While many say that buying a home is one of the most significant purchases a person will ever make, people buy and sell homes all the time. Just drive down the street in your town, and you will see at least one house for sale every few blocks. So, if that many people are buying real estate, how complicated can it be, and why would you need to spend money on a real estate lawyer?
The truth of the matter is that buying a home is far more complicated than most people believe it to be. A home purchase is a complex legal transfer of property from one person or people to another. Having an experienced real estate attorney on your side will more than pay for itself and protect you from many potential pitfalls.
What is a Real Estate Attorney?
A real estate attorney has specialized knowledge of buying and selling real estate and is experienced in dealing with a myriad of issues during the transaction. However, not every attorney knows how to handle a closing or real estate purchase. An excellent real estate attorney will understand how to negotiate the contract, the impact of the inspection report, what the title reports mean, what issues to look out for, and how to best protect their clients' interests.
The Benefit of Hiring a Real Estate Attorney Who Also Litigates
While some real estate attorneys only handle property transfers, others also handle real estate litigation as well as closings. An attorney who regularly handles both traditional closings and real estate litigation can offer clients a significant benefit over someone who only handles closings. A real estate litigation attorney provides the added benefit of knowing how to keep their clients away from actions or inactions that can lead to a lawsuit.
"A home purchase is a complex legal transfer of property from one person or people to another. Having an experienced real estate attorney on your side will more than pay for itself and protect you from many potential pitfalls."
What Does a Real Estate Attorney Do?
A real estate attorney works with his or her client from the start of the buying process through the closing. An excellent real estate attorney is committed to protecting his client and helping them achieve the best possible outcome.
In New Jersey, an attorney typically gets involved with a home purchase immediately after the buyer signs the real estate contract. After you sign a New Jersey real estate contract, you have three days to have an attorney review the contract and make any changes before it becomes legally binding.
Your attorney will review the contract to make sure that it is fair and accurate and it contains the proper contingencies to allow you to cancel the contract if there are irreparable home inspection issues or if your mortgage falls through.
In most cases, your real estate attorney will send out a letter to the seller's attorney rejecting the original contract along with a rider that contains additional terms that, if added to the contract, reinstate the agreement. Once the attorney review period is over, the buyer is subject to the terms of the contract and can be sued for breach if he or she fails to satisfy the terms of the agreement. The contract review and negotiation are complicated and not something that should ever be handled without an attorney.
Beyond the contract, a real estate attorney will review the home inspection report with his clients, negotiate repairs, credits, or price reductions and in extreme situations, help a buyer cancel a contract if the seller refuses to address inspection concerns.
An attorney will also review appraisal reports, title documents, prepare use an occupancy agreements if needed, handle all communications with the seller's attorney, prepare all closing documents and accompany clients at the actual closing of the property.
What Can Happen if I Don't Hire an Attorney?
When a buyer elects not to hire a real estate attorney, he or she is exposed to a plethora of risks. For example, if there are terms and conditions either missing in the contract or added by the seller's attorney, the buyer is legally bound by them, even if they are unfavorable to him or her. For example, even the most highly educated buyer may not know that particular contractual language can prevent him from recovering his deposit if the contract is canceled or can allow the seller to immediately file a lawsuit if certain conditions are not met by the dates set forth in the agreement.
How Much Does A Real Estate Attorney Cost?
Most experienced real estate attorneys charge between $1,200 and $1,500 for the entire closing process. While most home buyers want to keep their costs down as low as possible, one area not to skimp on is their attorney. It costs tens of thousands of dollars to sue the seller or defend a lawsuit if the seller sues you compared to hiring a lawyer for the closing who can protect you from lawsuits and make the buying process as smooth as possible.
You may see "bargain" prices being advertised by some attorneys. For example, "$450 closing fee." When it comes to attorneys, you get what you pay for. An attorney who offers bargain pricing will never provide clients with the full scope of services, time, or attention they deserve.
How Can I Find an Experienced Real Estate Attorney?
There are a number of ways to find the real estate attorney who is right for you. First, you can ask your realtho they have previously worked with. You can also use Google to search for top-rated real estate attorneys near you or use AVVO to search for an attorney. No matter where you find your attorney, it is essential to spend a few minutes doing some research on him or her.
You should visit the attorney's website, look at their reviews, and see what others have to say about working with him or her. In particular, you should look to see if the attorney is a jack-of-all-trades or if he focuses on real estate along with a few other areas of law. For example, a lawyer who handles real estate transactions, litigation, contracts, and business law may be a better choice (since all those areas of practice support each other) than an attorney who handles family law, immigration, criminal law, personal injury, real estate and more. Wearing too many hats is generally not a good thing when it comes to the practice of law.
It is also a good idea to call the attorney you are thinking of hiring and speak with his or her office. Make sure that you feel comfortable with the office and attorney and that they can explain the closing process to you clearly and thoroughly.
Buying a house is stressful and complicated, but it is also a wonderful experience. Homeownership can open the doors to a whole new world and is a worthwhile investment for you and your family's future. An experienced real estate attorney can make the entire experience far more enjoyable and will protect you from lawsuits, unnecessary confusion, and loss of money.
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