While hiring an attorney for a real estate transaction is not a requirement, I strongly advise anyone purchasing or selling real estate to consult an attorney. When everything goes right, it is true lawyer’s fees may feel like wasted money. But, when something goes wrong, you will be grateful to have an experienced attorney by your side. An attorney’s expertise can avoid and/or resolve issues that come up during the home buying process. The average homebuyer cannot be expected to understand all the intricacies of a real estate transaction and cannot know how to respond to all the possible issues that arise. Here are five major reasons that you need to consult an attorney when buying a home.
- The cost of hiring an attorney is a small additional cost for one of the largest transactions you will make in your life. In most cases, the cost of working with a lawyer is relatively insignificant compared to the price of the home you are either selling or purchasing. When making a purchase as large as a home, experts advise against cutting corners by not hiring an attorney. “’You’re signing the largest check you’ve ever signed,” said Gary L. Malin, the president of the brokerage Citi Habitats, “and you want to make sure that you’re not missing something. To not engage an attorney — you’d feel naked in the process.’” September 29, 2011.
- While transactions sometimes go off without a hitch, you will be thankful for your attorney, should anything go wrong. Real estate transactions are complicated and anyone who has purchased a home can tell you there are a number of issues that could arise. “When things go badly and a lawyer is not representing the parties, they seem to go real badly”. December 20, 2006. The money that is spent resolving issues when they come up is usually a much larger cost than it would have been to hire an attorney in the first place.
- Attorneys can help prevent issues or stop them from growing. One of the biggest benefits you get when you hire an attorney is their experience. They are familiar with the whole process and can help take you through it avoiding common pitfalls and resolving issues before they become truly detrimental to the sale. Condominium or Coop purchases their own unique issues. “[A]n experienced lawyer is also easily able to spot in the board’s minutes any issues that may percolate into problems… Because experienced real estate lawyers see a lot of contracts and know the customs, they can also help cut through roadblocks” September 29, 2011. An attorney’s ability to recognize issues early on and knowledge of how to properly solve said issues can save you a significant amount of time and money, often more than the attorney’s fee.
- Real estate attorneys clarify the terms of an otherwise, very complicated transaction. Real estate attorneys are experts in real estate law. The average homebuyer is not expected to comprehend every aspect of real estate law; however, it is crucial to understand the terms of the purchase of your home. A lawyer enables you to have a true understanding of the contract you are signing.
- Hiring a lawyer gives you insurance for the future. If you are contemplating a short sale, or a deed in lieu of foreclosure to a bank, doing so without an attorney can have grave consequences. Even if a bank permits a short sale, Seller might have personal liability for the balance between the mortgage and the final sales price. If the debt is forgiven, there is the potential for liability on the forgiven debt. An attorney can offer you the information and assurances you need. “Banks examine a seller’s bank accounts, tax returns and have been known to pull a seller’s credit report…it is possible that the bank might be able to legally garnish a seller’s future wages, attach bank accounts or otherwise pursue the seller for that money” June 25, 2016. It is important to consult an attorney to avoid these issues and gain the peace of mind that your transaction is complete.
While the cost of hiring an attorney might seem like a nuisance, it is well worth it should anything go wrong. Guidance, clarification of terms, resolution and avoidance of issues, and protection of your assets are things only having a lawyer by your side can give you. Do yourself a favor; hire an attorney when buying your home.