Thursday, May 12, 2016

Residential Real Estate Transactions - Should You Hire a Lawyer, and When?

As part of my practice I help clients buy and sell real estate, including residential real estate.  The question often comes up of why are lawyers necessary in this process.  After all, isn't the lawyer "just going with you to the closing?"

This is a common misconception that is actually exacerbated when the lawyers do their jobs well, "making it look easy."  In reality, much of the lawyer's job, particularly the attorney for the seller, is done in advance of closing, behind the scenes.  For example, reviewing or drafting the contract, ordering or reviewing title insurance reports to ensure clean title will be conveyed, and preparing some of the documentation that will be signed and exchanged at closing.  These are the standard steps.

In addition to the standard stuff, there is also the conflict avoidance/resolution aspect, helping the parties sort through the issues that seem to arise in many if not most such transactions.  These include issues with buyer financing and appraisals, home inspections and alleged defects, failed radon tests, early occupancy requests, seller mortgage and lien payoffs and releases, property defect disclosures and failure to disclose issues, and many more.

Ok So I Should Hire A Lawyer.  Can't I Just Pay You To Come to the Closing With Me?

See the above as to why this is not a good idea.  The closing is the consummation of significant advance prep work that hopefully resolved most issues in dispute.  And if issues are disputed at closing, you want your lawyer to be prepared by having background knowledge about the transaction, and not just shoot from the hip.

In McLean County, Illinois, it has often been the case that the parties sign a preliminary contract with help of a realtor, then take that document to their attorneys for review afterwards, sometimes under an "attorney review clause" in the contract.  The problem with this is that it is human nature to feel offended when you've signed an agreement only to have the other side present you with changes they want to make days later.  What happened to the deal that was signed?  The contract forms commonly allow this to happen legally, but to the layman it can be hard to explain or accept, and it is always harder to propose changes after "the horse is out of the barn."  Furthermore, it is not unusual for the contract offered by a buyer to have a quick deadline -say 5:00 pm the day it is presented - upon which the offer is revoked.  For a seller who is seeing the contract form for the first time, that is simply not enough time to review and understand what they are signing before they sign it.

For these reasons, I highly recommend clients CONSULT AN ATTORNEY BEFORE SIGNING ANYTHING in a real estate transaction.  It is far better to be briefed by your lawyer on what to expect in the contract forms, and to already have some expectations in mind as to the standard terms, so that you as a Seller are prepared when you get that offer, or as a Buyer you are prepared to make an offer right away when you are shown your dream home.

I'm a member of the Illinois Real Estate Lawyers Association, and the following is their very helpful response to these questions.

Q. Why do I need a lawyer for a residential real estate purchase?

A. Intelligent consumers are well advised to enlist the assistance of a qualified real estate attorney. Buying a home will likely be the biggest and most important financial transaction of your life. You need a qualified professional to help guide you through the complicated world of today`s real estate transaction, and help you steer clear of problems.
Your real estate attorney owes an undivided duty of loyalty to you, unlike others involved in the real estate transaction, such as real estate salespersons, lenders, appraisers, inspectors and title insurance company representatives. Before you sign documents involving significant legal rights and obligations, your attorney can explain terms and help you understand what you are signing.
Therefore, you would be well-advised to see your lawyer first. Consult a qualified real estate attorney before signing any offer to purchase property. Thereafter, your real estate attorney can help you negotiate the specific terms of the contract, review title documents and ensure that clear title to the property will be conveyed, help you evaluate mortgage financing options and explain the terms of your mortgage loan, help guide you at closing through the stack of documents that you will be asked to sign, and check to be sure that the conveyance documents have been properly prepared and actually convey good title to the property to you. If you are married, your real estate attorney can also help you evaluate the pros and cons of taking title as joint tenants or as tenants by the entirety, and can explain to you the consequences of the various options.

Nate Hinch is an attorney and partner at the law firm of Mueller, Reece & Hinch, LLC.  He has offices at 404 N. Hershey Road, Suite C, Bloomington, IL 61704, and 809 Detweiller Drive, Peoria, IL 61615, and can be reached by phone at (309) 827-4055 and email at


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  3. It's good to know that an attorney really isn't used that much during real estate proceedings until after everything is finished. We are in the process of selling our home, and I want as few people involved in the process as possible so that it can get done rather quickly.

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