What Does a Real Estate Attorney Do?

Talia Lee-
July 04, 2024

A real estate lawyer ensures the legality of property transactions, reviews and explains documents, drafts contracts, resolves conflicts, and helps you avoid costly mistakes. Here’s more about the role of a real estate attorney and how to find one.

A real estate lawyer specializes in property-related matters, including buying and selling homes, ownership, management, compliance, disputes, and title issues. They ensure that agreements accurately reflect their client’s understanding of the deal, says attorney Elizabeth Whitman of Whitman Legal Solutions in Potomac, Maryland.

According to Bruce Ailion, an attorney and Realtor with RE/MAX Town & Country in the Atlanta area, a real estate lawyer has several key responsibilities:

  • Confirming that ownership is properly vested in the seller of the home.
  • Identifying any unpaid loans, liens, litigation, or other claims against the property and working to clear them, as well as uncovering deed restrictions, covenants, and any breaks in the chain of title.
  • Arranging for title insurance.
  • Negotiating and reviewing the real estate contract to determine how money will be allocated.
  • Preparing the deed, disclosures, the mortgage or note to secure debt following the mortgage lender’s instructions, and explaining the terms to their client.
  • Searching for obligations like taxes, utility charges, and homeowners association fees, and prorating them based on the contract.
  • Preparing a settlement statement showing the funds from the buyer (or provided on the buyer’s behalf) and the charges to all parties involved, such as agent commissions, attorney fees, underwriting fees, taxes, title search fees, loan discount points, and more.
  • Facilitating the closing and potentially hosting the seller and buyer to sign documents and collect official identification.
  • Confirming that the parties have fulfilled their obligations under the contract and assisting with conflict resolution.

Real estate attorneys can also provide valuable advice to buyers and sellers in for-sale-by-owner transactions by drafting and reviewing the purchase contract and helping guide the transaction to closing.

In a real estate transaction, several attorneys are typically involved: one representing the buyer, one representing the seller, one for the mortgage lender (if financing is involved), and potentially one for the title company.

“One real estate attorney cannot represent both the buyer and the seller simultaneously,” says Whitman. “In most home purchases, it’s common for at least the buyer to have a real estate attorney. In some states, an attorney must be involved in at least part of the transaction, usually to address title or deed issues.”

Both buyers and sellers can benefit from hiring a real estate attorney, whether the transaction involves a home or an investment property. “Investment properties, in particular, involve tax considerations that most buyers and sellers aren’t equipped to handle on their own,” says Whitman.

Buying or selling a home is a significant financial transaction with a lot of money at stake, and the relatively small cost of an attorney can be worth it to protect your interests. “If the transaction is complex, it’s never a good idea to handle it on your own, as the risk of loss is too great,” says Ailion.

“People who don’t hire an attorney risk contract revisions that aren’t in their best interests, errors in their mortgage loan documents, or title or survey problems that aren’t covered by title insurance,” Whitman explains.

For example, one couple was attempting to purchase their first home, a historic house originally built without a bathroom. “When they received their survey, they learned that part of the only bathroom in the house was built on the neighbor’s property. A real estate attorney was able to address the situation so that the buyers wouldn’t have to worry about their neighbor or the local zoning officials requiring them to move their bathroom.”

In another scenario, a buyer didn’t receive all of the required condominium documents from the seller. “The attorney identified the problem and requested the additional documents,” Whitman says. “After reviewing them, he saw that the condominium association was underfunded and that fees would need to be significantly increased soon. The buyer was able to use this information to negotiate a reduction in the purchase price.”

Many states actually require you to hire a real estate attorney, at least to assist with closing duties. These states include:

  • Alabama
  • Connecticut
  • Delaware
  • Georgia
  • Kentucky
  • Louisiana
  • Maine (you may be able to hire a title company instead of an attorney)
  • Maryland
  • Massachusetts
  • Mississippi
  • New Hampshire
  • New York
  • North Carolina
  • North Dakota
  • Oklahoma (required only for title examination)
  • Rhode Island
  • South Carolina
  • Vermont
  • West Virginia
  • Wyoming

(Source: Homelight)

Whether mandated or not, a real estate lawyer can be an invaluable ally, particularly for the buyer, says Shavon Jones, an attorney based in Miami. “There are many risks involved with forgoing the services of a real estate attorney,” Jones explains. “I’ve had people come to me when deals fall through, fighting over the deposit money or who’s going to pay for a leaky roof or crack in the foundation. I’ve had sellers receive better offers and look for ways to back out of the agreement they signed with the current buyer.”

If you plan to work with an attorney, enlist them well before you sign a purchase agreement. “Many sellers and buyers wait until after they have signed the purchase contract to hire an attorney, but by then they may have committed to unfavorable contract terms that the attorney could have helped them with,” says Whitman.

When hiring an attorney, be clear about what you want them to do, such as helping you draft an offer. Also, ensure you understand their caseload and their ability to handle your transaction in a timely manner. Clarify how they bill and what services are included in their fees.

The cost of hiring a real estate lawyer varies based on the work required, the lawyer’s expertise, and their location. Most attorneys charge an hourly rate, but some might offer a flat rate if their role in the transaction is limited, according to Whitman. Some attorneys specialize in handling closings and typically charge a fixed fee for this service.

“For comprehensive representation on a small home purchase, especially transactions that don’t involve a real estate agent, expect to spend about $2,500 to $3,000,” says Jones. A real estate attorney hired to simply review and edit a contract might charge around $500, she adds.

In the Atlanta market where Ailion practices, attorney fees for a standard closing typically range from $550 to $1,150. If the transaction involves complicated title issues, the fee can be higher.

Regardless of the fee structure, you will be expected to pay for the attorney’s services either before or at the closing.

Seek referrals from family, friends, coworkers, or your real estate agent. You can also contact your state bar association or a local title company for recommendations.

Before making a decision, screen several candidates. Here are some questions to ask:

  • Do you have experience with this type of real estate transaction?
  • How many real estate deals have you closed in the past year?
  • Are you a member of the real estate section of your local bar association?
  • Which title insurance company are you authorized to represent?
  • Are you on the approved attorney list for closing loans with several large banks?
  • What are your fees, and do you charge a flat fee or an hourly rate?
  • What is your availability? Are you available on weekends (typically when the buyer is house-hunting)?
Review : 4.8/155
Thank you for your review 😘