Buying a home will be one of the most important decisions of your life. It will involve not only a large sum of money but also the intricacies of real property law. This makes a home purchase stressful, and without professional guidance, things can quickly go wrong. Hiring a buyer’s agent will overcome many of these hurdles, but a real estate attorney is just as vital and, in NY State, mandatory.
Why you need a real estate attorney
Each state has its own set of real estate rules. For most of them, a real estate attorney is not required. New York State though is one of several in which law requires their physical presence in a real estate transaction. A broker can help you with a lot of tasks that border on legal areas, but only an attorney is allowed to prepare the home purchase documents, perform due diligence, a property title search and close the deal.
Even if it weren’t a requirement, you’d still want to have one. Real estate transactions can be complicated and involve a significant amount of paperwork and interested parties. If something goes wrong and legal issues arise an attorney will be needed to sort things out.
What can a real estate attorney help with?
In a typical home purchase, the buyer or buyer’s agent either finds or is found by a real estate broker representing the sellers. A tour of the home is scheduled, completing a comparable market analysis, negotiations are handled through the broker(s) and once an agreement is reached buyer and seller enter into a legally binding contract of sale. If the buyer is taking out a mortgage, a title search will be done to satisfy the lender. Finally, the property title is transferred, and money is exchanged.
Summarized like this a home purchase seems pretty straightforward but many things can go wrong. If something does and a lawyer isn’t present the results can be disastrous. Your real estate attorney will be there to handle any legal disputes and ensure the transaction goes smoothly. Among other things, a real estate attorney will be responsible for the following:
Attorney Services Rendered
- Compiling Legal Documents – some documents can only be drawn up by an attorney. Probably the most important is the contract of sale. If the buyer has any special requirements or problems are found in the home inspection, or later the purchase agreement has to include provisions for this.
- Reviewing Documents – there will be a lot of documents going back and forth. The attorney is there to review each one for vague language and unclear terms that can create legal problems. If you need to sign something have your attorney look it over first.
- Provide Consultation – property law can be dense and be intimidating for the uninitiated, even for brokers. A real estate attorney can provide consultation and advice for essential questions. For instance, what the tax consequences of a transaction would be.
- Conduct Due Diligence – in NYC, due diligence is conducted before the property goes under contract. Your attorney will review the building financials, board minutes and look into whether there are any outstanding liens against the property. Additionally, if any defects could mean a price reduction and all else that could affect the sale of the property including the potential increase in common charges/maintenance costs.
- Title Search – after a purchase agreement is signed the state of the seller’s title to the property must be established. An attorney will either do this or review the title abstract or title insurance commitment.
- Close the Sale – at the closing, the deed and other closing documents must be drawn up. Both attorneys, from the buyer and seller, must be present for this. They’ll explain the nature, amount and fairness of the documents and closing costs. There may also be last minute disputes which your attorney will handle and ensure your rights are protected.
If you feel peeved that hiring an attorney is a legal requirement in NYC for a home purchase, don’t be. They ensure a much smoother transaction and help to solve the legal disputes that are almost guaranteed to happen.