Why Do You Need an Attorney When Buying or Selling a House?

Buying a houseBuying a house will probably be the most significant and the largest financial purchase you will make in your life. Of course, the house buying or selling process is one of the most complex and stressful things that requires much time, knowledge and a lot of effort, but not only. Also, this process involves the law of real estate, because each state has its own requirements and certainly there are different cases and problems demanding special issues of practice in this field of law. A real estate lawyer is specially trained and has enough experience to deal with these problems.  That is why you should start with a consultation with an experienced real estate attorney, who can help you avoid making any mistakes in buying or selling a house.

Home Buying Statistics

The 2013 National Association of Realtors (NAR) has conducted a Home Buyer Survey and it claims that 16% of purchased homes were new houses. The average price for a house was $210,000. The average price for a new house constituted $259,000, and for a previously owned – $196,000.

According to NAR in 2012 the average household income of buyers was $83,300.

Financial Crimes Enforcement Network (FinCEN) states that 69,000 suspicious activity reports to mortgage loan fraud were received in 2012. Here you will find more information about home buying/selling statistics.

Who are All of the Parties Who Could be Involved in Your Real Estate Closing?

Closing/settlement occurs when you sign the papers that make you the owner of a house, i.e. it is the final step in the process of a transaction. Nevertheless, the closing procedures vary from state to state or even from country to country, the following parties will be involved on closing day:

  • you – a buyer, also known as a mortgagor;handshaking
  • attorney (both sides, i.e. the buyer and the seller, may have an attorney );
  • buyer’s real estate agent (i.e. who showed the property);
  • home seller;
  • seller’s listing agent;
  • lender, also known as a mortgagee;
  • representative of the lender (could be an attorney);
  • title company representative for providing written evidence of the ownership of the property (could be an attorney);
  • closing agent (could be a representative from the title company or real estate attorney);
  • a notary public (represents your legal interests and deals with legal aspects and registration process).

The closing agent conducts the closing meeting and makes sure that all documents are signed and that all fees and escrow payments are paid.

Do I Need a Lawyer to Assist Me in Buying a House?

Technically no, but practically yes. Surely, you can try to do without attorney`s consultation in buying a house, but this process can turn into a real nightmare. As it was already mentioned, there are some unique cases with house purchase that require a professional legal opinion.

You should be aware that Non Legal Services are available to assist you in a purchase purpose. Whereas, these services may be cheaper, they are not regulated and licensed as a lawyer is required to be. In the case when lawyers make any mistakes on their part, they carry insurance that cover the damage that you may incur. Moreover, most title companies and mortgage lenders require you to use an attorney to insure, i.e. to clean title that is free of any liens and make sure that the real estate transaction will be actually closed.

If You’re Buying a House, Your Lawyer Should Do the Following:

There is a list of requirements your lawyer should do when you`re buying a house. First of all, the lawyer should help you understand and clarify the purchase contract; protecting your interests. Secondly, your lawyer should check if there are no covenants, easements, liens that could be registered against the property; review the Home Inspection Report for any structural problems and if there are any significant defects with the home, he/she should assist you to negotiate a fair credit. In the worst case, if the structural defects are severe, negotiate a release from the purchase contract.requirements

Other requirements for the lawyer would be to define how you will take title to the property and ensure that the title is clear. Your attorney should work with your lender to ensure a timely and successful credit; prepare and register all the requisite documents; closely review all of the closing adjustments (i.e. taxes accrued; utility costs; etc.); attend the settlement; review and help you to understand all of the documents that you will be required to sign. As well as arrange title insurance protection to protect you from losses that could arise from title defects.

If you’re Selling a House, Your Lawyer Should Do the Following:

In the case you are selling a house, the lawyer should assist you in negotiating the contract with the property listing agent; review the contract and help you in negotiating its terms. He/she also undertakes a preparing of all the closing papers including the deed and letter of attorney. If a title agent is involved, the attorney must order the title and make sure that it is very clear. Further, he/she should deal with title issues as they arise and help to fix them. Also, the lawyer should attend the closing meeting and review all the papers you will be required to sign. Alternatively, your attorney can represent you at the settlement if you pre-sign all of the required documents; organize for transfer of security deposits or manage and disburse the earnest money if it had been escrowed with the lawyer, and if it is necessary arrange for insurance certificates.

Most Common Title Search Problems

Buying a house is probably the greatest investment you will ever make in your life. Even if the house you’re buying is new, it may have its history. Title search can help you to find defects, if there are any in your property, which can lead you to lose part or all of the investment in your house.

You may ask, ‘What is a title?’ A title is a property ownership. It is the right of an owner to possess and use the property. In order to protect your investment from these title defects, you need title insurance. Here are some most common title search problems that will be useful in buying a house, and they are:

  • Clerical or Filing Errors in Public Records;
  • Property Liens: Sometimes even after thew deal was closed, banks and finance companies may place liens on the property for unpaid debts of the prior owners;
  • Illegal Deeds: It is possible that a prior deed was made an undocumented (i.e. illegal) immigrant, a minor, a person who is of “unsound mind”, or one who is reported single but is actually married. These instances may affect the enforceability of your current deed and therefore, property ownership;
  • Missing Heirs & Contested Wills: Disputes can arise long after your purchase of the property among heirs, people not named in the will;
  • Document Forgeries;
  • Unknown or Undiscovered Obligations to a Property such as a former mortgage or lien and non-financial claims, i.e. restrictions or covenants which limit your use of the property;
  • Unknown Property Easements: Limited right to use the surrounding land as you`d like;
  • Property Boundary & Survey Disputes: Even if you have seen several surveys of your property prior to purchasing, other surveys may exist that show different boundaries;
  • An Undiscovered Will: A property owner could die without a valid will or heirs and the state could sell their property;
  • False Impersonation of a Previous Owner: A property owner could be falsely “impersonated” by another party especially in situations involving common or similar names.

Most Common Real Estate Closing Problems

problemsYou can face many problems that can arise when buying a house. Knowing these problems, you can prevent them in the future. These common closing problems are: errors in documents (it could be simple mistake as a name misspelled or shifted number in an address); problems with the lender, for example, you are paying too much for the house but the appraisal of the house comes back low and the lender reduces the amount available for your loan. Or for example, the lender backs out due to fraudulent or incorrect information filed in your mortgage application; serious problems identified during the Home Inspection such as exterior walls, roof, foundation, electrical issue, fire safety, etc. Other problem on closing could be your failure or inability to obtain insurance. Also, it is not improbable that the seller backs out of the transaction because they receive a better offer, or they refuse to make certain repairs to the house, or maybe they refuse to accept certain contract modifications.

Having the right real estate lawyer and title insurance will protect you and your home. If you need any legal help, please contact an experienced attorney. You still don’t know where to find a good real estate lawyer? Legal Bistro is here to help you! It’s an online community where lawyers with different areas of practice are willing to help you with your legal problem!


Our motto is "When Lawyers Compete You Win!" If you are a consumer in need of legal services, you can post your case anonymously and Free of Charge. If you are an attorney seeking new clients, you may register on the site for free. You will only pay when a client requests that you contact them to discuss their case.

Leave a Reply

Your email address will not be published. Required fields are marked *


8 × three =

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>