It's true - the Residential Real Estate Market is booming right now, and it seems like a great time to get in on the action. But there are a number of legal pitfalls you need to make sure to avoid in the rush to get to closing. Whether you are buying or selling, hiring an Attorney is a necessity in today's market. Below are just a few reasons you should be sure to hire your own legal counsel.
Realtors are not lawyers. Any good Realtor or Real Estate Agent will agree with this and suggest that you hire a lawyer. Agents provide an incredibly valuable service, but it is completely different from the service provided by a qualified Real Estate Lawyer. Agents can not give you legal advice - they are prohibited from doing so, but, more importantly, they simply don't have the knowledge to advise you properly. While a real estate transaction may seem like a simple process, the truth is it is filled with minute details that only a real estate attorney - not a real estate agent - is trained to detect and correct before they become larger problems.
The Legal Risks are Real. Every Real Estate lawyer has horror stories of transactions that were closed without a Real Estate Attorney. These cases show up on their desks often years later when the mistake comes to light and the client needs it corrected.
In my own practice, one of the worst mistakes I've come across came to light only when the owner tried to sell his property. After ordering title, I noticed that only one-half of the property had been deeded to the client when he initially purchased the property. His Deed was prepared by a firm that will prepare just a Deed for a very cheap price. They do not review title or any other documents associated with the transaction, and they generally do not have an Attorney actually review the Deed that is prepared by staff.
In this case, the property actually consisted of two separate lots, and the Deed to my client only consisted of one of the lots. The client had owned the property for close to twenty years, and the original owner was no longer living. That meant that, by law, that parcel was now legally owned by her children. There were five children, one of whom had died, leaving four children (grandchildren to the original seller). This meant that there were eight different individuals that we had to track down and convince to sign a new deed. This took months, and cost the client significantly more money than if he had hired a Real Estate Attorney to handle the full transaction at the outset.
The best legal bang for your buck. Any practicing Real Estate Attorney can tell you that the absolute best value you get for your money when hiring an Attorney is when you hire an Attorney to handle the sale or purchase of your home.
Most transactions are handled at either a flat rate, or a reduced hourly rate. For example, our Firm handles real estate transactions in Ogle, Lee, Winnebago and Boone Counties for a flat rate of $750.00. We handle transactions in McHenry, Lake, Will and DuPage Counties for a flat rate of $1,000.00. I know other Attorneys that discount their regular hourly rate by anywhere from 25% to 50% when handling a residential transaction.
For those rates, the usual services include:
- Review of the listing agreement with the broker if requested prior to its execution;
- Review of the initial Contract and preparation of an attorney modification letter, changing any terms of the contract that are unfavorable or that could cause problems down the road;
- Preparation/Review of the seller’s Residential Disclosure Statement, which, if not prepared properly, can open you up to liability long after the house is sold;
- Ordering the Title Commitment (sellers), examining the condition of title prior to closing (sellers and buyers) and overseeing the removal of all title objections prior to closing (sellers and buyers);
- Communicating with you and other parties with regard to extensions that may be required, such as for mortgage approval;
- Preparation of the seller’s closing documents, ordering surveys and mortgage payoff letters from your lender(s) (buyer), and reviewing the final closing statement showing adjustments to the sales price, your closing expenses, and the distribution of proceeds at the closing; and
- Scheduling and attending the closing, and reviewing all closing and mortgage documents for your understanding.
While those costs are not insubstantial, the amount of work and peace of mind you are getting for those rates are a substantial value.
How do you know who to hire? First of all, do not hire an Attorney just to prepare the "Deed and Green" or "Deed and PTAX" unless they agree to review all of your documents and be available at the time and date of the closing to address any problems that come up. Your best bet is to hire an Attorney to handle the full transaction from offer to closing.
Second, look for an Attorney that handles a fair number of Real Estate transactions as part of their practice, and who has at least a few years of practice under their belt. Look for membership in relevant Associations, such as the Illinois Real Estate Lawyers Association. Do not be afraid to ask pertinent questions such as:
How many years have you been practicing in Real Estate?
Do you usually handle Residential transactions (vs Commercial)?
Do you represent Sellers, Buyers, or both?
Do you belong to the Illinois Real Estate Lawyers Association, or any other Real Estate Lawyers Associations to keep up with the law?
(If you are meeting with an Associate Attorney) Do you have a Senior Attorney that you can turn to if you have any questions or you come across something you haven't handled before?
Third, skip the search and hire Berger Law Firm. We have over twenty years of experience handling Residential Real Estate transactions across Northern Illinois. We regularly represent both Buyers and Sellers to ensure a smooth transaction. Attorney Berger is a member of the Illinois Real Estate Lawyers Association, and frequently attends Continuing Legal Education to stay up-to-date with the changing real estate market. We are also Title Agents with Attorney's Title and Guarantee, and can provide title services and closings at multiple convenient locations throughout our coverage area.
UPDATE: Berger Law Firm, LLC adds new Algonquin location! To help better serve our Real Estate clients in McHenry and adjoining Counties, we have added an additional closing office in Algonquin, IL. This location will be dedicated to serving our Real Estate clients for quicker transactions and a greater availability of dates and times for closings.