Using a Lawyer
The real estate purchase agreement you sign is a legally binding contract between you and the seller. If you have any questions about the legality of your contract, get a lawyer on your team immediately. No one else on the team is qualified to give you legal advice.
The following factors determine whether you need a lawyer on your team:
- The location of your property: Your agent will know the role that lawyers play in your particular locale.
- The complexity of your transaction: You need a lawyer if you get into a complex financial or legal situation that can't be covered by the type of standard contract mentioned earlier. For example, suppose that you want to hold title as a tenant-in-common and are buying a partial interest in the property.
- If consulting an attorney will help you sleep at night: You may have the world's easiest deal. Still, if you feel more comfortable having a lawyer review the contract, your peace of mind is certainly worth the cost of an hour or two of legal time.
Choosing among lawyers
If you decide that you need a lawyer, interview several before making your selection. A corporate attorney or the lawyer who handled your neighbor's divorce isn't the best choice for your real estate team. Get a lawyer who specializes in residential real estate transactions. Good agents and brokers are usually excellent referral sources because they work with real estate lawyers all the time in their transactions.
A good lawyer has the following characteristics:
- Licensed to practice law in your state. Is local talent: Real estate law, like real estate brokerage, not only varies from state to state, it also changes from area to area within the same state. A good local lawyer knows local laws and has working relationships with people who administer them in your area.
- Has a realistic fee schedule: Lawyers' fees vary widely. A good lawyer gives you an estimate of how much it will cost to handle your situation. Seasoned lawyers generally charge more than novice lawyers, but seasoned lawyers also may get more done in an hour than inexperienced lawyers can. A low fee is no bargain if the novice is learning on your nickel.
- Has a good track record: If the lawyer you consult thinks that your case may go to trial, find out whether that lawyer has courtroom experience or intends to refer you to another lawyer. Always ask about the lawyer's track record of wins versus losses.
- Is a deal maker or a deal breaker (whichever is appropriate): Some lawyers are great at putting deals together. Others specialize in blowing them out of the water. Each skill is important. Depending on whether you want the lawyer to get you out of a deal so you can accept a better offer or need legal assistance to keep your deal together, be sure that you have the right type of lawyer for your situation.
- Speaks your language: A good lawyer explains your options clearly and concisely without resorting to incomprehensible legalese. Then he or she gives you a risk assessment of your options in order to help you make a sound decision. For example, the lawyer may say that one course of action will take longer but will give you a 90 percent chance of success, whereas the faster option only gives you a 50/50 chance of prevailing.
Working well with your lawyer
Whoever said that an ounce of prevention is worth a pound of cure must have been thinking of lawyers. A two-hour preventative consultation with your lawyer is infinitely less expensive than a two-month trial.
Good lawyers are excellent strategists. Given adequate lead time, they can structure nearly any deal to your advantage. Conversely, if you bring wonderful lawyers into the game after the deal is done, all they can do is damage control. The best defense is a good offense.