How A Real Estate Lawyer Can Help

Many people hate paying 3-6% commission on the sale of their home to a realtor. It can add up to tens of thousands of dollars! Wouldn’t it be nice to save this money? The dirty little secret is… if you use a real estate lawyer and not a realtor, you don’t pay any commission! But isn’t a lawyer expensive? Not in this case! In many home sale transactions, a real estate lawyer might only charge a few hundred dollars for their services!

What if you want to use a realtor or what if you aren’t even selling your home? Can a real estate lawyer still help? Yes! There are many things that a real estate lawyer can do for you.

In regards to real estate, a lawyer can help with the disclosure documents, purchase agreement, inspection, title issues, and closing. A real estate lawyer can also help with bankruptcy and foreclosure issues. Also, if you find yourself in a bad situation with a landlord or a tenant, a lawyer can also help solve your problems. In sum, a real estate lawyer is not only inexpensive but also invaluable for real estate issues.

In this article, we’re going to teach you some general information about real estate law. This information will help when you meet with a real estate lawyer at an initial consultation. We’re also going to explain different ways that a real estate lawyer might be able to help your situation. Finally, at the end of the article, we link to our guide which lays out the specific steps to take on how to get a lawyer.

General Information

Before we go further, you need to know that the information in this section is only general information about real estate law. It is not legal advice, and it is not even specific advice. Instead, it is general information to prepare for your meeting with a real estate lawyer. At the meeting, the lawyer can accurately advise you on how real estate law applies to the facts of your specific situation.

Real Estate

Here is an odd statistic. Over 75% of home sellers still use a realtor. Why is this statistic strange? Well, in the past, to get buyers you would have to rely upon the realtor’s connections and word of mouth. But today, with the age of the Internet, you can list your home on many different websites, with hundreds of pictures, videos, and 3D tours. Potential buyers can find the exact house they want to buy on their own. The only thing left for a realtor to do is show the house and fill out the documents.

But did you know that you can show your own home and have a lawyer do the paperwork for you? What’s the benefit of using a lawyer over a realtor? Well, and this is probably not true for any other industry, but using a lawyer to help with the sale of your home is almost always cheaper than using a realtor!

Even if you aren’t selling your home, it is still wise to hire a real estate lawyer because the process is fraught with legal pitfalls and your lawyer will have your back.

Disclosure Documents

Aside from the purchase agreement, the disclosure documents are the most important documents when selling or buying a home. In these documents, the seller answers specific questions about the property. The goal is to help the buyer understand what they are getting into and don’t end up with a lemon. Whether you are a seller or a buyer, a real estate lawyer can prove themselves invaluable when it comes to the disclosure documents.

Drafting the Disclosure Documents

If you are selling your home, a real estate attorney can walk you through the process of filling out the disclosure documents. The documents themselves are standardized depending on the state where the house resides, and they include a lot of questions.

So here is the question. How should you answer the disclosure questions? Should you spill your guts and disclose everything? Or can you legally refuse to reveal certain things you’ve already fixed? Your real estate lawyer should have experience with disclosure documents and will know how much you have to disclose, but not too much so that you turn away potential buyers.

Here are a few of the topics that the disclosure documents might ask about the property:

  • Water problems
  • Sewer problems
  • Leaking in the roof either past or present
  • Water intrusion into the house either past or present
  • Foundation issues in the basement, crawl space, floors, etc
  • Insects or termites
  • Any problems with the mechanical systems of the house
  • Past or present existence of lead paint, asbestos, radon, etc
  • Drainage issues

What do you do when there was prior leaking, but now it’s fixed? Do you have to disclose past leaks? What about a sump-pump that broke and flooded the basement. Is that something you need to reveal? If the house used to have lead paint, but now it’s removed, is disclosure necessary? These are all excellent questions!

Failure to disclose required information could lead to a lawsuit. The best thing you can do to protect yourself is field any questions to your attorney. Your lawyer will know what you should put down to meet the minimum required by law.

Reviewing the Disclosure Documents

If you are buying a home, a real estate attorney can help you review the disclosure documents and identify areas of concern. Your lawyer should have experience with these documents and can determine whether the materials are improper for your state, identify missing important disclosures, and point out other areas of concern.

What should you do if there are missing answers or areas of concern? Let’s imagine the lawyer identified something odd with the disclosures regarding the foundation. If you run into this type of situation, your lawyer should know what to do. They have negotiation experience and can try to get the seller to reveal more information about the problem. The goal of this process is to make the most informed decision possible before buying the house.

Purchase Agreement

The purchase agreement, also known as the contract, is the primary document used between the buyer and seller when purchasing real estate. It’s usually several pages long and lists all kinds of details about the property. Here is an example of some of the items inside the purchase agreement:

  • Address of the property
  • Additional items included with the sale (ex., fridge, oven, dishwasher, etc.)
  • Purchase price
  • Escrow amount and who will hold the escrow money
  • Date of closing
  • Date of possession
  • Deadline for inspection
  • Deadline for raising issues about the inspection
  • Tons of other boiler-plate terms

Creating the Purchase Agreement

Who can create the purchase agreement? It’s a common misconception that only the seller can. The truth is that the seller and the buyer can both draft the purchase agreement and send it to the other for review. Your real estate lawyer should explain whether this would be advantageous to your situation.

Another common question is how expensive is it to have a lawyer create a purchase agreement? The answer is it’s usually cheap. You might not know this, but real estate lawyers and realtors don’t create a new purchase agreement from scratch each time they sell a home. Instead, they use a template, usually provided free of charge from the state bar association.

It’s not a requirement to use a template, but unless you want to pay hundreds if not thousands of dollars for your lawyer to create one from scratch, using a template is often the best choice.

The purchase agreement must be filled out by either you or your lawyer. It’s not hard to fill out, as long as you already know the answers to the relevant questions your lawyer will ask, such as purchase price, closing, inspection, and possession dates, etc. As long as you come prepared, it shouldn’t take any time at all for your lawyer to create the purchase agreement.

Reviewing the Purchase Agreement

Your real estate lawyer can also help you review a purchase agreement that you received from the other party, regardless of whether they are the buyer or the seller.

It should be easy for a lawyer to explain the content of the purchase agreement when it’s from a template. Your lawyer will have experience with these types of agreements, and it will be easy for them to explain the terms and conditions contained inside.

On the other hand, when the purchase agreement is custom and not based on a template, a thorough review can take more time. A lawyer will use their experience to ensure that critical elements aren’t missing from the agreement, which might skew the contract in the other party’s favor.

Once your lawyer reviews the purchase agreement, what happens next? Well, if you accept the price and the other terms, then things are easy. The lawyer will have you sign the purchase agreement and then send it back to the other party. That will get the ball rolling on inspection deadlines, title checks, and eventually closing.

But if you don’t accept the price or other terms, things can get a little trickier. Your lawyer can help you negotiate more favorable terms and make a counter-offer to the other person. Just keep in mind that this can take some time for the lawyer, who bills by the hour. Also, there is no guarantee the other party will accept your counter-proposal.

Inspection

An inspection occurs sometime after the purchase agreement is signed. Unless your mortgage company requires an inspection, it’s usually not necessary. However, it’s generally foolish to buy a house without performing an inspection. Yes, it can cost a few hundred dollars, but it can end up saving you hundreds of thousands of dollars if you were to buy the wrong house.

Let’s say that the inspection has taken place, and it turns up a bunch of hidden problems. Now what? If you’re the buyer, should you walk away or try to negotiate? It’s time to talk to your lawyer. They can help separate the defects that are dealbreakers from those that might be fixable and those that just come with buying a house. Your lawyer might recommend having the seller fix the defects or might suggest the seller coughing up some cash so you can do it on your own after closing.

On the other hand, if you are the seller and get a big list of stuff to fix from the buyer, what should you do? Your lawyer should lay out all your options so you can make the best decision. Also, your lawyer can help you make a counter-proposal to the buyer if their terms are not agreeable.

Title Issues

A real estate lawyer can also help with the title. In many instances, they can help you ensure that title insurance is acquired, assist with the title search, research and explain any easements on the property, and facilitate completing of the deed to transfer the title to the new owner.

You might not know this, but the deed is the legal document that records the transfer of the title. The title itself isn’t a document, but merely the legal right to the property. Your real estate lawyer can handle many aspects of the titling process and can help cure any hiccups from delaying closing.

Closing

In many real estate transactions, closing gets delayed. It might be that things come up with the inspection that takes time to fix or issues with the buyer securing financing occur. When these situations arise, your real estate attorney can advise you on the best course of action.

If and when closing occurs, your real estate attorney can walk you through the process. At closing, there are usually a hundred documents which must be signed, and your lawyer can ensure you are signing the correct forms.

Bankruptcy and Foreclosure

A real estate lawyer can help not only with buying and selling a home, but also with bankruptcy and foreclosure.

Bankruptcy

You might not know this, but going through bankruptcy doesn’t always mean you’ll lose your home. In chapter 13 bankruptcy, individuals can often keep their house and possessions.

When you speak to your real estate lawyer, they should help you through the bankruptcy process or refer you to a bankruptcy lawyer in your area.

Foreclosure

The threat of foreclosure is often terrifying. You’ve sunk a lot of money into your house, and now the bank is trying to take it away. In these situations, seeking help from a real estate lawyer is the best choice. A lawyer with experience will understand the relevant foreclosure laws in your state and can assist you through the process.

Your lawyer can also make sure the lender is following all the necessary laws. Sometimes, this includes ensuring that the mortgage wasn’t a scam and everything in your is legitimate. In the past, there have been situations where banks incorrectly foreclosed on people and lawyers have to step in and solve the problem.

It might be possible for your lawyer to help with a loan modification. However, this is often at the discretion of the bank and usually rare.

Finally, as we already discussed above, your lawyer can advise you on whether you can file chapter 13 bankruptcy in your specific situation. In chapter 13 bankruptcy, there is a high likelihood of keeping your house and possessions when the process is complete.

Landlord-Tenant

Landlord-tenant law is another area where a real estate lawyer with experience can help. In landlord-tenant situations, the main issue is usually eviction.

Eviction

A real estate attorney will understand the laws for eviction in your state. In many states, a landlord can only terminate a lease and begin the eviction process when the reason is “for cause.” In any other situation, the landlord usually has to wait until the contract ends. But these are all situations where a lawyer will know the rules and requirements in your state for eviction.

Another thing a landlord can’t do is “self-help” which means they can’t do the court’s job in place of the court. In general, a landlord cannot change the locks on the doors, throw out the tenant’s stuff, cut off the utilities, etc.

Each state has different penalties for a landlord who self-helps, ranging from the actual costs suffered by the tenant, to punitive damages against the landlord. Also, many states allow the tenant to collect attorney fees from a landlord who self-helps. When you speak to a real estate attorney, be sure to ask them what constitutes self-help and what does not. You don’t want to find yourself in a situation where you could be liable to the tenant.

Another thing a real estate attorney can do is help you navigate the eviction process. If you are evicted, a lawyer can make sure that the landlord is following the law. On the other hand, if you are the landlord, hiring a real estate lawyer increases the likelihood the eviction will be carried out legally and by the book.

Other Landlord-Tenant Situations

In addition to eviction, there are many other ways that a real estate attorney can help in a landlord-tenant situation.

  • Is it legal for a landlord to enter using their key and confiscate the tenant’s belongings?
  • What can a landlord do if a tenant abandons the premises and isn’t paying rent?
  • Can the landlord sue the tenant?
  • What if the landlord hasn’t given the tenant possession of the property yet even though the lease has begun?
  • When can the landlord relet the premises to someone else?
  • Is it okay for the landlord to “drop” in on the tenant to check on the property?
  • How are repairs handled?
  • How soon does the landlord have to repair stuff?
  • Can the tenant deduct the cost of repairs from rent?

Questions like these are the types of questions that a lawyer experienced in real estate law should be able to answer. Usually, the answer depends on the law of the state. You should always consult with your attorney to ensure you are following all the relevant rules.

Other Areas a Real Estate Lawyer Can Help

If you thought that real estate, foreclosure and bankruptcy, and landlord-tenant issues were the only ways a real estate lawyer could help, you would be mistaken.

Neighbors

In many cities, real estate lawyers find themselves helping homeowners with complaints against their neighbors. A lawyer can help explore options and remedies against neighbors who are unruly or disruptive, who are creating a nuisance in the neighborhood or aren’t following one or more laws in the city for their property.

Home Owner’s Association

A real estate lawyer can also help with HOA rules and regulations. They can help you read the HOA document which is usually full of legalese. Based on their understanding of the agreement, they can provide a third-party opinion about whether the HOA is right or you are right. Also, some HOA documents have attorney fees clauses. An attorney fee clause usually means that if you sue the HOA, you could be liable for their attorney fees if you lose. A provision such as this is something your lawyer could investigate.

Also, you might live in a neighborhood and want to form an HOA but don’t know where to start. In almost every instance, a real estate lawyer can help you establish an HOA using the necessary documents, and it should only cost a few hundred dollars.

Zoning and Land Use

If you are buying land or have a problem with how certain property in your neighborhood is being used, you should consult with your real estate lawyer. They deal with issues such as this all the time and will know the relevant laws which cover these situations.

Boundary Disputes

Is your fence on your property? Did your neighbor cut down a tree that he says was on his land, but you know was on yours? It’s issues like these, plus more, that a real estate lawyer can help guide you through.

General Ways a Real Estate Lawyer Can Help

Now that we’ve covered the specific ways a real estate lawyer can help, such as real estate transactions, bankruptcy, foreclosure, landlord-tenant, and others, it’s time to look at the general ways they can help.

Save a Ton of Money Selling a Home

As we’ve already stated above, as a seller you have to pay on average six percent commission when you sell your home. The six percent is usually divided in half, with half going to your realtor and the other half to the buyer’s realtor.

What this means is if your house sells for $300,000 then you pay $18,000 in realtor fees! That is usually two years of mortgage payments!

The less expensive way to sell your home and still feel confident about the process is to use a real estate lawyer. If you want the bare minimum, they might only charge $500. But even if you have your lawyer do a bit more work, it shouldn’t come close to the cost of commission.

Reduced Complexity

The laws surrounding zoning, easements, eviction, mineral oil and gas rights, and related issues are very complicated. Some of these issues involve state-specific laws, while others rely upon federal laws, and some might include a combination of both.

At the very least, you should schedule a consultation with a real estate attorney to see how they can help your situation. Many lawyers offer free consultations so it shouldn’t cost you anything other than your time to find out how they can help.

Reduced Stress

All of these areas of law can have serious consequences and cause a lot of stress. Stress is especially true with the negotiation process of buying and selling a home, or bankruptcy and eviction related issues.

When you hire a lawyer, they can shoulder a lot of this burden themselves. In many cases, they are the voice of reason and can sooth a lot of your fears and worries. Let your lawyer handle the stress, and put your trust in their judgment.

How To Get A Real Estate Lawyer

If you’ve come this far, then you should have enough general information about real estate law to assist a lawyer in advising you about your specific situation. Also, you should have a general idea about how a real estate lawyer can help your situation.

But before you start searching for a local real estate lawyer, there is one more step you should take. We highly recommend reading our guide about how to get a lawyer. In the guide, you will learn many things about how to get a lawyer. Here is an example of what you will learn:

  • How to find a lawyer experienced with real estate law.
  • How to research the lawyer’s background.
  • Questions to ask before an initial consultation.
  • Questions to ask during an initial consultation.
  • Observations to record about the lawyer
  • How to decide whether to hire the real estate lawyer.

Once you read this guide, you should be prepared to hire a lawyer to help with your real estate needs.