The Importance of Having an Attorney When Buying or Selling Real Estateby admin
The Importance of Having an Attorney When Buying or Selling Real Estate
by Leonard W. Foy III, Esquire
Notwithstanding my official-sounding byline, my friends call me Len Foy, some even call me Lenny, which takes me all the way back to my childhood, and all of those wonderful memories. Is my sarcasm coming through? Anyhow, the word is out among my friends and family members that I am a practicing real estate attorney, and my office handles somewhere in the neighborhood of 600 hundred real estate transactions each year, across four New England states. Still, people are always asking me, “Lenny, why do I need a lawyer to buy or sell real estate?”
There may be too much ground to cover in this brief article, but I’ll try to convey to the reader what I have explained to those who have asked me this excellent question:
1. The Level of Difficulty Keeps Going Up
Here’s one thing I can say for sure about real estate, it’s getting harder. I handled my first real estate transaction back in 1995, trying to assist a client with the sale of her home in Roseville, California. (Author’s note: The sales price of that property was a whopping $35,000, I’m guessing that $35,000 won’t get you much in Roseville, California today.)
Back in 1995 real estate was the proverbial “piece of cake,” the sellers were happy to sell, the buyers were happy to buy, and an assortment of real estate professionals, including realtors, lawyers, appraisers, inspectors and contractors, well, they all made a few bucks for their trouble. Are you ready for this revelation: real estate was fun, yes fun, and at the time I disdainfully referred to it as the “Toy Department” of the legal profession. For my part, I preferred the concrete jungle of litigation, with courtrooms and shots being fired in anger. I mainly took on real estate matters to educate myself about real estate and to help me through the litigation lulls.
But the utopian society of 1995 has given way to the dystopian society of 2014, where the economic downturn has left most people frazzled and in a state of constant distress. And people are bringing that negative energy to their home-buying and home-selling repertoire. I won’t torture the reader with any war stories or unhappy anecdotes, just please accept my assessment that hiring a lawyer is one way to guard against the gamesmanship and skullduggery that the modern real estate transaction frequently includes.
As a child, I remember being at the toy store and reaching towards a board game only to have mom or dad tell me, “The level of difficulty is too high.” Remember how they had the recommended ages written right there on the side of the box? Well, it’s much the same dynamic with real estate in 2014. The level of difficulty keeps going up, and at the present time it’s too high to take on without the assistance of a qualified real estate attorney. So please, bite the bullet, and when buying or selling real estate, hire a lawyer if only to help you through the rough patches.
2. The Real Estate Attorney is the Cheapest Lawyer Money Can Buy
Most people understandably connect lawyers to their prior experiences dealing with legal matters: divorce, criminal offenses, being sued, these are a few examples. And all of us who have contracted for legal services can attest to the enormous financial expense of it all: paying huge retainers, chatting briefly with an attorney about a routine matter and then being billed hundreds of dollars for it, mortgaging a home and using precious equity to settle a bill for legal services. Not surprisingly, those who escape from “Lawyer Island” shove off in their dinghy and vow never to return.
Here’s the good news: most real estate attorneys bill at a reasonable and competitive level, and our charges for professional services are typically structured as flat or finite fees. This means that the client doesn’t get a bill at the end of the process, they receive a quote for legal services at the beginning of the process. And unless there have been extraordinary or unforeseen developments along the way, the quote should be honored at the closing.
I practice law in the Metropolitan Boston area, and the typical cost to represent a buyer or seller in a real estate transaction can range from $500 – $1,000. It’s money well spent.
Try to separate past traumatic experiences with lawyers from the real estate transaction you are contemplating. Often times lawyers only complicate things, I’ve seen it myself. But when buying or selling real estate the smart money is on retaining an attorney to demystify a process that is foreign to most people, certainly people who haven’t bought or sold a lot of real estate.
These closing thoughts are in no particular order of importance.
Avoid hiring “the dabbler” to help you buy or sell real estate. “The dabbler” is the attorney whose practice is 1% real estate and 99% everything else, the attorney that tries to land one or two real estate deals per month for “cash flow.” A better strategy is to retain an attorney who specializes in real estate matters. My practice, just as an example, is 99% real estate and 1% everything else. And in twenty years as a practicing lawyer, I have handled thousands of real estate transactions and I think that I’ve seen just about everything that the marketplace has to offer.
Trust your attorney, be honest, and try to relax. Every lawyer has had one or more painful experiences dealing with a difficult client – it isn’t a one way street. And the experiences that haunt me are those where clients have brought mistrust, dishonesty or needless anxiety to an already-complicated process.
It’s imperative that a client trust their attorney. If that trust isn’t there, disengage your attorney and find a new one. Crooked maneuvering in a real estate transaction gets buyers and sellers sued and their lawyers disbarred – honesty is still the best policy, not just in real estate but in all things. Finally, modern society seems to have most people in a constant state of angst. In the end, it’s counter-productive to bring needless worry to this process. My advice is to hire a fundamentally-sound attorney, trust their judgment, do what is asked from you within the bounds of reason, be an honest broker, and deal with the brushfires as they crop up and not before.
Buying or selling real estate is like a sporting contest, where you must assemble a “team” and – as with sports – the object of the real estate game is to win. Winning requires that you put together an all-star lineup which includes a realtor, a home inspector or contractor, a banker or mortgage consultant, a tax professional, and a real estate attorney. Like with any sporting contest, you might not realize who your “Most Valuable Player” is until the game is over. In my experience, second perhaps only to the realtor, the attorney is often the unheralded MVP who gets his or her team over the top when it’s all on the line. Make sure that when you are buying or selling real estate you have a good lawyer in your lineup, you just may need them.
by Leonard W. Foy III, Esquire
October 28, 2014