Poor lawyers … they are often the topic of jokes. They’re the profession we love to hate … until we need their services. Some people may feel the same way about Realtors® in that they may not like us, until they need us. Like it or not, Realtors® and lawyers both provide valuable services to clients when buying or selling real estate.
In Ohio, hiring a lawyer for a real estate transaction is a strong recommendation but not a requirement. Our local Purchase Offer Contract (and the other forms we use) was created by the Columbus Board of Realtors® along with the Columbus Bar Association. It has been written to comply with local customs and State/Federal laws. While the Contract includes empty boxes where we can enter in property specific terms, the bulk of the Contract must stay as the CBR and CBA wrote it.
As I noted above, using a lawyer is an option for the Ohio buyer and seller. Once in a while, the buyer or seller may decide to use a lawyer and not use a Realtor®. That’s their choice. But, in either situation, use care in your selection. I’ve written other articles about what factors you should consider in selecting a “good” Realtor®. Knowledge and expertise should be the primary consideration. The same can be said for selecting a lawyer. Not all lawyers have as much expertise in real estate law as they should.
You should consult with a lawyer if divorcing or selling estate property
If you’re planning or in the midst of a divorce, your lawyer and Realtor® most definitely need to work closely together. It’s imperative that the client’s divorce lawyer approve selling the property or the purchase of new property BEFORE any real estate contracts are entered into. I’ve worked with many divorcing couples and always require that their lawyers give approval to list the home, before we sign any papers to actually list the home since the division of assets is such a key part of any divorce. Prior to purchasing a new home, the buying spouse should make sure that there is legal paperwork to keep the new home from being included in the divorce assets.
A lawyer should also be consulted for the sale of property that is the result of a family death. We need to know who has the authority to act as executor to sign all the paperwork; whether one person can sign or whether multiple signatures are required.
You should consult with a lawyer if not using a Realtor®
As a National Association of Realtors® ad said, “You don’t know what you don’t know“. When selecting a lawyer, if you’re not using a Realtor®, you really should ask what their expertise is in RESIDENTIAL REAL ESTATE. If the lawyer primarily prepares wills or divorce decrees, they may not be as up-to-date on the real estate laws as they should in order to prepare a Purchase Contract.
Once when I was an agent for a seller, a buyer used a lawyer to draw up their Offer rather than using a Realtor®. I’m not sure what the lawyer’s expertise was, but the Offer they drafted for the buyer violated State, Federal and HUD RESPA laws, and potentially would have caused the buyer to commit fraud against the County Auditor and the buyer’s lender. Needless to say, that Offer not only wasn’t accepted, it COULDN’T be accepted. So the buyer wasted whatever money they paid to the lawyer to draft that offer.
When interviewing a lawyer during your selection process, ask them how many residential Purchase Offers they’ve written in the past year, then ask how many of those Offers resulted in a firm Contract to purchase. The laws have changed or been revised so much during the past year, that if a lawyer doesn’t specialize in residential real estate law, they may be unfamiliar with the recent changes. Since lawyers charge based on their hours, you don’t want to pay their fees unnecessarily. Get your money’s worth.
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There is a reason why you use certain professionals for certain tasks – because of the training and expertise they have in a given area. Great post!