Many people never think of using a lawyer in a real estate transaction. But having a lawyer on your side is very important in any legal matter. Especially those that have hundreds of thousands of dollars on the line.
You shouldn’t sign any purchase contract that doesn’t say “this contract is subject to the approval of my attorney.”
You should wait and have your lawyer review the contract before you sign it, but I understand that in real estate, you sometimes don’t have time. In the past few years, many homebuyers have had to make a quick decision when it comes to making an offer n a home. Or you may be a seller who has a time limit to accept the offer.
When you make the offer subject to your attorney’s approval, you are saying that the contract is not valid until your lawyer okays it.
In most cases, you have a few days for your lawyer to review the contract. For example, ever real estate sales contract is subject to attorney’s review within five days of acceptance.
You aren’t asking for validation of the price you plan to buy or sell at — that is for the appraiser. You are simply asking the lawyer to make sure that the contract’s wording protects you. You need to also understand what you are committing to.
Once the contract is legal, you can either keep your lawyer on board or not. In some states, a lawyer will stay with the transaction all the way to closing. In my opinion, it is a good idea to have a lawyer with you at closing. There are tons of legal papers to sign and you will need to have someone really explain them to you. The lawyer can really be helpful.
In other areas, closing is mostly handled by escrow agents, title companies and lending institutions. But you can still bring representation with you to help review the paperwork. It is sometimes nice to have a second set of eyes checking the paperwork.
There are many ways a lawyer can help you avoid potential problems. For example, you may have failed to notice, and the Realtor didn’t point out, that your contract to purchase the property did not include an inspection contingency. Without an inspection, you may be purchasing a home riddled with problems. Even if you find the problems before closing, there is no way out without forfeiting your deposit on the property.
If you are a seller, you may have not noticed that the closing date wasn’t written in. Or perhaps you were given a verbal from the buyer as to the date his bank expects to close on. Your lawyer may point out that without a set closing date, the property could be in limbo for a long time. For example, on the sale of our first home, the buyer and his bank set five different closing dates, moving them back and forth. We finally closed the day after bringing our newborn home from the hospital. We were supposed to close three weeks later, but there was no set closing date in writing.
The thing is lawyers see things that we don’t. They like to prepare for the worst. They will see the worst case scenario. That is exactly what you want to be prepared for.