Our firm practices real estate law and we hear this question frequently.
A title company can prepare some of the same documents a s a lawyer would. However, only a lawyer can give you legal advice and advocate on your behalf. Your attorney can spot issues and solve problems.
But if my real estate transaction is simple or standard, why would I even need legal advice? There are no “simple” or “standard” real estate transactions. Every real estate transaction presents unique circumstances and problems may arise, frequently having to do with the title of the property. For example, we sometimes find a legal description which misstates the dimensions of the property, or contains a wrong number in the plat recitation.
A title defect can also occur due to a forged or fraudulent deed, a lien on the property resulting from a judgment against a current or prior owner, a break in the ownership history of the property, missing marital status information on a deed, or missing heir or estate information. Foreclosure issues can also cloud title to a property. Once a title defect is discovered, the property likely cannot be sold or transferred until that defect is resolved and the title is cleared.
With the help of an experienced real estate attorney, a title defect can often be cured expeditiously and in a manner that will cure the problem forever. Furthermore, an attorney who represents your interests can advise you whether the defect is such that it would not be in your best interest to close. An experienced real estate attorney is better equipped to handle title problems than a title company representative with no formal legal training.
Another common issue may occur after the inspection when the parties might disagree over whether an appliance or the air conditioning unit is properly functioning or needs to be replaced. Yet another example arises when there is an open permit – such situations are not uncommon, but can be very stressful if you do not have an attorney advocating on your behalf.
But I have a realtor who represents me and will handle everything for me. Your realtor may be able to act as a middle-man in resolving inspection issues, but an experienced real estate attorney is in a better position to assist you. Your attorney represents you and your interests and will advocate for you when handling inspection or title issues, whereas a real estate agent represents the transaction. Your realtor’s interest and your interest may not coincide.
An open permit, like a title defect, can affect the future marketability of your property. It is possible that a significant amount of time and money will be needed in order to close the permit. You will want such issues to be handled prior to closing and paid for by your seller. Some title companies do not even order a lien search unless pushed, and they do not typically seek to resolve any lien issues. Our law firm will not close a purchase transaction without ordering this information and ensuring that marketable title is being transferred.
So, do I really need a real estate attorney if I don’t expect any title issues? Yes, not only will a real estate attorney be able to give advice and assist if a problem arises during the course of a real estate transaction, but your attorney can represent your interests in the transaction from start to finish. Your attorney will be able to prepare any non-standard documents that may be required and is able to explain all of the documents that are signed during the transaction, such as the mortgage, note, and title documents. Your attorney will work with the realtors to answer any legal questions that arise during the transaction, and can advise as to the most efficient ways to resolve any issues.
Everyone should use a real estate attorney when purchasing a property. It’s a large investment, protect it from day one.