Title insurance premiums are established by statute and most real estate attorneys are charging no attorney’s fees to represent the buyer in the closing process when they issue title insurance. In fact, sometimes it is even less expensive to use an attorney than a title company. Here are some of the benefits to using an attorney for your real estate transactions:
- An attorney can review the Contract which is prepared by the Realtor on behalf of the Buyer. Oftentimes, suggestions are made that would significantly benefit your client and, therefore, indirectly provide some legal protection for the Realtor.
- There are many boilerplate contingency forms available to Realtors. Sometimes, however, the particular circumstances require a carefully drafted contingency clause involving great legal implications. An attorney can draft the contingency-a title company cannot. It is of great benefit to Realtors to have this additional resource.
- It is common for issues to arise as a result of the home inspection. The legal interpretation of the Contract and the specific rights and obligations of the parties need to be addressed and sometimes legally enforced with the assistance of the attorney.
- There are significant consequences on how Buyers take title to real property. Legal advice can and should only be given by an attorney. The manner in which title will be held can have a great impact on homestead, estate planning issues, etc.
- In the event of a property defect detected during the final walk through, an attorney can draft a complete a thorough escrow agreement providing for monies to be held in escrow from the Seller’s net proceeds from the sale of the property to correct the problem. If the escrow agreement is not drafted properly there may be disagreement between the Buyer and Seller as to the disbursement of the escrow funds, oftentimes leading to litigation. Title companies and some attorneys who do not focus their practices in real estate law typically have a simple form to be filled-in for the escrow agreement.
- It is sometimes beneficial for the Buyer to create an entity to take title to the real property, e.g. trust, limited liability company, partnership, limited liability partnership, corporation, etc. While the fees and costs of formation of the entity would be charged to the Buyer above and beyond the required title insurance premium and related title service charges, the decision as to whether to create one of these entities for the Buyer is an important legal decision and certainly is beyond the scope of Realtor representation and involves legal advice not permitted to be given by a title company.
These are only a few examples of why an attorney should handle your real estate closing. Careful consideration should be made to work with a real estate attorney. Using an attorney who focuses their practice solely on residential real estate matters should give the Realtor and the Buyer some comfort in knowing that they are dealing with an attorney specializing in real estate transactions.
Why use a real estate attorney to act as the closing agent for your Buyer? Simply put, it costs no more, and sometimes less, to have legal representation for your client by using a real estate attorney versus a title company.