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Why should I use an attorney to close my purchase or sale?

Both Buyers and Sellers of property frequently ask us, "But why do I need an attorney?" Often they've been told, by other real estate agents, friends or "advisors" that an attorney will cost them a lot of money and that they can buy or sell property more advantageously by just using the bank's attorney, a title company or an attorney representing the other party in the transaction to close the sale of them. In one sense, this is true: you do not need to engage an attorney to represent you in a real estate transaction in order to close a sale. It happens every day. However, at Buy the Beach Realty, we would never suggest that you follow this course.

In my experience, it's the very Seller and Buyers who are sure they don't need the "expense" of hiring an attorney to safeguard their interests and close their transactions who end up paying the most for their lack of foresight. First off, a few facts are in order. Although there is no "standard" attorney's fee for a simple real estate closing, most attorneys in this area work on the basis of a set fee to handle the entire transaction from contract review to closing. I find prices to be quite reasonable for typical transactions, usually in the area of $500.00 or so for sales up to about $120,000 in value and modestly higher as the value of the transaction increases.

Before you start thinking about the $500 you can "save" by skipping the lawyer, you need to remember that certain functions are going to be performed by an attorney in order to close your sale or purchase whether you hire the attorney directly or whether you end up using someone else's (such as a clerk in a title company, a bank or mortgage lender's attorney etc.). None of these people work for "free", you end up paying for legal services anyway through various title company fees for example, you just don't have much control over either the cost or the quality of the service. For example, a Seller who believes he is getting "something for nothing" by foregoing legal representation will still be charged, at closing, title company fees for "document preparation", "closing fees" and, very possibly, fees for lien clearance and other work required to perfect the marketability of his title. In fact, these are the services for which your own lawyer is charging you as part of his or her "fee" for representation. What you "save" with one hand, you will give up with the other in this situation. However, the lender's title company is not going to represent your interests if something goes wrong with the sale. More on this important point to follow.

Buyers also think they're "saving" big money in skipping the attorney's fee. Again, whether they pay a lawyer directly to examine title, issue a title commitment and title insurance or whether these items are buried in their "closing costs" they are going to pay for these services. In fact, Buyers have it worse than Sellers in this regard because of various abusive practices developed by title companies and "bank attorneys" to boost their income from this "captive" clientele.

I recently participated in a closing for the purchase of a condo unit in the South Bay Club in which, despite my urgings, the Buyer decided that he did not need his own attorney and, at the last minute, chose to close the sale using his lender's recommended closing agent, a law firm from Palm Beach. When the Buyer and Seller arrived to close, it developed that the Buyer was going to be charged about 150% of the "promulgated" rate for his title insurance! Other outlandish fees were liberally sprinkled through the closing statement and we spent hours arguing with the closing agent and the lender demanding that the prices of these items be reduced to something in line with local area norms. In vain. The choices were: pay us whatever we demand or don't close and forfeit your earnest money deposit. The buyer capitulated and paid.

Continued. Link here!

 

 


Unless otherwise stated square footage and lot dimensions appearing herein are derived from county records and may or may not be accurate.
If square footage is material to a transaction a survey or other measurement is recommended. This information deemed reliable but not guaranteed. Current or previous year’s taxes may not accurately forecast future property taxes. Property taxes can increase from one year to the next for various reasons.

This page, and all contents, are Copyright 2017 by Buy the Beach Realty, Inc.
800 West Avenue, Miami Beach, FL 33139 USA
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