When you’re nearing the end of a real estate negotiation, every decision you make counts. If you’ve paid attention to the cycles and patterns in real estate, then this transaction will hopefully have positive implications for you. However, navigating this process alone is difficult, even for landlords who have spearheaded similar deals in the past. A top-notch residential real estate attorney can help you maximize the potential of your deal— but only if they’re the right fit.
What is a Real Estate Attorney’s Role in the Closing Process?
The basic role of Real Estate Attorney in a residential real estate closing is to carry out the deal negotiated by the client. There are three basic components to this service:
- Reduce the client’s deal to writing in the Contract of Sale
- Describe to the client what the key terms of Contract of Sale means
- Ensure that the transaction occurs in accordance with those terms, and if not, to extricate the client from the transaction with minimal damage
Those are the basics, but what is it that makes a real estate attorney a critical component member of your team if you are buying or selling residential real estate?
It’s Primarily About Loyalty
Among the many participants in a residential real estate transaction, there is only one participant who is truly acting on your behalf – that is your real estate attorney. By virtue of the various New York licensing laws, rules and regulations, real estate agents, mortgage brokers, title representatives and home inspectors all have an obligation to conduct themselves professionally. But, only your attorney has the duty of undivided loyalty to you, the client. This is a timeless principle that often gets lost in the fast-paced, mortgage bank-dominated nature of the modern residential real estate transaction.
Selecting an attorney who solemnly adheres to this principal will ensure that you never second guess whether your best interests are being represented. Almost everyone else involved in the transaction only receives their fees if you close the deal. So, doesn’t it seem wise to have someone who will advocate on your behalf even if closing is no longer in your best interests?
It’s Also About Undivided Loyalty
The participants in a real estate transaction largely rely on referrals from others in the real estate industry for their business. How did you come to know the real estate agent, mortgage broker, home inspector and attorney? More likely than not, these people were referred to you.
With your attorney, it is fair to ask how much business they get from referrals? To what extent does he or she rely on the referral of business from the realtor or mortgage broker in your transaction? If it is significant, will that attorney be willing to take a position in your favor and possibly to the detriment of that referral source?
At the very least, an attorney referred to you from a real estate broker, should have a conversation with you about this potential conflict of interest. That attorney should absolutely make you comfortable that their loyalty lies solely with you. If that is not possible, then it might be best to find an attorney on your own and not through a referral. If this is the case, then you can have 100% confidence that your attorney has absolute undivided loyalty to you.
What About Competence?
From a legal perspective, residential real estate transactions seem very straightforward. Any attorney who has handled a few closings can manage most deals. However, looking a little deeper, every transaction is rife with issues that are often unseen to the untrained eye.
In this respect, a residential real estate transaction is a lot like a frozen lake upon which you must skate from one side to the other to complete. Anyone with reasonable skating skill can skate across with little to no assistance. Only someone with experience, however, knows where the rough patches lie or what lurks beneath, and which areas have the potentially deadly thin ice and deep water. Similarly, any attorney with basic real estate closing skills can get you through a deal – a little luck and a little less skill, and you’re done.
But only an attorney who has hundreds or thousands of closings under their belt, has dealt with the tough issues and litigated the deals that have gone bad can truly give you the best shot at making it through unscathed. In selecting an attorney to represent you, the basic question as to how many closings that attorney completes every year is a good starting point. More importantly, you should know how many transactions did not close, and why? Does the attorney have experience dealing with the difficult issues (i.e rent to own deals, landlord-tenant problems, advising on the correct deed form, short sales, estate and probate issues) that inevitably arise, and how were they handled? Also, has the attorney ever been involved in going to court to litigate deals that fell apart, and what did that attorney learn from those experiences?
Asking these questions will help you determine if you are dealing with an untested novice or a battle-hardened advocate. Which would you rather handle what could be the biggest investment of your life? This type of experience doesn’t matter until it does. It doesn’t cost much more for this type of additional experience, but you might find that it could be priceless.
Long Island Real Estate Lawyer
Navigating the real estate closing successfully can set the stage for high cash flow. Hiring a real estate lawyer that can help you maximize this potential is critical. As a real estate attorney who has advocated on the behalf of many landlords, Jim Clark has the knowledge and experience to make a difference in your real estate closing.
Legal disclaimer: IMPORTANT LEGAL NOTICE: This post is not legal advice does not create an attorney-client relationship. This and all posts on this website are intended as general information, and are provided for educational purposes of the public, not any specific individual. If you would like to obtain specific legal advice about this issue, please contact an attorney in your state. Mr. Clark is licensed to practice law in New York.