When and How to Hire a Real Estate Attorney
It’s not uncommon to purchase residential real estate without hiring a real estate attorney. However, there are situations in which real estate investors will want to consider consulting an attorney.
Residential real estate transactions are often straightforward, but they can become more complicated in situations where properties are being purchased for investment purposes.
For example, as an investor, you may be purchasing multiple properties as part of one transaction, buying “distressed” housing that has been foreclosed, buying fixer-uppers that come with inherent risks, or buying properties with tenants in place who are receiving governmental rental assistance (Section 8).
You may have concerns about deed restrictions, homeowner association liens or title exceptions. While title companies often do a good job of highlighting title issues, if you are not paying close attention, you may miss something important.
These are just some examples of situations that might give you pause and make a consultation with an attorney worthwhile. But how do you go about hiring a real estate attorney?
Here are some things you can do to make a good hire:
- Use word of mouth. Ask your friends, family and business associates who they’ve used. Others in the real estate business — real estate agents, investors, and lenders —may also offer good referrals.
- Call the attorneys you are considering. Ask questions that relate to your situation. You’ll want to ask how much experience they have in handling real estate deals that are similar to yours.
- Check compatibility. This isn’t a marriage, but you’ll want your personalities to mesh as this person will be representing you in the community. Do you like his or her personality and believe the attorney is trustworthy?
- Ask about fees. It is perfectly reasonable to ask, ‘What do you generally expect a fee to be on a deal like this?’ If they can’t give you any kind of answer, then that is a big red flag. It might indicate they haven’t done many deals similar to yours. You can also ask the attorney to notify you if the fee goes over an amount that you’ve agreed upon.
- Consider experience. Experience and name recognition are things to consider, but if your transaction is fairly routine, you may be willing to consider a less experienced attorney in order to save on fees. Real estate transactions often do not require 20 years of real estate experience to do them well.
- Who will do the work? Will the attorney you are interviewing be personally reviewing each document of the transaction? If the answer is no, that might not be bad, but you’ll want to meet the person who will be doing the work to assess their competence.
- Is the attorney efficient? A good attorney can motivate everyone on the transaction team — title people, the opposing real estate agent, your own real estate agent — and act as the quarterback to push a deal forward. Every day that a deal drags out is a day you are not making money.
For more information about how B2R can help you obtain rental property financing to grow your business, just call 800-227-8107 or visit www.b2rfinance.com/borrowers and follow us on Twitter @B2RFinance.
The information on this page is provided for informational purposes only and does not constitute investment, real estate, or legal advice. This information should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. No representations or warranties whatsoever, express or implied, are given as to the accuracy or applicability of the information contained herein. The information may be modified or rendered incorrect by changes in the marketplace or developments in the law, or for any other reason, and may not be applicable to any individual reader’s facts and circumstances.