While everyone has their own priorities when purchasing or selling a property, the process can be pretty complex for both parties, and it can be easy to get off track. With so many legal issues involved, finding the right professional to keep you informed and lend a hand could be a smart move.
When the word “attorney” is mentioned, many people think that something terrible has happened, such as a criminal charge, divorce, or death in the family. Also, while people are working toward owning a home, they do not tend to think of choosing a real estate closing attorney. Nevertheless, being the one who hires the closing attorney could allow a person to focus on his or her new home instead of worrying about collecting endless documents and other tedious tasks. So, the question is, what exactly is a closing attorney, and who does the closing lawyer represent?
What Is a Closing Attorney?
While there are different kinds of closing attorneys, we’re generally referring to real estate attorneys who can represent either a buyer or a seller at closing with the aim of making the transaction as painless as possible. Without a closing attorney present, there would be no one to represent the interests of either party except themselves.
Sometimes, a closing attorney acts as an in-house advisor to a title agency or a title underwriter, providing advice for escrow agents. An attorney in that position will also occasionally advise clients of realtors. However, if you’re buying or selling property and getting ready to close the deal, the terms “closing attorney” and “real estate attorney” can be considered synonymous.
Who Does the Closing Attorney Represent?
In the course of a real estate purchase transaction, both the buyer and the seller have an option to hire a closing attorney to act in his or her best interest during the process. However, this arrangement can also work both ways, where a closing attorney would act as a dual agent and a legal expert who makes sure that both parties get a fair and honest deal under the applicable law.
In addition, if the property is being purchased with a mortgage loan, then a closing attorney can also represent the interests of the mortgage lender. However, it should be noted that the main purpose of a closing attorney isn’t to represent the buyer or the seller but to facilitate an otherwise daunting closing process.
Who Chooses the Closing Attorney?
The one who chooses the closing attorney differs depending on the location. In general, finding this representation is carried out according to state law as long as it doesn’t conflict with federal law.
For instance, if you’re buying or selling real estate anywhere in the state of Georgia, it is common practice for the buyer to choose a closing attorney. At the same time, the seller has the right to negotiate a choice, mainly when it comes to the buyer’s closing costs. In contrast, in Pinellas County, Florida, the seller makes the call for who will be the closing attorney for the transaction.
Overall, it’s up to the parties to make a decision. Since both the seller and the buyer benefit from the services of this attorney, it is in their best interest to choose the one who will work best for both parties.
Who Should Hire the Closing Attorney?
While a real estate agent often plays a critical role in preparing a purchase contract, it’s advisable to hire a closing attorney or a closing lawyer to draft or review the purchase contract terms and handle all additional paperwork.
However, it is more of a necessity with less conventional scenarios that call for more complex contracts, such as the following:
- Purchasing real estate in another town, state, or country;
- Buying or selling property with a critical issue;
- Selling property that is a part of a divorce settlement;
- Trying to sell property under a mortgage due to serious financial problems; and
- Buying real estate that is part of a special sale, such as an estate sale.
How Much Does a Closing Attorney Cost?
With all the benefits of having a closing attorney by your side comes a price tag that must be considered in advance. While the charge for the services of a closing attorney varies, here is the most common price range to give you an idea of how much money you’ll need to prepare to spend.
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Most closing attorneys in the US will charge hourly rates of between $150 and $350. The fee will usually change in proportion to the attorney’s experience in the trade.
If an attorney charges fixed rates, where the overall cost depends on the type of service offered, the range can be from $500 to $2000, depending on the complexity of the contract and other factors. The fee may also be related to the price of the property that’s the subject of the sale.
Advantages of Having Your Attorney Also Represent You
Besides saving both time and hassle, hiring a closing attorney to also represent you comes with a few major advantages, such as the following.
Serving as a source of legal and professional advice
Since a closing attorney knows the closing process well, both sellers and buyers can benefit from the attorney’s expertise and experience. In addition to spotting any potential legal problems and helping to avoid unexpected complications, a closing attorney can assist you with obtaining financing, provide you with access to additional resources, evaluate your documents, offer useful advice with your best interest in mind, and keep you informed throughout the process.
Making sure the documentation is correct
Given that selling and buying a property involves a significant amount of paperwork, having a closing attorney to make sure that the contracts are adequately drafted and comply with applicable law can be beneficial.
Having someone to handle the negotiations for you to get a decent deal
Besides negotiating the selling or buying process on your behalf, a closing attorney should also make sure that you are getting a decent deal. If the process involves more challenging circumstances, a closing attorney will make sure that the title is correct, negotiate the critical point of content—including any small print that doesn’t agree with your requirements—and come up with a solution acceptable to all parties.
Disadvantages of Having Your Attorney Also Represent You
While the advantages of hiring a closing attorney outweigh the disadvantages, there are some situations when hiring a closing attorney could be a bad idea.
A waste of money
Statistically, most real estate closings are day-to-day affairs that can be successfully handled without the services of a closing attorney. So, if you have a straightforward transaction or your budget is tight, you might be safe with only the real estate agent and the title company working on your case.
It could turn into a battleground
If your closing attorney is looking for an excuse to bump heads with the other party, such as nitpicking every small item in the contract, the transaction could turn into a battle, slowing down the transaction, and driving up the costs if you’re paying by the hour.
While some people might be put off by the price tag that comes with hiring a closing attorney, the value often far outweighs the cost, making it a smart move altogether. Among many things, your closing attorney can draft or review your contract, ensure that the paperwork is in order, and help to negotiate the best possible deal on your behalf. Your closing attorney, essentially, is there to protect your interest while guiding you through the process.