorney Opinion Letter (AOL) - If you want to close your property in a trust, you will need to supply your mortgage lender with an Attorney Opinion letter for approval. An AOL is an opinion from an attorney given in a form of a one-page letter expressing legal conclusions/analysis of the matter regarding holding title in the trust(s) solely based on the attorney’s opinion.

How a real estate attorney helps you when selling a home.

  • Drafting the Sales Contract/ Purchase Contract - It is important to note the seller attorney will provide the percent of the tax proration credit - typically either 100%, 105%, or 115%. The seller attorney investigates whether or not the reassessment of taxes has increased on the subject property and provide the title company a final number for the tax proration credit.
  • Conducting the title search - Real estate attorneys order, review, and ensure accuracy. This is a routine part of a property transaction, and the cost to conduct a title search is typically included in the price of the title insurance. Before issuing a title commitment on a property, the title agent or company conducts a detailed review of historical public records to see if there are any title concerns with the property you are looking to buy. These reports include but not limited to court judgments, deeds, mortgages, wills, divorce, tax records, and maps.
  • Deed transfer - The Warranty Deed is a state encumbrance form wherein legal title in real property is transferred to a trustee, which holds it as a security for a loan (debt) between a borrower and a lender. The equitable title remains with the borrower. The seller attorney will provide the deed.
  • Ordering the Payoff Statement - The attorney will order the Payoff Statement if there is a mortgage on the property being sold and furnish to the title company with the wiring instructions.
  • Reviewing the Paid Assessment Letter - This is a letter furnished by the condo association stating if all HOA dues have been paid or not. This will be a condition that is on the title commitment and will not be cleared off without a letter. The Paid Assessment Letter should show a zero balance to avoid any issues.
  • Ordering the Water/Zone Certificate - The attorney orders a Water or Zone Certificate depending on the state and county laws. The city of Chicago requires the seller to produce a “full payment certificate” commonly known as the Water Certificate. This certificate indicates whether or not all the utility charges and penalties that accrued to an account are paid in full. If they are not paid in full, then the certificate needs to state they are not transferable to the new owner. Certain counties will require a zoning certificate - the seller attorney will order this as well.
  • Transferring Tax Stamps - Unless exempt by statute, whenever there is a transfer of title to real property or an Assignment of Beneficial Interest (A.B.I.) in a land trust, state, county, and municipal transfer - tax stamps must first be purchased and affixed to the deed or A.B.I. before the document can be recorded. The seller attorney pays the transfer tax stamps in advance of the closing to ensure the deed is recorded.
  • Drafting of closing documents - Your attorney drafts the closing documents, which includes the Warranty Deed, bill of sale, affidavit of title, 1099’s, Alta Statement (invoice for title fees), and the seller closing disclosure.
  • Ordering the Location Survey - The seller attorney orders a Location Survey, which will show the location of the improvements on the property in relation to the boundary lines of the property. This results in a physical inspection of the property and is accurate as plus or minus a few feet. The seller is responsible for this fee unless otherwise noted on the sales contract.
  • Transferring Tax Declarations - The attorney fills out the form and file the declaration. The attorney also clears title, which means they clear all title issues related to the seller.

How much does a real estate attorney charge?

Attorneys often request a retainer fee typically in the thousand dollar range. In Chicago, the average attorney cost will range from $450-$700. The attorney fee is typically paid at the closing and will be displayed on section H of the closing disclosure.

Believe it or not - there is, even more, a real estate attorney can offer you.

Now, those were some long lists, but that only covers the main services a real estate attorney provides you during the sale or purchase of a home. There are more you should be aware of:

  • After closing, keep in touch with your attorney. If your property taxes increase from the previous year, an attorney will protest your taxes on your behalf. Most of the time if you do this without an attorney, you will not likely succeed.
  • If you are buying a foreclosure or short sale, this is a banked owned property. You will be liable for six months of past unpaid assessments and fees. You could have an immediate lien on day one of owning your new property. Attorneys will look at this on your behalf and take care of it for you.
  • If you are buying a home that has past due taxes, the county can come after the buyer of the home. The attorneys are skilled at looking for this in the purchase transaction and ensure the issue is resolved prior to close.
  • The buyer’s attorney will ensure there aren’t any special assessments by looking at the minutes of the condo association as well as looking at the health of the association.
  • For Sale By Owner (FSBO) realtors will draft the contract and the attorney will review.

Save yourself a major headache, get a real estate attorney.

There is a reason why the attorney’s list of services for both sides are long and lengthy. Purchase and sales transactions require a specific area of expertise in order to go smoothly. Leave it to the experts who do this for a living. For a small fee, they will have your best interests in mind and save you unnecessary stress that will lead to a faster closing.

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