5 Things You Need To Know Before Hiring A Real Estate Lawyer

If you’re involved in real estate matters of any kind, chances are you are bound to ask yourself a simple question at some point: “Do I need a real estate lawyer?” Before searching for law firms, please consider the following 5 points before hiring a real estate lawyer.

1. During a real estate transaction, when does it become necessary to contact a real estate lawyer? 

Well it depends on the facts of each case, but it is usually best to have a real estate attorney involved early on in the transaction—if not, before you start.  Real estate people are great for handling the practical parts of the transaction, many times much better than attorneys. However, they are not and should never act in the capacity of one’s attorney or CPA, e.g., giving out legal, financial or tax advice.  If you are involved with a realtor doing that, it is time to find a new realtor.

For example, problems experienced right now in the real estate market can be contractual, but, in these economic times the problems homeowners are encountering most deal with the defaults on their most prized and important possession—their home.  When looking at the loss of, or to strategically default on one’s home there are two questions you must answer for yourself: (1) what is my deficiency liability to the lender going to be if my home is short sold, or foreclosed upon; and (2) what is my debt relief tax liability to the IRS and State going to be upon losing my home, either at a short sale or foreclosure?

These are not questions that your local realtor can, or should be answering for you if they are professional and looking out for your best interest.  Instead, if you are going through this situation you should be seeking the advice of a real estate attorney and local CPA and if your local realtor is smart, they should be referring you out to seek same, or have a relationship with one already to conveniently refer you to.

2. What are some of the most common situations where a real estate lawyer is brought in?

A real estate lawyer should always be consulted from the outset when dealing with a strategic default situation, or the unavoidable loss of a home.  A realtor might know enough to identify a potential issue is present, but, are never qualified to give legal advice.

Contractual disputes are also instances that necessitate the involvement of an attorney—but, they usually occur when one is already involved deep in the transaction.

Term interpretation or writings designed to protect one party to the transaction, such as, an addendum to a real estate purchase contract.  In these instances, it is important, as either a seller or buyer, to have an attorney draft language into the contract that either triggers, or does not trigger certain things according to case law that interprets those provisions. Certain rights and responsibilities are triggered, or not triggered, by the incorrect use of language all of the time by the courts.  That language use usually stems from sloppy terms used in writing up the transaction in the first place.  If you have an attorney involved that result can be avoided.

3. What sort of questions should I ask before hiring one?

First and foremost, ask yourself what is important to you, and/or what are you concerned about and ask about those things.  Next, ask about the person’s experience, education, publications, hourly rate, and practice areas.

As with many practice areas, several things are encompassed within one area of law. For example, in real estate, what areas of real estate do they specialize in—commercial, residential, lease, purchase, foreclosure, mortgages, negotiation, litigation, and/or transactional.  Also, ask what type and/or percentage of clientele do they represent in their practice, e.g., plaintiff, defendant, landlord, tenant, homeowner, contractor, lessor, lessee, mortgagor, mortgagee.

After all of that, finally ask yourself the gut-check, or feel good question, e.g., how does this person make me feel? Am I comfortable with them, do I trust the advice they are giving me? Do I feel like they are looking out for my best interests or their own?  Remember, seeking the advice of counsel creates a fiduciary relationship of the highest caliber.  So you need to trust that person.

After all of the above, you should have a pretty good handle on who this person is and what they can do for you and your legal problem.

4. Should I let my realtor choose my real estate lawyer?

Going back to what I said previously, hopefully your realtor, as a professional, has someone to refer you to.  But, you should never let them choose your lawyer for you.  Speaking with a  lawyer creates a fiduciary relationship that you must feel comfortable with.  Do not let someone else make that choice for you.

I have several realtors that have worked with me over the years and based upon that experience they refer their clients to me for consultation on legal matters.  That past experience acts as a reference point for clients to come see me and trust that I have performed well in the past.  Having someone force you to see a specific person for consultation purposes smells of impropriety and illegal compensation, or referral fees which are improper for a lawyer to pay to a non-lawyer.  That is not the person you want to represent you in your legal matters.

5. How much interaction or overlap is there between my realtor and my real estate lawyer?

Depending on the matter and set of facts there can be a lot, or a little.  Their relationship and interaction is factually dependent on one’s circumstances and the type of matter you are involved in.