The importance of an attorney in real estate deals

attorney

Engaging the right attorney helps you avoid costly mistakes in real estate deals. Especially if you start working with the attorney before things go wrong. There are several types of attorneys you may want to engage, depending on what you’re buying and what you want to do with the property.

Here are a few situations where you may benefit from the help of an attorney — and the type of attorney you should look for.

Contract development and execution

Your real estate agent’s standard contract is usually good enough to complete a single-family home sale. But commercial deals are more complicated.

They require more contractual stipulations, contingencies, and may involve partnerships or 1031 exchanges. In this case, it makes sense to engage an experienced real estate attorney.

He or she can help you put together a contract with several outs in case the deal doesn’t meet your requirements. If you have an out, you can rescind your offer without the possibility of a legal dispute. An attorney can also help you negotiate through the process and avoid disputes.

Attorneys for these types of services charge by the hour and can run from $307 to $615, according to the Justice Department’s Laffey Matrix. It depends on your attorney’s level of experience and the market you’re in.

You can also use a standard contract or put one together yourself and pay an attorney to review it. This may cost just a few hundred dollars.

If you’re in doubt, many lawyers offer free consultations. Use one to talk through service offerings and get an estimate.

Due diligence

If you plan to buy or sell a multifamily, retail, office, industrial, land, or mixed-use property, you may want to engage a land use or real estate attorney to help you conduct due diligence.

A land use attorney will tell you what’s legally possible to do with the piece of property you’re buying. They’ll know the details of zoning, permitting, and restrictions. This can be critically important for raw land that could have building restrictions you don’t know about. For commercial properties, they’ll know about tenant restrictions in zoning regulations.

If your project requires a special variance, exception, or change in use, a land use attorney can facilitate that process for you. Doing so can be extremely cumbersome for non-experts.

If you’re buying an apartment building, a general real estate lawyer can help you collect and evaluate information from the seller. This includes things like:

  • tenant Estoppel certificates;
  • copies of bank records, utility bills, and tenant payments; and
  • service and maintenance records.

The costs for these attorneys vary. In large markets, they could top $600 per hour. When interviewing attorneys, ask them about challenging projects they’ve worked on. Ask what the outcomes were, too. And get an estimate of how much the total project or process will cost.

Title and closing fees

You don’t need an attorney to conduct your title search or hold your escrow funds in many states. But many title companies have at least one attorney on staff to help. They may be needed if there’s an encumbrance, hindrance, or other legal issues on the title that need to be untangled.

In some states, title and escrow agents are bonded, licensed, and regulated. A title insurance policy protects against defects not caught during the title process. The title agent issues a valid title insurance policy and distributes funds.

Title search and settlement fees vary from a few hundred dollars to over $1,000. Title insurance policy premiums run about $1,000 for an owner’s policy, according to Realtor.com.

If you’re financing a property, your lender will likely require you to buy a title insurance policy that protects their interest. This policy is usually cheaper because the policy’s value goes down as you pay down the mortgage.

Recording fees and transfer taxes

Jurisdictions require recording fees and transfer taxes to transfer titles. They vary in cost. While these aren’t legal fees, per se, they’re required by law.

Both items’ costs are usually determined by the sale price of the property. The rate in Florida for deed recording is $0.35 per $100, for example, and is called a documentary stamp tax. This fee is also charged for mortgages and liens based on the amount. In Florida, there’s a cap on the total documentary stamp tax at $2,450, but other states don’t have a cap.

In some states, both buyer and seller pay their own separate recording and transfer taxes. In others, the fees are split between the buyer and seller. In this case, you can negotiate during the contract execution process to have one party foot the whole bill. The buyer typically pays all recording and transfer taxes when buying bank-owned or distressed properties.

To estimate these fees, use online calculators from local title firms or websites like AnytimeEstimate.com.

Legal fees are part of real estate

Legal costs and fees can add 5%–10% to your purchase or sale price. But sometimes they’re unavoidable. Real estate is a highly regulated and highly taxed asset class, with many risks for novice and experienced investors alike. Good legal advice can help you mitigate these risks and save headaches, freeing up your time and energy to grow your portfolio.

Source: Millionacres

You May also Like this

real estate professionals
Things Real Estate Professionals ...

During this , social unrest and an upcoming election, a lot has...

Virtual Real Estate
Blockchain Technology to monetize ...

In the “real” world, has historically been seen as a viable investment....

brrrr
What is the BRRRR ...

If you're part of the business or plan on breaking into it,...

Macroeconomic
Macroeconomic Issues in Real ...

Understanding macroeconomic risk is critical to a successful strategy. While this form...

illiquidity premium
What is Illiquidity Premium ...

Illiquidity premium is the excess return an investor stands to earn in...

renewal
The procedure for the renewal ...

According to Section 1 of the , the law vests the ownership of...

pandemic
Post COVID-19 pandemic and ...

Adapt. Innovate. Accelerate. This is the mantra for any business right now...

Real Estate Wholesaling
Real Estate Wholesaling Pros ...

wholesaling is a kind of arbitrage in which a party known as a wholesaler...

stamp duty
The new Stamp Duty ...

Taxes are one of the ways through which the Government generates revenue...

WFH
How Work From Home ...

Google has announced that it will continue with work from home (WFH)...

Investment Portfolio
Investment Portfolio Diversification in ...

Months after the onset of Covid-19, we continue to see its impact...

path of progress
What is path of ...

As a , you may have heard the term path of progress before. The...

Virtual Real Estate
Increase of Virtual Real ...

Prospective buyers getting their first glimpse of potential homes through smartphone cameras...

Property Managers
Operational Guidelines Property Managers ...

The pandemic crisis has thrown nearly all industries for a loop, and...

Commercial real estate
The Effect of the ...

The real estate industry is changing, a change that started before the...

Disruptive Real Estate
Disruptive Real Estate and ...

What do Google, Microsoft, Facebook, Twitter, Visa and American Express all have...

Post-Pandemic
Outlook of Post-Pandemic Commercial ...

The COVID-19 pandemic is having a transformative impact on (CRE) markets. The...

invest in real estate
Reasons you should Invest ...

Your current financial stability doesn’t guarantee that you’ll be free from financial...

Retirement
Real Estate Investments for ...

Real estate can be an incredible tool to help you prepare and...

Real Estate Industry
Tips to better understand ...

If you're looking to buy or sell property, it's important to have...

Real Estate Investment
Ways of getting involved ...

While many people get involved in real estate to generate a return...

value
How to assess the ...

If you’re investing in property, you’ll need accurate real estate valuations to...

Real Estate Investors
Guiding Principles for Real ...

While the national faces significant uncertainty right now, it's important to recognize...

Real Estate Investing
The largest benefits of ...

Real estate is one of the best possible ways to drive personal...

The Real Estate Market
How the Real Estate ...

If you're looking to buy or sell property, it's important to have...

Remote Working
Remote Working and its ...

Many ask if the remote working culture will be here to stay,...

buying and selling
Real Estate Buying and ...

EASTON — agents and their colleagues have adapted quickly to the new...

unstable market
Investing in Real Estate ...

The industry is filled with its share of ups and downs. In...

real estate investments
Real Estate Investments to ...

There are several types of real estate , but most fall into...

office space
Will the Pandemic make ...

A myriad of publications have already pronounced office space a trend of...

How the pandemic will affect Resident Demands in the future
How the pandemic will ...

The current pandemic and global response is a once-in-a-lifetime event that has...

real estate stock market
The effect of Real ...

Financial market commentators tend to focus on the price of bonds and...

digital asset
How Real Estate is ...

Yesterday, I had a call with one of my company’s larger customers....

Real Estate Agents
Ways Real Estate Agents ...

There is a reason companies like Tesla have such a loyal customer...

Operational Real Estate
The importance of Operational ...

New York, NY—With the shift towards buying an experience over buying a...

Passive Income
Ways to Earn Passive ...

Passive income is an important factor in building wealth and achieving financial...

millennials
The Future of Real ...

We've all seen studies on millennials circulating around the internet. As the...

land
Things to consider before ...

Looking to buy land to build your dream home? Land is the...

Angel Investing
Angel Investing versus Real ...

I’m often asked what my preference is when comparing angel investing to...

Bitcoin Investment
The comparison of Real ...

Two popular avenues, real estate and bitcoin, have been making waves in...

mortgage
How to find the ...

If you’re looking to buy a home or in a single family...

Reserves
The importance of Reserves ...

Private real estate affords investors considerable control over their , from how...

bundle of rights
The comparison of bundle ...

What is “,” really? Most people might say it's the land and/or...

Lagos State Real Estate Law
Laws guiding the Use ...

The regulatory bodies in real estate include but are not restricted to the following;...

Commercial Real Estate Tech
2020 Top Commercial Real ...

Deloitte’s 2020 Commercial Real Estate Outlook surveyed 750 owners, operators and investors in 10...

Mortgage notes
Guide on investing in ...

Most new investors in active real estate start with a traditional method...

real estate rehab
Stages of Real Estate ...

If you play your cards right, rehabbing houses can be very rewarding...

Multifamily
Investing in Multifamily Real ...

Millions of Americans depend on cash flow generated by long-term investment portfolios,...

ways to invest in real estate
Ways to invest in ...

There is a common misconception that real estate investing requires property ownership....

rental properties
Pros and Cons of ...

Many investors understand why they should invest in real estate for the...

urban regeneration
Planners urge Lagos State ...

Planners have charged the Lagos state government to do more detailed master...

Commercial Real Estate Technologies
Trending Commercial Real Estate ...

The commercial real estate industry has entered a new phase of technology...

Real Estate Location as a franchisee
Tips to secure the ...

Real estate site selection has the power to make or break any...

Remote Workers
How Remote Workers affect ...

As more people are able to work from home, housing priorities have...

5G Technology
5G Technology REITs

There is a revolution going on. You’ve probably heard the term 5G...

buyers
Questions Home Buyers should ...

Buying a home is one of the most expensive decisions you'll ever...

remodeling
Mistakes to avoid when ...

Americans are spending less on home renovations than they were at this...

Real Estate Market
Reasons for investing in ...

Are you thinking about purchasing your first piece of real estate? Investing...

real estate funds and REITs
Differences between real estate ...

Are you ready to invest in real estate? Real estate funds and real...

Agents and Brokers
Differences between Real Estate ...

Real estate transactions often involve significant amounts of money. As a result,...

real estate crowdfunding
Real Estate Crowdfunding Investment

Ask a rich person how they got rich, and there’s a good...

Investing Real Estate Market
Investing in the right ...

Investing in real estate is tremendously exciting, and can be very lucrative....

housing in Nigeria
FMBN to build 100 ...

Ahmed Dangiwa, Managing Director, Federal Mortgage Bank of Nigeria (FMBN), said the...

local real estate market trends
Factors that determine Local ...

Real estate markets trend between times of boom and bust, depending on a...

invest in real estate
Affordable ways to invest ...

Real estate can help diversify a portfolio. One way to grow your...

real estate digital finance
8 top concepts of ...

In all history there has never been a more profound era of...

appraisal services
Why you need appraisal ...

Real estate investing can be an excellent way to earn passive income....

Real Estate Investment
Determining your Real Estate ...

Malcolm Gladwell states that it takes 10,000 hours of practice to become...

real estate agent
12 Qualities in Selecting ...

Purchasing a home is a huge financial commitment, so finding the right...

National Urban Development Policy
Revision of the National ...

The long-awaited overhaul of the National Urban Development Policy (NUDP) has been...

Warehouse
Capitalizing on the Warehouse ...

Everyone knows that retail is evolving, and common thought says that retail...

Mixed-Use Real Estate
Benefits of Mixed-Use Real ...

In cities, mixed-use real estate is hidden everywhere. Someone likely lives above...

dead capital
Real Estate Dead Capital ...

PwC estimates that Nigeria holds at least $300 billion or as much...

Post your Comments

NAME *
EMAIL *
Website

error: Content is protected !!
%d bloggers like this: