Do you need a real estate attorney?
-- Page 2
Often you just want someone
who can translate the legalese. In that case, the closing agent, who is often
an attorney, can be a good resource, says Shemin. "Most of the time they
have dual agency, they represent both the buyer and the seller," he says.
And they should answer "any questions you have, if it takes 20 minutes or
an hour," he says.
they say, 'We do not represent you, only the seller,' that's a big red flag,"
says Shemin. And it's a sign you might need your own lawyer with you.
Feel like everyone at the closing table is more interested
in completing the transaction than watching out for your interests?
There are two fairly simple ways to get someone on your team at
closing, says Shemin.
First, buy your own title insurance. "In most
states, the owner pays for title insurance," he says. But "if
you get an owner's policy you are protected as a buyer. And, No.
2, then I have some representation from that title company."
Expect to pay in the range of $50 to $200, he says. "It can
be very reasonable. Every time I've done that, I haven't had a problem."
And second, if you have a title or escrow company you use and trust,
have that agent draw up the papers.
But any time you get into an atypical situation --
anything out of the ordinary -- you want your own real estate lawyer
to make sure your interests are protected. Some examples:
closing, the seller delivers the deed in a different form than you agreed. What
if you are presented with the inferior quitclaim deed instead of the more acceptable
warranty deed? "The problem at most closings is that the brokers and escrow
agents don't get paid unless it closes," says Jacobus. "So they are
naturally inclined to encourage you to close instead of create a stink."
seller starts dragging his feet. He is doing everything he can to kill the deal,
and you suspect he's gotten a higher offer. "An attorney would threaten to
file suit and file a lis pendens, which clouds the title because you have an equitable
claim to buy the property," says Jacobus.
- At closing,
you find out there is a title defect. "An IRS lien pops up," says Jacobus.
"Somebody's got to be able to tell you what your rights are. The seller always
says, 'It's a mistake. Let's go ahead and close.'"
- The seller is pledging an ongoing responsibility
to the property. Is he still making repairs or promising to remedy
a particular problem if it reoccurs? Get it in your contract and
have an attorney look over the wording, says Jack Guttentag, author
of "The Mortgage Encyclopedia" and professor emeritus
of finance at the Wharton School at the University of Pennsylvania.
If you're a
first-time buyer or you're buying an investment property, a couple of hours of
an attorney's time are just inexpensive insurance.
A few days before one closing,
Shemin's attorney discovered that the owner had recently sold the
property to someone else. But the seller hadn't yet filed the paperwork
at the courthouse. His attorney immediately
filed a copy of the contract, beating the other claimant and clouding
the title for any other prospective buyers.
prevent a similar situation, many states allow an attorney to file either the
contract or an affidavit saying you have an interest in the property and are preparing
to close within a specific time period, says Shemin. But it's a maneuver that
requires some legal expertise.
"That protects people," he says. "It's
protected me many times."