Price-conscious consumers are constantly looking for ways to snag savings. Be it a do-it-yourself bathroom backsplash or self-help legal documents, the current trend in real estate is shying away from enlisting a perceived-as-pricey professional. However, some projects are too complex, valuable, or regulated to take on as a layperson — and the result is often a frantic call to the local plumber or electrician.
In the legal realm — particularly the transfer of real estate — there are definitely times when an attorney is not necessary, and the transaction will most certainly process without the assistance of a real estate lawyer. However, certain states mandate attorney involvement (or at least prohibit non-attorney over-involvement), making it unlawful to participate in a real estate settlement without a licensed attorney presiding. And certain transactions are too complicated, costly, or stressful to go it alone.
Here are four situations when you should consult a real estate lawyer.
When it’s mandatory
A handful of states unequivocally mandate the involvement of a licensed attorney in a real estate transaction. These states take a dim view of non-attorney staff members preparing and conducting real estate settlements, calling such acts an “unauthorized practice of law.”
This phrase actually derives from the rules of professional conduct (i.e., ethics) that govern attorney practice, and can result in sanctions against an attorney-supervisor for allowing this unauthorized practice with minimal oversight.
Currently, Delaware, Georgia, New York, North Carolina, and South Carolina require attorney involvement, oversight, and direction in all aspects of a real estate transfer, from title review to signing documents. In Alabama, a non-attorney can perform a title search and issue title insurance, as long as a licensed attorney drafts all legal documents (e.g., deeds, mortgages and promissory notes).
In all these states, the buyer has the unequivocal right to choose his or her legal representation; realtors, brokers, and lenders are not generally permitted to force a buyer to work with a certain attorney.
When it’s complex
For buyers in other states, working with a real estate attorney may still be advisable if the situation involves a complex or unique issue, such as:
- Oil and gas rights
- Riparian rights (i.e., access to water)
- Beachfront property
- Any property subject to an easement
- Adverse possession claim
- Historical property
- Preserved property (i.e., farm preservation)
- Zoning and/or land use disputes
When any of these issues arise at the outset of a real estate transaction, working with an attorney will inevitably be more cost-effective than dealing with a major conflict or claim later. In addition, the attorney can help review the title and ancillary documentation to ensure all documents comply with state and federal laws.
When it’s high value
Likewise, working with an attorney in a high-value residential transaction can be extremely important, particularly given the extent of the investment. When making a major real property purchase, buyers should ensure that the property is in prime shape — and demanding afull home inspection is one of the most important aspects of this process.
Not only can an attorney work with the home inspector to ensure the property meets the buyers’ expectations, but the attorney can help negotiate with the seller if any issues arise.
Also, high-end real estate may be subject to several liens, encumbrances, or judgments. A proper title search by an experienced real estate lawyer is the best way to ensure that these issues do not pass to the buyer on settlement day.
When it’s high stress
Lastly, not all real estate transactions are positive experiences, particularly if the seller is in a financial bind or the property is being sold from the estate of a recently deceased individual.
When an air of emotion permeates the process, parties are apt to make rash decisions on price, contingencies, or conditions. And when a residential home sale feels “forced,” tempers may flare at the settlement table.
By invoking the help of a legal professional to work through the process, buyers and sellers can participate in the transaction with confidence and a full understanding of what is happening, from the initial contract execution to the final closing.
Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.