realtor vs lawyer when selling a home

Compared to a residential property, the stakes are much higher, and the rules are much more complicated. And if negotiations do get tough, a commercial real estate attorney simply carries more weight at the negotiating table than a real estate agent.

Full Answer

What does a real estate attorney do when selling a house?

Real estate attorneys help oversee home sales, from the moment the contract is signed through the negotiating period (aptly called the “attorney review”) to closing. A seller’s attorney reviews sales contracts, communicates terms in a professional manner and attends closings to prevent mishaps.

What is the difference between a real estate lawyer and a lawyer?

A real estate lawyer has the training and experience to handle an array of complex issues, from reviewing documents to representing your interest at closing. Another major difference is in their payment structure.

Should I use a realtor to sell my house?

If you have some experience with real estate, you might feel equipped to sell your own home and cash in on the savings of not paying a Realtor. Going the “for sale by owner” or FSBO route can be a great option for some sellers, but it’s not for everyone.

Do I need a lawyer when buying a house?

While lawyers typically charge a few hundred dollars an hour, a brief consultation with a lawyer is generally the way to go. It's much better for a buyer to obtain true legal advice than to try to squeeze it out of their agent just because they don't want to pay a lawyer.

How much does a real estate attorney cost?

Real estate attorneys cost $150–350 per hour, and usually bill in six minute increments. Or, they may charge a flat fee for certain services. Costs...

Should I use a real estate attorney if I'm selling FSBO?

Unless you're an experienced seller, you should hire a real estate attorney to prepare the purchase agreement and other documents when you sell FSB...

How do I find a real estate attorney?

A great real estate agent can refer you to a great real estate attorney. You can also find real estate lawyers through professional organizations l...

Comparing Agents to Attorneys in Real Estate Transactions

Do you know how real estate agents compare to attorneys in regards to what they can do for home sellers or buyers? When selling or buying property, it’s always best to rely on the experts, especially when it comes to legal paperwork, tax documents, and other vital processes.

Real Estate Agents

A real estate agent guides you through the entire process of selling or buying your property.

Real Estate Attorneys

In 21 states, the buyer must bring a real estate attorney to closing. Some states require both buyer and seller to have legal representation. In the remaining states, you can buy or sell a property without legal representation, and a real estate agent will suffice.

How much do real estate attorneys make an hour?

Unlike real estate agents, lawyers are paid on an hourly basis, and therein lies the biggest drawback of hiring a real estate lawyer in the purchase of your home — attorney's fees can range from $175-$400 per hour.

What do homebuyers do instead of buying agents?

Instead of (or in addition to) buying agents, homebuyers may also employ real estate attorneys to represent their interests in the purchase of a home. Attorneys are experts in real estate law and can provide guidance on legal issues that may arise.

Why do you need a buying agent?

It's a relief and an assurance to have an agent who will walk you through the process and look out for your interests. A buyer's agent can be very helpful in hiring home inspectors, negotiating over who will pay for repairs, finding listings, and other matters which are everyday activities for agents but may be foreign to most homebuyers.

How do real estate agents get paid?

How Buying Agents Are Paid. In a typical arrangement, real estate agents are paid through commission — generally around 5% of the home's purchase price. In the common two agent situation (the seller's agent and the buyer's agent), the agents split the 5% and the commission is paid by the seller. Some buyers prefer to pay commission to ...

What is the job of a real estate agent?

Almost all sellers have seller's agents, whose job is to get the very highest price for the property. By working with a buyer's agent, buyers gain knowledge of the industry and familiarity with the particulars of a neighborhood, sellers, contractors, etc. Some states require the use of buying agents to ensure fair dealing between buyers and sellers.

Why do you need an attorney to review a contract?

Attorneys can be very useful in reviewing contracts. Particularly if you are purchas ing a home without a buying agent, you should have an attorney review the real estate contract to make sure that you will not be subject to terms that unfairly favor the seller.

Why do people hire real estate agents?

Buying a new home will likely be the largest and most significant investment of your life, which is why many people choose to hire a real estate agent to assist in the search and negotiate on their behalf. But it is often a good idea — and sometimes necessary — to also work with a real estate attorney.

Why do I need a real estate attorney?

Many experts argue that one of the best reasons to hire a real estate attorney is that they’re the only party who isn’t working on commission – meaning that , since they don’t have a financial stake in the final sale price of your home, they’re the only truly neutral third party.

Why is a real estate attorney important?

A good real estate attorney provides a backstop for your real estate agent, finding loopholes in the purchase agreement, saving you money with contingencies, and maybe even insulating you from lawsuits years down the line. Let’s go over some of the situations where hiring a real estate attorney is a good move, the responsibilities ...

How much do real estate attorneys make an hour?

Real estate attorneys are paid by the hour — market rates are between $150 and $350. You may be able to negotiate a flat rate, or a cap on the number of hours they work on your behalf.

Why do agents work on commission?

Works On Commission. Because most agents work on commission, they make more money the higher the final sale price goes. That’s great if your priority is extracting every possible dollar from your sale. But sometimes sellers just want a quick sale, or want their property to pass onto someone who appreciates it.

What are the benefits of being an agent?

A great agent doesn’t just help you buy or sell a property; they also offer a sympathetic ear, gentle advice, and all around emotional support. A huge financial transaction can be a huge source of stress, and a good agent knows how to reassure their clients.

Is a realtor a negotiator?

Real estate agents may be skilled negotiators, but their leverage is limited. An attorney wields the threat of litigation, which is expensive and, if the other party is in the wrong, potentially disastrous. That means they wield significant influence in any negotiation.

Do I need a commercial real estate attorney?

This isn’t the case when it comes to commercial real estate . Commercial real estate deals are much more complicated and risky, and there’s usually a lot more money involved, so hiring a commercial real estate attorney for a commercial transaction is basically required.

How much does a lawyer charge for a consultation?

While lawyers typically charge a few hundred dollars an hour, a brief consultation with a lawyer is generally the way to go. It's much better for a buyer to obtain true legal advice than to try to squeeze it out of their agent just because they don't want to pay a lawyer.

Can a buyer's agent give legal advice?

Remember this: It is not that the buyer's agent does not want to help, it's that they can't give legal advice. Additionally, if they violated the law and expressed a legal opinion, a buyer could not rely on it anyway.

Can a real estate agent answer legal questions?

Real estate agents are not licensed to provide legal advice and cannot answer legal questions, even if they know the answer, without breaking the law. It's much better for you as a buyer to get true legal advice than to try to squeeze it out of your agent just because you don't want to pay a lawyer.

Can a real estate agent sue a buyer?

However, real estate agents can't advise a buyer to sue the seller nor guarantee the deposit will be returned. If the agent knows the buyer's deposit is at risk, they might share a few situations about the way their past clients handled these matters.

Can a real estate agent answer a legal question, even if they know the answer, without breaking the law

On the other hand, real estate agents are not licensed to provide legal advice. This means they cannot answer a legal question, even if they know the answer, without breaking the law. Note. An agent could potentially lose their real estate license if they tried to practice law.

Can a real estate agent sue a buyer for a return of earnest money?

However, real estate agents can't advise a buyer to sue the seller nor guarantee the deposit will be returned.

Why do you need a real estate agent?

One of the best reasons to hire a real estate agent is that the sellers are likely to use their own agent— and you want to keep that agent from taking over the process. In fact, the seller's agent might pressure you to let him or her represent both seller and buyer, in a " dual agency " relationship that primarily benefits the seller.

Is a real estate agent required to be a lawyer?

What the Law Says. Every state has its own set of real estate laws. For the most part, a real estate agent's help is not legally required, though agents can help you with tasks that border on legal ones, such as preparing a home purchase contract. In a few states, however, such as New York and Massachusetts, only a lawyer is allowed to prepare ...

Can a real estate agent answer a legal question?

However, legal issues might arise that your real estate agent can't answer. In that case, you'll need an attorney's help. Although good agents know a lot about the negotiating and contracting part of the process, they can't make judgments on legal questions. For example, what if your prospective new home has an illegal in-law unit ...

Do you need an attorney to buy real estate?

Except in states where it's mandated, an ordinary real estate transaction doesn't require an attorney's help. By now, real estate transactions are so standardized that most people in your state will use the exact same purchase contract, just filling in a few blanks.

Do not sell personal information?

Do Not Sell My Personal Information. It's no secret that real estate agents earn high commissions. Although the commission is usually paid by the seller, the cost may be indirectly passed on to you. And real estate lawyers charge exorbitant hourly rates.

Can a lawyer close a title search?

In a few states, however, such as New York and Massachusetts, only a lawyer is allowed to prepare the home purchase documents, perform a title search, and/or close the deal.

Do real estate agents get paid?

Real estate agents normally work on commission, not salary. They receive their slice only after your home search is over, the contract negotiated, and the transaction complete. (In many cases, they end up doing a lot of work for nothing, perhaps because the buyers lost interest or can't close the deal.)

What is real estate lawyer?

A real estate lawyer is trained to handle these problems and has the most experience to deal with them.

What happens if you are the only person in the US without a lawyer?

If you are the only person there without a lawyer, your rights may be at risk.

How to avoid problems with a home purchase?

Avoid Vague or Unclear Terms. A lawyer can help you avoid some common problems with a home purchase or sale. For example, a seller may sign a brokerage agreement that does not deal with a number of legal issues. This happens quite often as realtors often use standard forms, expecting that they will cover all situations.

What to do if a lawyer is not needed during the negotiation process?

Even if a lawyer is not needed during the course of negotiations, both the buyer and seller may want to consult with a lawyer to answer important legal questions, such as the tax consequences of the real estate transaction. The tax consequences may be of critical importance to a home seller.

What is the purpose of an attorney when signing a deed?

Once the deed and other closing documents are signed, an attorney can make sure that these documents are appropriately executed and explained to everyone.

What can an attorney do to help with title insurance?

Assuming you are in an area where title insurance is customary, an attorney can help review the title search and explain the title exceptions as to what is not insured. They will also determine whether the legal description is correct and whether there are problems with adjoining owners or prior owners.

Does a title search tell you about zoning?

The title search does not tell the buyer or seller anything about existing and prospective zoning. A lawyer can explain whether zoning prohibits a two-family home, or whether planned improvements violate zoning ordinances.

What is a real estate attorney?

Real estate attorneys help oversee home sales, from the moment the contract is signed through the negotiating period (aptly called the “attorney review”) to closing. A seller’s attorney reviews sales contracts, communicates terms in a professional manner and attends closings to prevent mishaps. Selling a home is a complex process ...

Why do you need an attorney for real estate?

An attorney helps you protect your investment and assets while ensuring you’re conducting your side of the transaction legally — which can prevent costly missteps. Real estate attorneys are required in many states, but even if you aren’t legally required to use an attorney while selling, it can be a good idea.

How much does a real estate attorney charge?

How much does a real estate attorney cost? How much you’ll pay for real estate attorney fees depends on your market and how involved they are in the transaction, but they typically charge a flat rate of $800 to $1,200 per transaction. Some attorneys charge hourly, ranging from $150 to $350 per hour.

What to do if you inherited a home?

An attorney can help you navigate the complexities. Estate sale: If you inherited the home you’re selling, hiring an attorney to sort through ownership documents can ease the burden, which is especially helpful when you’re grieving the loss of a family member.

Who hires an inspector to inspect a house?

Inspector: The inspector is hired by the buyer. Their job is to make sure the buyer knows about everything that may need to be repaired on the home. Sellers also sometimes hire an inspector to do a pre-inspection so they can make any necessary repairs before putting the house on the market.

Do you need an attorney for a closing?

In 21 states and the District of Columbia, attorneys are legally required as part of the closing process. Attorney-required states include: As a best practice, if the other party in your transaction has a lawyer representing them and supporting their best interests, you should too.

What to do if you have never read a home inspection report?

If you’ve never read a home inspection report or a home sale contract, you may quickly find yourself in over your head. And you’ll want to make sure you’re prepared to manage the many tasks that go into selling a home solo. Stage your home for less: Experts told us how to stage a home on a budget.

Do real estate agents know the value of a home?

Many real estate agents have a pretty good understanding of your home’s true market value, but you may not . Objectivity also comes in handy when buyers are viewing your home, since they’ll have plenty of questions and requests and naturally, complaints.

Is selling a home a job?

Selling a home is a lot of work. “Most people who sell their own home are trying to avoid paying the commission,” says Maria Quattrone, CEO of Maria Quattrone & Associates at RE/MAX @ HOME. “But it’s a full-time job to list, sell, negotiate and close on a home, especially when it’s not your area of expertise, and time is money.”