A real estate attorney can serve a number of functions. Common examples include:
· Title work. A title search checks for issues that could hinder the transfer of ownership of property. An attorney can complete this search and help to resolve any potential legal issues discovered during the title search.
· Tailor documents to the transaction. These professionals will draft real estate contracts tailored to a specific transaction and better ensure the needs of their client are protected throughout (and after) the transaction.
· Loss mitigation. An attorney can serve as an advocate for those who struggle to make mortgage payments. This can include discussions about loan modification, short sales, and other ways to prevent foreclosure.
· Representation during closing. Whether the buyer or seller, legal counsel will represent your interests during the closing to help reduce the risk of any surprises during those last phases of the real estate purchase process.
Although the above list is clearly beneficial, it is still difficult to know when your transaction warrants legal counsel. The following key questions can help you decide if you need a real estate attorney.
#1: How complicated is this sale?
Some sales are more complex than others. If your target property has issues, it is often beneficial to hire a real estate attorney. Examples of issues that often benefit from this level of professional aid can include issues with the title, foreclosure, or concerns with zoning.
#2: Are the documents confusing?
Real estate transaction documents are complex legal agreements. Take the time to read them carefully to make sure that you understand what you are getting into. You can always have an attorney review the documents if you do not understand the contracts or if there seem to be some provisions that are not in your interest.
It is important to keep in mind that purchasing property is a negotiation. Do not be afraid to push back to ensure your interests are protected.
#3: Are you hoping to reap the benefits of 1031 exchange?
Real estate transactions are complicated. Add in tax law and the potential for error skyrockets. A mistake in the 1031 process can result in a denial from the Internal Revenue Service (IRS). It is important to move forward with a meticulous plan to better ensure you reap the benefits of this tax planning strategy.
#4: Are you purchasing property in a different state?
Those who are buying property in another state as a vacation home or second property can also benefit from an attorney. In addition to the benefits noted above, in this situation the presence of legal counsel can also help to better ensure you understand local laws and regulations and avoid potential legal issues.