Do I Really Need an Attorney?

My Attorney Bernie

No state will require you to hire an attorney. In fact, some states discourage the use of a real estate attorney. They think they clog up the process. But the truth is, sometimes the attorney you hire is the only person who is completely on your side during settlement. Whether you really need one depends on how familiar you are with the process and how difficult the deal is.

The Ounce of Protection

Real estate deals involve complex documents that can be confusing if you don't see them often. Having an experienced attorney on your side can help reduce some of the stress of going to settlement. Also, while an attorney won't get involved with the actual pricing of the home, he or she can help you negotiate terms and streamline the process.

Once you've made an offer on a house and it's accepted, you are tied to that house for the length of the contract. Sure, there are ways to terminate a contract. You could use one of your contingencies to declare the contract null and void. But that doesn't happen very often. Signing a purchase contract is a legally binding agreement between the two parties. Be sure you know what you're agreeing to before you sign. And, if you have any doubts, questions or concerns about the contract, do the smart thing and consult an attorney before the signing takes place, not after!!

Ways Real Estate Attorneys Can Help:

• They act as another layer to remove emotion from the deal.
• They can negotiate the finer details in your contract which can have huge impacts later in the process.
• They can protect you from getting a bad deal should negotiations get nasty.
• They work with brokers to organize and finalize details and terms that you may not understand fully.
• They can explain all the legal ramifications of a deal and help you negotiate a better deal.
• They may be able to get you a reduced fee from the title company.
• They track all the details of the deal to ensure a smooth closing.
• They normally provide a settlement book that contains all the necessary paperwork and documents involved in closing a house.
• They keep the deal together, making sure nothing is overlooked or missed.

Flat Fee, Percentage or By the Hour?

For the money, an attorney can be a welcome member of your investment team, so to speak. The cost-value question is whether to buy their services by the hour or by a percentage of the loan. There are divided camps on this. Some say a flat rate is best because you know what you are going to pay going in. Others say that hourly is best because it may be more efficient and less expensive. The choice is up to you. Talk to a number of attorneys to see what services they offer and try to determine the best payment structure for your budget. Some will compromise and offer an hourly rate not to exceed a certain amount. This could get you into trouble though, if the cap is reached before settlement.

If you look at the total amount you are spending on the loan, though. Spending some on an attorney who will help protect your interests seems wise.

Rules To Follow When Hiring An Attorney

• First. Always contact your attorney before you sign the contract. Plan ahead. This is where they can really help you.
• Second. Make sure they are available at odd hours, because many settlements take place on weekends or at night.
• Third. Make sure that if you are paying by the hour that there is a clear schedule of action and that you are always prepared for meetings so they can go quickly.
• Fourth. Look for attorneys who work well with brokers. Not all do.
• Fifth. Don't choose your attorney on the seller or seller broker's recommendation alone. You want someone who is impartial to the deal and aligned with you.

Next, Terms to Know

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