When To Get A Lawyer When Buying A House

When To Get A Lawyer When Buying A House

When buying a house, having experts on your side helps, and a real estate agent is likely the first one to have in your camp. However, regardless of how experienced they may be, a real estate agent cannot offer you legal advice.

It is here that the real estate lawyer comes in. It may not be mandatory to have one when purchasing your house, but they'll definitely make the home buying process a smooth experience. They'll help you avoid problems along the way, before, during, and after closing the deal.

When To Get A Lawyer When Buying A House

When to Get a Lawyer

You might need to enlist a real estate lawyer's services, depending on your location, the nature of your transaction, and the laws of the state.

Regardless of whether you end up needing one due to the state requirements or out of your own will, there are several points in your home buying process where a lawyer comes in to offer assistance. Such circumstances include finalizing purchase contracts, making amendments to a real estate agent's standard contract, conducting a title search, or closing the deal.

Below are a few reasons you might want to get a lawyer as part of your team in the home buying process;

Lender Or State Requirement

Different states have different laws to govern real estate transactions, and some consider certain steps in the process as practicing law. Such regulations help prevent real estate agents from performing legal functions for which they aren't licensed or trained.

For example, in many locations, only a licensed lawyer can prepare legal paperwork regarding the sale of a house because it is within the scope of legal activity. However, real estate agents in some areas are now using standardized form contracts for property acquisitions that non-lawyers can lawfully fill out on their own.

Other states may consider conducting a home closing practice of law, hence requiring the presence of a lawyer during the closing. If the house you intend to buy is located in any of the following areas, you'll need a lawyer!

  • Delaware
  • Connecticut
  • Massachusetts
  • Georgia
  • New York
  • West Virginia
  • South Carolina

Contractual Issues

A professional real estate attorney can ensure that your contract considers the intricacy of your case and assist you if contractual concerns develop during the process. This is if your house purchase incorporates any unusual factors affecting your purchase contract.

Some of these issues include but are not limited to:

  • Buying a house in a different state.
  • Buying a short-sale, foreclosed, or estate-sale home.
  • Planning to run a home-based enterprise, rent it out for a short period, or use it in a way that would contravene zoning laws.
  • Purchasing a home that has environmental problems, such as mold or radon.
  • Buying a house without the help of a real estate agent.

For Your Peace of Mind

They say not to ignore your gut feeling, which applies everywhere, including during a home-buying process. If you want all your bases well covered or have the slightest feeling that something could go wrong, having a lawyer on board will be very beneficial.

It helps you move with confidence that even if the deal goes left, there is someone with your best interest at heart and will help you work out any tricky situation.

When To Get A Lawyer When Buying A House

What Does a Real Estate Lawyer Do?

A real estate lawyer works with sellers, buyers, and lenders to ensure that their client's interests are protected during the home buying process.

Fees vary depending on the party the attorney serves, the intricacy of the transaction, and the property's value. However, plan to spend between $150 and $350 per hour.

Some attorneys charge a flat fee that ranges from $1,000 to a few thousand dollars, based on whether they also handle deed preparation and title work.

When a lawyer represents a buyer, they conduct the following tasks:

Contract Negotiations for Purchase

The most important document in the home-buying process is the purchase agreement. While standard printed papers are helpful, your lawyer clarifies the documents and implements changes and additions to match your wishes. Several issues should be addressed in a good purchase agreement, including:

  • Whether the law was observed if there are any changes or additions on the property.
  • Whether the buyer can legally make a change to the house.
  • What to do if a home inspector finds issues like termites, radon, lead-based paint, or asbestos on the property.
  • How to address any problems of hazardous waste on the property is spotted.
  • The legal outcome in case the deal doesn't go through and the fate of the down payment made.
  • The method used to make the payment.
  • Is the buyer's ability to secure finance a condition of the sale?

Most buyers use a mortgage loan from a financial institution to fund a significant amount of the buying price. A good purchase agreement should include a carefully drafted clause, subject to obtaining a financing commitment.

Title Searches

After establishing and signing a purchase agreement, finding out the state of your seller's title is vital for the sake of your satisfaction and that of your financial lender. Title searches are generally orders from a title or abstract insurance company.

Title insurance in some states is not common; hence, a lawyer needs to review its status and offer an opinion on the title. If title insurance is standard in your location, an attorney will help review the title search and explain the exceptions in the title concerning what's uninsured. They'll also check if the legal description is accurate and any issues with neighboring or previous owners.

Furthermore, a lawyer can explain the impact of agreements, easements, or restrictions placed by a previous owner, including whether any legal constraints that will prevent you from selling the property exist.

The title search provides no information about current or future zoning to the buyer or seller. A lawyer can clarify whether zoning precludes the construction of a two-family home or whether proposed improvements violate zoning ordinances.

When To Get A Lawyer When Buying A House

Closing

An essential event in a buying and selling transaction is the closing. It is necessary to prepare the deed and other closing documents for the process to run smoothly. The seller transfers title to the buyer at the closing, and the buyer pays the balance of the purchase cost. The mortgage loan proceeds often go to completing this sum.

Before the closing, you need to prepare a closing statement outlining the debits and credits to the buyer and seller. In this case, an attorney can assist in describing the nature, quantity, and appropriateness of closing charges.

The attorney's function in the closing process is determined by the client they represent. Usually, a closing lawyer represents your lender unless you contract one to represent you at closing.

The following are the obligations of the closing attorney:

  • Organize the preparation and distribution of required documentation.
  • Creating the closing statement, which details how the monies are divided.
  • Disbursement of funds.

Your lawyer will go over the documentation you'll be signing with you and address any last-minute concerns you might have concerning the transaction.

They'll also work out a solution if there's a snag in the process, such as difficulty obtaining bank funding or the seller failing to make essential repairs.

Filing Paperwork

The closing lawyer files your deed, plus possibly your mortgage, with the records office in the area where you purchased your house after closing. This is known as recording, and it makes your mortgage and deed part of the public records.

This way, they can be reviewed by anyone who is probably interested in the property and is found in any future title searches. The recording process also ensures that your claim to the property is protected.

Handling Discrimination

Lawyers can undoubtedly assist you if you are discriminated against during the house purchase process. Even if most real estate attorneys do not specialize in that field, they are likely to know someone who does.

However, don't be fooled into believing that responding to discrimination requires a large sum of money or contracting a high-priced legal lineup. Laws exist to shield everybody, regardless of their financial situation.

Remember, discrimination in mortgage lending is against the law. There are actions you can take if you believe you've been discriminated against because of your color, sex, religion, use of public assistance, marital status, national origin, age, or disability.

When To Get A Lawyer When Buying A House

How Much Does A Lawyer Cost?

The amount you pay your legal representative depends on the services they deliver and the party accountable for the closing costs. If your mortgage lender needs an attorney available at closing, whether the seller or you, the buyer, pays for the attorney will be determined by the terms of your real estate contract.

If you choose to have your lawyer besides the one required by your lender, you will be charged for any services provided. Some hourly charge fees, usually ranging between $150 to $500. A flat-rate fee may also come up for a specific service provided.

Their fees could depend on the property's sale price and their experience. Go with your budget but keep in mind that cheap is expensive!

When To Get A Lawyer When Buying A House

How to Find A Real Estate Attorney

We cannot underestimate the significance of a home purchase to anyone. Therefore, being such a huge step, you want to be sure that the professionals you work with are good at their job and understand the process.

If you are wondering where to start in finding a reliable lawyer, here are some places to look;

Family and Friends Reviews

If someone you know could be a friend or relative, recently bought a house, and engaged an attorney, you might want to inquire about who they used and how their experience went.

The State's Bar Association Directory

The website of your state Bar organization can assist you in finding real estate lawyers in your area. To discover your state's website, use the American Bar Association's directory.

Online Appraisals

Numerous websites on the internet will provide you with information about local attorneys, including their specialty, pricing plans, and any evaluations written by previous customers.

Buying a house can be intimidating, and a bit confusing, which is why educating yourself with the various aspects of this process is vital. If you are unsure of the legal implications in the area where you want to buy a home, we highly recommend having a lawyer in your corner.

mike

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