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Home Buying Agent vs. Real Estate Attorney

Home buying agent vs. real estate attorney

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Buying a new home will likely be the largest and most significant investment of your life, which is why many people choose to hire a real estate agent to assist in the search and negotiate on their behalf. But it is often a good idea — and sometimes necessary — to also work with a real estate attorney.

Real Estate Agents and Attorneys 

Real estate agents generally fall into two categories: Home buying agents and home selling agents. Home buying agents aim to level the playing field a bit for homebuyers. Almost all sellers have seller's agents, whose job is to get the very highest price for the property. By working with a buyer's agent, buyers gain knowledge of the industry and familiarity with the particulars of a neighborhood, sellers, contractors, etc. Some states require the use of buying agents to ensure fair dealing between buyers and sellers.

Instead of (or in addition to) buying agents, homebuyers may also employ real estate attorneys to represent their interests in the purchase of a home. Attorneys are experts in real estate law and can provide guidance on legal issues that may arise. Whether you hire a buying agent or a lawyer, you'll be paying them for their services (more on agent commissions below), so the question is: Which is preferable?

State Laws: Buying Agents and Real Estate Attorneys

Some states require buying agents while other states stipulate that only attorneys can prepare home purchase agreements. You'll have to do your research to learn the laws in your state. This article will assume that there is no law requiring either a home buying agent or a real estate attorney.

Hiring a Buying Agent

The primary reasons to hire a buying agent are obvious. Home purchases are significant and the process of finding a home is burdensome. It's a relief and an assurance to have an agent who will walk you through the process and look out for your interests. A buyer's agent can be very helpful in hiring home inspectors, negotiating over who will pay for repairs, finding listings, and other matters which are everyday activities for agents but may be foreign to most homebuyers.

Choosing an Agent

Home sales have traditionally favored sellers. Sellers have selling agents, who sometimes aim to become buying agents as well. Be wary of so-called dual agency, because, in the end, you can't be sure whose best interest the seller has in mind. Don't be shy about asking potential buying agents if they are seller's agents. You should be positive about who the agent is representing.

When searching for a buying agent, keep in mind that they are in high demand during housing booms. In a depressed market, the demand for buying agents is quite low. You can use this fact to negotiate the agent's commission and take your time in finding the right house.

How Buying Agents Are Paid

In a typical arrangement, real estate agents are paid through commission — generally around 5% of the home's purchase price. In the common two agent situation (the seller's agent and the buyer's agent), the agents split the 5% and the commission is paid by the seller.

Some buyers prefer to pay commission to the buying agent in order to retain the complete loyalty of the agent. However, there is an inherent conflict of interest when the buying agent, who is purportedly representing the homebuyer, is being paid by the seller. Whether or not you choose to pay the buying agent yourself, you shouldn't be shy in asking them directly who the agent really represents.

Keep in mind that during strong homebuyer's markets you can try to negotiate a lower commission for the agent if you so desire. Just remember that you'll already be getting an excellent value on your home due to the depressed prices. Driving a very hard bargain with the person whose job it is to find the perfect home for you may discourage them from zealously pursuing the purchase of your home.

Keep Informed and Stay in Control

No matter who you hire, you should stay in control of the home buying process. Don't let the agent pressure you when it comes to homes, neighborhoods, or home attributes that you don't feel comfortable with or don't want. Particularly in down markets, the buyer reigns supreme and you should make sure that your buying agent knows exactly what you want.

Additionally, you should stay proactive in your search. There are plenty of commercial websites which not only provide listings of homes for sale, but give detailed information such as the market value of the home, the sale price, and the date and price of its last sale. Check out or and you will have a better idea of what a reasonable bid looks like and may even find listings which your agent may not know about or may not want to show you. Letting your agent know about what you've found will not only increase your options but will keep the agents on their toes with the knowledge that their buyer has the ability to find a home on their own.

Reasons to Hire a Real Estate Attorney

In most states, real estate attorneys are not required by law for the purchase of a home. While a home purchase is a significant investment, the actual sale is fairly conventional, with standard clauses and lots of filling in blanks. But it can be risky to complete a full real estate transaction without a lawyer's review.

In the event of a legal problem related to the real estate closing, only a licensed attorney may provide legal advice and represent you in court. For example, if there are liens or other legal encumbrances on the property or there is a tenant who you want to evict in order to rent to another person, an experienced real estate lawyer can investigate and analyze the facts and then guide you on how, or even if, you should proceed.

An attorney can also review your transaction to see if there are any red flags.

Legal Review and Confidentiality

Attorneys can be very useful in reviewing contracts. Particularly if you are purchasing a home without a buying agent, you should have an attorney review the real estate contract to make sure that you will not be subject to terms that unfairly favor the seller.

In addition, attorneys are bound by strict professional rules of confidentiality. This means your attorney is prohibited from exposing information that you do not wish to make known. You can speak to an attorney with complete candor without worrying that the information will be released in any fashion.

How Attorneys Are Paid

Unlike real estate agents, lawyers are paid on an hourly basis, and therein lies the biggest drawback of hiring a real estate lawyer in the purchase of your home — attorney's fees can range from $175-$400 per hour. However, there are attorneys who charge flat fees for certain services such as preparing or reviewing closing documents, and you can also tell an attorney upfront that you can only afford a specific number of hours. Communication with an attorney about payment should be clear from the beginning so that there are no misunderstandings, and it should always be put in writing.

The Bottom Line

Whether you choose to hire a buying agent, a real estate attorney, or both, remember that you are in charge of the process and they are there to provide you with a service. Be clear in communicating your needs and desires, get agreements in writing, and stay active in the process.

Need Help Buying a Home? Talk to an Attorney

Should you work with a home buying agent or a real estate attorney? Not everyone will need to work with a real estate attorney when buying or selling a home; but for some, it could be crucial to a successful outcome. If in doubt, contact a local real estate attorney.

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