Real estate purchasers are one of the most common and biggest acquisitions that most of us make. In the US in 2020, there were 5.64 million existing homes sold according to statistics from the National Association of REALTORS and over 800,000 newly build homes were sold according to the U.S. Census Bureau.
Statistics also show that currently almost 65 per cent of Americans own their homes and the rate of homeownershp peaked in 2004 at almost 70 per cent, dropping since then for economic and other reasons.
And with so many people buying homes and with growing sophistication in the level of service provided by realtors and online programs and the like, some people ask whether it is actually necessary to even use a real estate attorney.
Some people will use at attorney at the early stage when they are assessing a brokerage contract while others will engage an attorney at the later stage when they are actively negotiating a house sale or purchase, as well as for the documentation of the sale and purchase transaction.
But some question whether they are always necessary at all. The short answer has got to be that those proceeding without legal assistance are opening themselves to a variety of risks.
So here are four reasons why using an attorney when you buy a home – or any real estate – is actually a good idea.
Let’s consider each:
1. They Can Negotiate for You
Working out what you should pay for a home is a central question for anyone buying and part of the process of finalizing a house purchase price is the ‘art of the deal’ (without quoting from the former President). It involves good negotiation and a good and experienced real estate attorney can help in that process with excellent results very often.
A real estate agent will make money off the commissions and while a good agent can assist in negotiation their principal focus will be commission-focused and hence a higher price, thus working against your best interests in that respect at least. A title company (if they are involved such as in Pennsylvania) will make their money off insurance.
But an experienced attorney who is used to handling negotiations can both assist with skillful negotiation and also the sheer fact of their legal background adds a greater weight and force to their work on your behalf.
State law will require different things of an attorney. For instance, some require an attorney for the closing and the lawyer may be there just to represent the buyer’s lender, which will not be there to represent your exclusive interests.
The requirements regarding real estate attorneys vary from state to state and can also vary even within the same state. As Philadelphia attorneys, for instance, Stoner Law are familiar with the laws in that state and one of the things about our state, as we know at Stoner Law, is that clients will sometimes point out that they do not need at attorney because real estate closings are able to be undertaken by a title company, which make money by selling insurance to the purchaser. So you can get a real estate deal done without hiring at attorney.
It is, however, essential to have legal representation in these deals to avoid pitfalls and problems. It is unlikely that you have the same level of experience that an attorney would when reviewing the line-by-line cost of a new home.
2. They Can Review Your Paperwork for You
The attorney will help to review the contract before it is finalized and to ensure that it is the most favorable to your own situation. This can take a few days and is an important part of any real estate deal to avoid the pitfalls (below) that can otherwise arise.
There are many ‘pieces of paper’ in a real estate transaction and the legal language can make things difficult for laymen to understand. There may also be other, specific issues that require expertise. For instance when buying a newly constructed home the warranties can be limited and disclosure issues and other problems can arise when the purchaser is unaware of what could or should be included in the documentation.
A real estate agent seeking to close the deal can put undue pressure on a purchaser. A good lawyer will ensure the paperwork and the deal is right for you, with full disclosures and an understanding of any warranty or other issues, so that you avoid the problems that can otherwise occur.
3. They Can Alert You to Hidden Legal Dangers
Do you have your eye on a home that would be perfect if it only had a garage or a swimming pool?
If you are planning to make any alterations to the house that you are buying, an attorney can not only review paperwork but research any homeowner’s association rules or laws that may prevent you from creating the perfect dream home.
Hidden issues can easily arise and a lawyer with local (both State and County) knowledge of planning and other laws and also even a knowledge of particular developers and how compliant they are with the legal requirements they face when building can make all the difference for those seeking to avoid ‘hidden’ dangers.
4. They Can Look for Potential Problems
Before you buy a home, you will be required to find out if there are any liens on the property. A lien may be placed on a property if an individual or business has a judgment against the property owner, but they have not collected the money. It is essential that those debts are paid and the lien is removed before a property is sold.
Similarly at title search has to be undertaken prior to settlement and this will indicate issues including who actually legally owns the property, along with any other questions that may arise.
A lawyer experienced in the area will also check to ensure what your neighborhood has planned. There are plenty of situations where purchasers find subsequently that roading or development changes are afoot and they are taken by surprise by what occurs, often diminishing the value of their new purchase.
A good knowledge of zoning and other laws can be invaluable for a purchaser and well and truly overshadow any question of avoiding the costs of a real estate attorney.
Source: Stoner Law