Before the widespread use of certified real estate persons or entities, such as title insurance companies, real estate brokers, and home appraisers, an attorney was the primary professional involved in the purchase and sale of a home. Traditionally, an attorney was responsible for a number of important tasks that come up when completing such a transaction.
For one, they were in charge of negotiating both the asking price and the final sale price of a home, as well as negotiating the types of financing options that a buyer could use to purchase a home. They also were required to approve the title documents, which included making sure that both the title and deed to a home were legally valid.
Attorneys also often advised the seller and buyer about specific zoning and real property tax laws that governed the area in which a particular property was located. For instance, if the rate of real property taxes was increasing within the next year, the attorney would inform the parties since it could affect the buyer’s decision to purchase the home in question.
In addition, an attorney was responsible for overseeing the closing. The closing is the last stage in the purchase and sale of a home that a buyer and seller must go through before they officially sign the contract that finalizes the sale of the home. Attorneys were also used to resolve any disputes that arose between the purchaser and seller.
Although some of these tasks are very similar to the ones that attorneys might do today, a good portion of them have been delegated to other parties. For instance, we now have title companies to verify and maintain records of the deeds and titles to a home.
Also, some attorneys today may even specialize in a particular field of real property law. For example, instead of having to advise on both laws for zoning and real property taxes, an attorney may now only focus on one since these are very complex areas of law.
Thus, regardless of whether you are purchasing or selling a home, you will most likely need to consult a real estate attorney at some point in the process. At the very least, you will need a real estate attorney to review the terms of a home purchase or sale agreement before you sign on the dotted line.
Today, What is the Role of an Attorney in the Purchase and Sale of a Home?
As discussed above, an attorney can and still might carry out many of the tasks that they were initially required to do during the purchase and sale of a home. However, the traditional role of an attorney is starting to decrease in certain areas since there are many types of parties now that a buyer or seller can use instead (e.g., title insurance companies, real estate agents, etc.).
However, there are some issues that might come up that absolutely necessitate the use of an attorney. For instance, if a buyer backs out of the purchase sale agreement, then the seller may want to sue the buyer for breaching the agreement and to recover monetary damages. The parties will both need to hire their own attorneys to represent them in court on the matter.
An attorney can also be helpful in situations where a title insurance company, escrow agent, or real estate broker does something that goes beyond what is required of their role in the process of a purchase and sale of a home.
For example, if a real estate broker drafts the contract for the purchase and sale of a home, as opposed to filling in the blanks of a contract that was drafted by an attorney, then they might be in violation of practicing law without the proper credentials.
It should be noted that real estate agents are not allowed to provide legal advice. This means that they cannot answer any legal questions about the property without being in violation of the law, even if they know the right answer. If a real estate agent does offer legal advice or draft a contract that is not approved by an attorney, then they could stand to lose their real estate license.
So, while a real estate agent may be knowledgeable about a particular property and the surrounding neighborhood, it is always best to have a lawyer on hand to answer any legal questions. This prevents the real estate agent from getting in trouble and ensures that the parties will have all of their questions answered by the time of the closing.
Despite the fact that title insurance companies exist, the parties should always have a real estate attorney look over their paperwork. For instance, a real estate attorney should be the person in charge of reviewing mortgage loan documents, title and homeowner’s insurance policies, and the title documents to a home (e.g., the title and the deed). This ensures that this paperwork is valid and that there will not be any issues before, during, or after the closing.
In addition, the parties should definitely use an attorney when they need to finalize any agreements or if they need to back out of a contract connected to the property. A real estate attorney not only knows and understands the rules related to these types of documents, but also can provide legal representation in the event that an issue with the contract leads to a lawsuit being filed against a party in court.
Also, if there is an issue with a real estate agent, a home listing, or with some of the paperwork that involves fraud, then a modern day attorney can assist with resolving the issue and making sure the party who was deceived receives monetary damages for any losses it may have caused.
Lastly, as a general rule of thumb, the more complex that a home purchase and sale agreement is, the more likely the parties will need to hire an attorney to resolve issues or handle legal matters that may arise before the closing.
Do I Need an Attorney for the Purchase and Sale of a Home?
As is evident from the above discussion, the purchase and sale of a home can be a very complicated process. It involves many legal conditions, which if not complied with, can result in serious legal consequences. The purchase and sale of a home also requires knowledge of various complex real estate laws, detailed procedural requirements, and solid negotiating skills.
Thus, if you are in the process of buying or selling a home, then it may be in your best interest to hire a local real estate attorney for further assistance. An experienced real estate attorney can explain what you must do as a buyer or a seller of a home. Your lawyer can also discuss what rights and protections you have under the law during this process.
In addition, a real estate attorney can help to negotiate the price of a home and can handle any disputes that may arise before the final transaction. Also, should you need to appear in court or have to file a lawsuit against the other party, your attorney can assist you with the appropriate process and provide legal representation.