Do I really need an attorney for my real estate purchase or sale?
It is critical for you to be properly represented in what is likely one of largest, and perhaps most important, purchases of your life. The growing trend, however, is to use a ‘title closer’ to accomplish the various tasks associated with a closing – collecting escrows, preparing settlement statements, etc. This is a dangerous proposition because title agents are not allowed to practice law.
What is the danger?
The best way to explain it is perhaps through example. One of our clients is purchasing a home in a nearby town right near the water, but across a road. The owner/contractor purchased the property at a mortgage sale and thought there could be no riparian or tidelands issues due to the location beyond a roadway relative to the water. When sellers purchased, their title search clearly showed that the State of New Jersey had a 100% claim on the property due to its location way behind the “tideline”. Because they were not represented and did not understand the importance of this and because their title company could not or did not explain it (they are not “allowed” to practice law or give legal advice), the issue was never resolved. When our client discovered this claim, the sellers were forced to apply to the State for a “Statement of No Interest”, which takes a course of months. Sound complicated and annoying? Yes, you are correct! Luckily, we were able to work with the sellers and title company to come to a resolution, but a significant amount of the sellers’ closing proceeds are being escrowed for months.
What do lawyers do when they represent you in a real estate deal?
Negotiate contract terms during attorney review – these include inspection rights and deadlines for mortgage financing.
Order and review title to make sure the seller owns exactly what you believe you are purchasing without encroachments, easements, liens, or other claims clouding title.
Track all critical deadlines, particularly when mortgage brokers and banks are involved.
Coordinate a “buy/sell on the same day” scenario and prepare “Use and Occupancy” agreements should you need to stay in your home beyond the closing date or move into your new unoccupied home before closing.
Draft and review your transfer documents (Deed, Affidavit of Title, etc.).
Identify tax issues (such as when selling vacant adjacent land) and consult with the proper professionals.
Ensure the settlement statement accurately reflects payments and monies due.
Advocate for your interests throughout the process.
Hold your deal together through ongoing negotiations.
Negotiate a safe escape if the deal is terminated.
Thinking of buying or selling real estate?
An attorney is there to protect your investment and to act in your best interest. The average home in Monmouth County is valued over $500,000. Most attorneys charge $2500 for a closing, or less than .5 percent. The high-impact potential of a mistake or oversight when buying or selling real estate far outweighs the cost of hiring an attorney who will ensure a positive outcome with one of the biggest investments of your life.