The real estate purchase agreement you sign is a legally binding contract between you and the buyer. If you have any questions about the legality of your contract, get a lawyer on your team immediately. No one else on the team is qualified to give you legal advice.
Suppose the buyer’s contract is presented to you at night or on a weekend when a lawyer isn’t readily available. Put a clause in the contract to stipulate that your acceptance is contingent upon review and approval of the contract by an attorney of your choice within five business days after you sign it.To determine whether you need a lawyer on your team, check out the following factors:
- If no agent is involved: For example, suppose you’re selling your house by yourself. If neither you nor the buyer has an agent, get a lawyer to prepare the contract, and have the lawyer do the work that an agent would normally handle. Eliminating the real estate agent doesn’t eliminate the disclosures, inspections, contingency removals, and other details involved in the house-selling process.
- The location of your property: In states such as California, lawyers rarely work on deals that only involve filling in the blanks on a standard, preprinted purchase agreement that’s been previously reviewed and approved by members of the state bar association. In other states, however, lawyers routinely do everything from preparing purchase contracts to closing the escrow. Your agent, if you’re working with one, knows the role lawyers play in your locale.
- The complexity of your transaction: You need a lawyer if you get into a complex financial or legal situation that can’t be covered by a standardized contract. For example, suppose you hold title as a tenant-in-common and are selling a partial interest in the property, or you want to structure the transaction as an intricate installment sale. Whatever. Unless your agent also is a lawyer, the agent isn’t qualified to do creative legal writing.
- If consulting an attorney helps you sleep at night: You may have the world’s easiest deal. Still, if you feel more comfortable having a lawyer review the contract, your peace of mind certainly is worth the cost of an hour or two of legal time.
Choosing among lawyersIf, for whatever reason, you decide you need a lawyer, interview several before making your selection. Real estate law, like medicine, is highly specialized. A corporate attorney or the lawyer who handled your neighbor’s divorce isn’t necessarily the best choice for your real estate team. Get a lawyer who specializes in residential real estate transactions. Good agents and brokers usually are excellent referral sources because they work with real estate lawyers all the time in their transactions.
A lawyer working for you needs to have the following qualities in their favor:
- They are full-time lawyer and licensed to practice law in your state.
- They are local: Real estate law, like real estate brokerage, not only varies from state to state, but it also changes from area to area within the same state. Rent control laws, condominium conversion statutes, and zoning codes, for example, usually are formulated and adopted by city or county governing agencies. A good local lawyer knows these laws and has working relationships with people who administer them in your area.
- They have a realistic fee schedule: Lawyers’ fees vary widely. A good lawyer gives you an estimate of how much it costs to handle your situation. As with financial and tax advisors, the experience factor comes into play. Seasoned lawyers generally charge more than novice lawyers, but seasoned lawyers also may get more done in an hour than inexperienced lawyers can. A low fee is no bargain if the novice is learning on your nickel. And you may pay the consequences if the novice fails to handle your case properly.
- They have a good track record: If the lawyer you consult thinks your case may go to trial, find out whether that lawyer has courtroom experience or intends to refer you to another lawyer. (Some lawyers don’t do trial work.) Always ask about the lawyer’s track record of wins versus losses. What good is a lawyer with a great deal of trial experience if that lawyer never wins a case?
- They are a deal-maker or a deal-breaker (whichever is appropriate): Some lawyers are great at putting deals together. Others specialize in blowing them out of the water. Each skill is important. Depending on whether you want the lawyer to get you out of a deal so you can accept a better offer or need legal assistance to keep your deal together, be sure you have the right type of lawyer for your situation.
If your lawyer’s only solution to every problem is a lawsuit, you may be in the clutches of a deal-breaker who wants to run up big legal fees. Find another lawyer!
- Speaks your language: A good lawyer explains your options clearly and concisely without resorting to incomprehensible legalese. Then they give you a risk assessment of your options to help you make a sound decision. For example, the lawyer may say that one course of action will take longer but will give you a 90 percent chance of success, whereas the faster option only gives you a 50/50 chance of prevailing.
Working well with your lawyerWhoever said that an ounce of prevention is worth a pound of cure must’ve been thinking of lawyers. A two-hour preventative consultation with your lawyer is infinitely less expensive than a two-month trial.
Good lawyers are excellent strategists. Given adequate lead time, they can structure nearly any deal to your advantage. Conversely, if you bring wonderful lawyers into the game after the deal is done, all they can do is damage control. The best defense is a good offense.
Beware of the awe factor. People tend to hold lawyers in awe because their word is law. Disobey lawyers and you go to jail. Baloney. Don’t blindly follow your lawyer’s advice. If you don’t understand the advice or if you disagree with it, question it. You may be correct and the lawyer may be wrong. Lawyers are every bit as fallible as everyone else.