The vast majority of residential home purchases are relatively simple transactions that involve boilerplate forms. As such, they are usually handled by real estate agents and brokers alone without the involvement of attorneys. However, there are several reasons why you might want to think about hiring an attorney to represent you when buying a house. The three most important are as follows:
Most standard real estate transactions are done through agents instead of attorneys, although this has not always been the case. Few may know that real estate agents are actually not required to buy or sell a home and that the entire process can be handled by an attorney. In fact, because real estate agents are not lawyers, they are prohibited by law from drafting purchase agreements for the buying and selling of real property. Instead, they use standardized forms (prepared by attorneys) and merely fill in blanks with their customers’ information. This can cause problems because standardized forms often leave out important information regarding your particular transaction and can lead to headaches down the road. Only a licensed attorney can draft a purchase agreement on your behalf that takes all of your unique circumstances into consideration.
Title searches are completed by attorneys, usually working for title companies, to ensure that the property being sold is free of any liens, judgments, or other encumbrances. If an encumbrance is discovered, an attorney can help you address the issue and secure proof that any encumbrances have been satisfied. This is particularly important if title insurance is part of your transaction. A private real estate attorney can undertake a title search on your behalf, negotiate with the title insurance company to get the best coverage, and explain to you what is and is not insured. He or she can then determine whether any encumbrances will impair your ability to sell your property later.
Conflicts of Interest
In most cases, a buyer’s and seller’s interests are adverse to each other. The buyer’s and seller’s agents also have interests that conflict with each other’s and your own—agents are paid on commission and want to make a sale, even if that sale is not necessarily in your best interest as their customer. Further complicating matters is that many real estate transactions utilize dual agency, where one real estate agent represents both the buyer and the seller. These types of arrangements are strongly disfavored by the law but are nonetheless tolerated. If you enter into one with the seller’s agent as the sole agent, you are putting yourself in a precarious position of entrusting your interests to someone whose own interests are adverse to yours. Only a lawyer, who is under no pressure to close a deal, has your true best interest in mind and will zealously assert your rights in the transaction.