You might wonder if you need a real estate investment attorney to help you as a property investor. Answering the following questions can help you decide.
Whether you hire a real estate investment attorney depends on a few factors. These include where you’re buying, complexity of the transaction, and your familiarity with buying and selling investment property. Ask these questions to decide if you need a lawyer.
Where are you buying property?
Some states require the involvement of an attorney to close a real estate transaction. If you’re buying property in a state such as New York or Georgia, for example, you won’t have a choice about there being an attorney present. Laws vary by state. Often, when a state mandates the presence of an attorney, that attorney may not represent either the buyer or seller’s interests. Instead, for instance, they may represent only the lender. In that case, you may still want to hire an attorney to represent you in the deal.
What can a real estate attorney do for you?
Lawyers who specialize in real estate and real estate investment stay up-to-date on local, state, and federal regulations around buying and selling real estate. They know their way around zoning codes and tenant rights. They run title searches (or work hand-in-hand with title search companies). They negotiate during the buying and selling process on your behalf. They file paperwork when and where appropriate.
A real estate investment lawyer can help explain to you every part of the process, including around financing. A real estate attorney can also help you understand any tax liability and help you set up your real estate investment business in a way that’s both legal and advantageous. A good real estate investment attorney makes the process seamless—in the end saving you time and money and avoiding complications down the road.
You might need a real estate investment attorney if …
- You’re new to real estate and/or real estate investment.
- You’re not using a real estate agent.
- Your real estate investment deal is in any way out of the ordinary or complicated (such as buying a tenant-occupied house or buying something with an attached lien).
- Your financing is coming outside of a traditional bank loan (such as a hard money loan or private financing).
- The sale itself is more complex (such as a short sale or foreclosure).
- You need help negotiating a contract, concessions, or other aspects of the deal.
- You want advice on tax implications.
- You want an expert looking out for your business’ bottom line.
- You need legal advice on local rental and/or tenant laws.
- You need legal advice on local environmental laws.
- You are conducting an expensive transaction.
- You are buying or selling commercial investment property.
- You are buying or selling out of your area or out of state.
- You want an attorney on call to defend you if something comes up.
- You have a feeling that something’s not right or you have any doubts about the deal.
- You want to build a relationship with an attorney who you can turn to for advice about any aspect of your real estate investment business.
You might not need a real estate investment attorney if …
- Your real estate transaction is about as plain-Jane as they come.
- You’ve already conducted similar transactions and are familiar with the contracts and steps involved in this type of real estate investment purchase.
- You’re working with a real estate agent knowledgeable in real estate investment.
- You’ve conducted real estate investment transactions in this geographical area in the past.
- You’re using traditional financing.
- You’re buying a property for very little money.
If you decide to work with a real estate attorney, make sure the attorney you hire is familiar with real estate investment properties. Don’t be afraid to ask about the attorney’s experience. Find out exactly how much you’ll pay (flat fee or hourly?) and what you’ll be getting for that fee. Try to find a real estate investment attorney who you can work with as part of your business for years down the line.
Erin Behan is a writer and editor covering real estate investor strategy for Sundae. She’s lived in L.A., New York, and Atlanta and currently resides in Portland, Oregon, where she writes and edits for a number of outlets, including WebMD, Farmers Insurance, and Vox Creative. She spends her free time hiking with her two boys, snuggling with her cat, and enjoying the best of the Pacific Northwest.