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Home Buying Agent vs. Real Estate Attorney

Home buying agent vs. real estate attorney

Buying a new home is a significant financial investment, especially for first-time homebuyers. Most buyers need guidance throughout the homebuying process. Many homebuyers hire a real estate agent to help them find their home and negotiate for them.

Homebuyers also have the option to work with a real estate attorney throughout the process. Often buyers opt to work with both types of real estate professionals.

This article explores the different types of real estate professionals and their respective roles in real estate transactions.

Real Estate Professionals

Many types of real estate professionals play different roles in real estate transactions. These include:

  • Real estate agents
  • Realtors
  • Real estate attorneys
  • Listing agents

Each plays a different role in the process of helping the public buy and sell homes.

Real Estate Agents

Real estate agents fall into two categories: buyer's agents and listing agents. Realtors are also real estate agents, but only a member of the National Association of Realtors can be called a Realtor. It's not a generic term.

A buyer's agent works for the homebuyer. They help the buyer find a home and negotiate the property's purchase price. They also help the buyer navigate offers and counteroffers.

A buyer's agent offers industry knowledge, familiarity with local neighborhoods, and contacts such as contractors and appraisers. In some states, buyers must use a buyer's agent to ensure fair dealing between the homebuyer and the seller.

seller's agent, also called a "listing agent," works for the home seller throughout the home-selling process. They help the seller stage and prepare the house for sale. They often help organize open houses where prospective sellers can ask questions. Listing agents help the seller determine the listing price for the home. While some homeowners try to sell their homes without help, often using "for sale by owner" (FSBO) signs on their lawns, a seller's agent can help ensure they get fair market value.

Real Estate Attorneys

Real estate attorneys are experts in real estate law, including commercial and residential real estate. With this expertise, they can help buyers and sellers in the homebuying process. They can provide legal advice on any complicated issues that arise during the transaction. They can craft legal documents such as the home purchase contract. In some states, only real estate attorneys can draft purchase agreements.

Real estate lawyers can help buyers ensure their new home has a clear title. During the home purchase process, buyers should confirm ownership of the house. Ordering a title search by a reputable title company is the first step in this process. The company will search through local real property records to confirm the seller is the home's rightful owner.

If there are any liens or other encumbrances on the home, a real estate attorney can help clear the title. Given their expertise and industry knowledge, they can recommend the best title insurance for the buyer. If there are any issues with the real estate closing, only a licensed real estate lawyer or attorney can represent the buyer in court.

Legal Review and Confidentiality

Real estate lawyers have experience reviewing contracts. If the homebuyer does not have a buying agent, they should hire an attorney to review the real estate contract to protect their interests.

Moreover, attorneys are bound by strict professional confidentiality rules. They must keep the buyer's information private. Buyers can speak to an attorney with complete candor.

Choosing an Agent

Home sales have traditionally favored sellers and seller's agents. Often, a seller's agent tries to work as the buyer's agent on the same deal. This is a dual agency, and homebuyers should be aware of potential dual agents. Homebuyers deserve an agent working solely on their behalf.

There are several ways to find a good agent, including:

  • Through word of mouth: Ask friends, family, and colleagues for recommendations.
  • Through a real estate brokerage: Almost all real estate agents work for a brokerage or under the supervision of a Realtor or real estate broker.
  • Online: Membership in the National Association of Realtors (NAR) distinguishes Realtors from real estate agents. The NAR has a member directory, and homebuyers can consult that directory to find a local Realtor.

After the homebuyer selects an agent, any agreement between the buyer and the seller should be in writing. Home sellers often enter into a listing agreement that clarifies the agent's commission and scope of duties. Ask questions upfront to make sure you understand the agent-client relationship.

Choosing an Attorney

Buyers have several options to choose a real estate agent. These options include:

  • Word of mouth: Ask friends, family members, and other acquaintances for recommendations.
  • Local bar association: Contact your local bar association to get the names of local licensed real estate attorneys.
  • Internet: Use a search engine to get the names of local real estate lawyers. FindLaw can help you find a real estate attorney near you.

Buyers should consult with several attorneys before hiring one. Ask questions about their licensure, experience, and fees first.

Paying Real Estate Professionals

All real estate professionals receive payment for their work in a real estate transaction. Depending on their role, payment is through agent commissions, hourly attorney fees, or a flat rate attorney fee.

Real Estate Agent

Real estate agents are paid through commission, usually equal to 5% of the home's purchase price. In two-agent situations, the seller's agent and the buyer's agent split the commission paid by the seller.

Real Estate Attorney

Unlike real estate agents, lawyers charge by the hour. These fees can range from $175 to $400 per hour. However, some attorneys charge flat fees for services like reviewing closing documents. Communication with an attorney about payment should be clear from the beginning and, preferably, in writing.

Get Help

Only you can decide if you should work with a buyer's agent or a real estate attorney. There are advantages to both. Please remember that a buyer's agent cannot answer any legal questions. If you need help with legal issues in a real estate transaction, consider speaking to a qualified local real estate attorney. They can review your transactional documents and answer your questions.

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