Should I hire an attorney for my closing

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
NorthernVa
Posts: 14
Joined: Sat Jul 07, 2012 6:33 am

Should I hire an attorney for my closing

Post by NorthernVa »

I am buying a bank-owned property, and my settlement date is next week. According to my real-estate agent, hiring the attorney is not necessary because the paper work is all the same. It also shows that I don't trust him. I read the HUD guide for settlement and etc. The procedure and forms are standard. Is there any need for hiring an attorney?

Thanks for your answers!
User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Re: Should I hire an attorney for my closing

Post by norookie »

Good luck!
Last edited by norookie on Sun Oct 21, 2012 4:41 pm, edited 1 time in total.
" Wealth usually leads to excess " Cicero 55 b.c
User avatar
archbish99
Posts: 1649
Joined: Fri Jun 10, 2011 6:02 pm

Re: Should I hire an attorney for my closing

Post by archbish99 »

In certain areas of the country, it's typical to hire your own attorney. In others, it's typical for those duties to be handled by paralegals at the closing company. Ask other people who've purchased houses in your area -- a nation-/world-wide forum's response will be skewed.
I'm not a financial advisor, I just play one on the Internet.
johnny72
Posts: 224
Joined: Wed Jun 20, 2012 10:35 am

Re: Should I hire an attorney for my closing

Post by johnny72 »

herp derp
Last edited by johnny72 on Thu Sep 27, 2012 8:32 pm, edited 1 time in total.
xerty24
Posts: 4827
Joined: Tue May 15, 2007 3:43 pm

Re: Should I hire an attorney for my closing

Post by xerty24 »

If you don't know exactly what a RE lawyer does at closing, I would say you need one.
No excuses, no regrets.
carolinaman
Posts: 5463
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: Should I hire an attorney for my closing

Post by carolinaman »

I would definitely hire an attorney to assure that everything is done properly and that you have clear title to the property. Title issues sometimes arise afterwards even if thorough title research has been done. The attorney can provide you title insurance to assure you are covered. Unless you are very knowledgeable of these types of transactions you are taking a big risk doing it without an attorney.
Mitchell777
Posts: 1278
Joined: Mon May 21, 2007 6:32 am

Re: Should I hire an attorney for my closing

Post by Mitchell777 »

I need to see an attorney tomorrow and I never find it a pleasant experience. That's just me. Having said that, you definitely should have an attotney by your side. It is cheap insurance
Topic Author
NorthernVa
Posts: 14
Joined: Sat Jul 07, 2012 6:33 am

Re: Should I hire an attorney for my closing

Post by NorthernVa »

Thanks for all your replies!

I live in Virginia. Virginia is one of the state that doesn't require the attorney to be present at the closing. The closing is done by the title company. And the title insurance (both lender and owner) is required for loan application. Most people I know who purchased the home with a real-estate realtor don't use the attorney. Some who purchased without the agent do hire the attorney.

I know roughly on what paper work that I need to sign by reading the guide books. I've already seen the preliminary HUD-1 settlement statement from the title company. Other documents that need to be signed including NOTE, Deed of trust, etc. are standard templates.

In the end, it will be a personal decision.
carolinaman
Posts: 5463
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: Should I hire an attorney for my closing

Post by carolinaman »

I live in NC but I am executor of my mother's estate in VA. We are doing closing on sale of her home tomorrow in VA. It is being handled by attorney. He is handling the entire transaction for buyer and seller. Realtor told me that I could get my own attorney as seller but advised me to use the same attorney to simplify matter. My parents have owned the house for 62 years and there were no liens on it. Even so, there were some issues with the deed that the attorney had to fix. There has been no mention of title company being there.

You are correct that it is an individual decision but there are a lot of potential gotchas in real estate transactions that good attorneys can help you avoid. Best wishes.
wilked
Posts: 2441
Joined: Thu Mar 24, 2011 1:50 pm

Re: Should I hire an attorney for my closing

Post by wilked »

From the info you have presented / knowledge base, I would suggest getting an attorney. The downside is too large should something go awry
ted123
Posts: 416
Joined: Thu Feb 21, 2008 12:47 pm

Re: Should I hire an attorney for my closing

Post by ted123 »

I've been involved in four closings in northern Virginia. We used attorneys twice when the sellers gave us an incentive to use their attorney (once it was a new condo that wanted all the buyers to use the same closing agent; once it was a home we purchased from the estate and the lawyer handling estate performed the closing).

The two other times we used title companies. One of those times, the title company had a lawyer call me about some (fairly easily resolved) questions that came up about titling the new deed.

Each of the closings went fine.

For a "normal" closing, I would use a title company. If you feel there's any additional risks of complication in the title, it may worth having an attorney. I don't know if buying a bank-owned property rises to that level.
Muchtolearn
Posts: 1563
Joined: Sun Dec 25, 2011 9:41 am

Re: Should I hire an attorney for my closing

Post by Muchtolearn »

Are you kidding? You are swimming with the sharks. I wouldn't go near the closing without having seen an attorney beforehand and having him/her there with me. Of course the real estate agent will tell you that you don't need one. It can only muck things up for him/her.

I strongly disagree with Ted above. I always ask: who is the attorney's client? If you are not paying, you are not the person he/she is representing.
dwc13
Posts: 165
Joined: Tue Aug 21, 2012 9:51 pm

Re: Should I hire an attorney for my closing

Post by dwc13 »

johnep wrote:I live in NC but I am executor of my mother's estate in VA. We are doing closing on sale of her home tomorrow in VA. It is being handled by attorney. He is handling the entire transaction for buyer and seller. Realtor told me that I could get my own attorney as seller but advised me to use the same attorney to simplify matter. My parents have owned the house for 62 years and there were no liens on it. Even so, there were some issues with the deed that the attorney had to fix. There has been no mention of title company being there.

You are correct that it is an individual decision but there are a lot of potential gotchas in real estate transactions that good attorneys can help you avoid. Best wishes.

Let me play devil's advocate here for a moment:

From what I gather from your post, this attorney was working for the Buyer when a realtor (not sure if this realtor was retained by the estate or is the Buyer's agent) made a suggestion that you also consider using said attorney's services. Are you confident you are also a client of this attorney for this particular transaction? Or is the attorney only representing the Buyer but handling all of the paperwork for this particular transaction? These are two very different scenarios.

If there is a dispute between Buyer and Seller at closing or down the road, who do you suppose this attorney would be representing? How do you know this attorney is looking out for your interests if there is a conflict (or potential conflict) and he/she is required to be acting in the best interests of his client, who (at least initially) appears to be the Buyer? For instance, in some jurisdictions an estate can convey real property, via a special type of deed, with fewer warranties and/or make fewer disclosures than are required for in a typical real estate tranasction. This is a good thing for the Seller (estate). However, the Buyer always wants more warranties and more disclosures, which often is not in the best interests of the Seller (estate). See the potential conflict? And I haven't even brought in issues caused by any delay in Buyer obtaining funding on closing date.

The bottom line is be aware dual representation by an attorney (IF that is what is happening in your situation) -- even with proper disclosure in a timely manner to both parties -- has potential traps. However, if the attorney's sole client in this particular transaction is the Buyer (i.e., no dual representation on the part of the attorney), you (estate) are effectively selling without having consulted with an attorney looking out for your (estate's) interests.
J295
Posts: 3403
Joined: Sun Jan 01, 2012 10:40 pm

Re: Should I hire an attorney for my closing

Post by J295 »

I am an experienced conservative attorney. In the typical residential closing chances are good that if you proceed without counsel all will be fine and you will never know the difference. However, there are some instances where counsel can spot issues that may prevent your from incurring or exposing yourself to material damage. For example in your situation do you know how to read a title commitment and are you able to identify and obtain appropriate endorsements to adequately protect your interests? I think the chances of our home burning down this year are slim, but I carry insurance anyway. You get the point I'm sure. I would recommend engaging experienced counsel. Good luck!
dwc13
Posts: 165
Joined: Tue Aug 21, 2012 9:51 pm

Re: Should I hire an attorney for my closing

Post by dwc13 »

J295 wrote:I am an experienced conservative attorney. In the typical residential closing chances are good that if you proceed without counsel all will be fine and you will never know the difference. However, there are some instances where counsel can spot issues that may prevent your from incurring or exposing yourself to material damage. For example in your situation do you know how to read a title commitment and are you able to identify and obtain appropriate endorsements to adequately protect your interests? I think the chances of our home burning down this year are slim, but I carry insurance anyway. You get the point I'm sure. I would recommend engaging experienced counsel. Good luck!

Oh, I think one might notice a @$350 to $500 difference. :mrgreen:
carolinaman
Posts: 5463
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: Should I hire an attorney for my closing

Post by carolinaman »

dwc13 wrote:
johnep wrote:I live in NC but I am executor of my mother's estate in VA. We are doing closing on sale of her home tomorrow in VA. It is being handled by attorney. He is handling the entire transaction for buyer and seller. Realtor told me that I could get my own attorney as seller but advised me to use the same attorney to simplify matter. My parents have owned the house for 62 years and there were no liens on it. Even so, there were some issues with the deed that the attorney had to fix. There has been no mention of title company being there.

You are correct that it is an individual decision but there are a lot of potential gotchas in real estate transactions that good attorneys can help you avoid. Best wishes.

Let me play devil's advocate here for a moment:

From what I gather from your post, this attorney was working for the Buyer when a realtor (not sure if this realtor was retained by the estate or is the Buyer's agent) made a suggestion that you also consider using said attorney's services. Are you confident you are also a client of this attorney for this particular transaction? Or is the attorney only representing the Buyer but handling all of the paperwork for this particular transaction? These are two very different scenarios.

If there is a dispute between Buyer and Seller at closing or down the road, who do you suppose this attorney would be representing? How do you know this attorney is looking out for your interests if there is a conflict (or potential conflict) and he/she is required to be acting in the best interests of his client, who (at least initially) appears to be the Buyer? For instance, in some jurisdictions an estate can convey real property, via a special type of deed, with fewer warranties and/or make fewer disclosures than are required for in a typical real estate tranasction. This is a good thing for the Seller (estate). However, the Buyer always wants more warranties and more disclosures, which often is not in the best interests of the Seller (estate). See the potential conflict? And I haven't even brought in issues caused by any delay in Buyer obtaining funding on closing date.

The bottom line is be aware dual representation by an attorney (IF that is what is happening in your situation) -- even with proper disclosure in a timely manner to both parties -- has potential traps. However, if the attorney's sole client in this particular transaction is the Buyer (i.e., no dual representation on the part of the attorney), you (estate) are effectively selling without having consulted with an attorney looking out for your (estate's) interests.
You make some good points and I see the potential conflict. However, ours is a straightforward transaction. VA uses a detailed and standardized Residential Contract of Purchase which does good job of listing terms of sale, including warranties if any. Secondly, I am comfortable with the advice of the listing agent who represented me. As I see it, the primary role of attorney is to convey a clean insured title to the property to the buyer. I know there are more details to it but that is the major one. The negotiation of the sales contract was handled by realtor and was complete before attorney got involved.

I asked both the realtor and attorney's office about potential conflict of interest. Both said that using one attorney was the common way this was done. In fact, they said having 2 attorneys tended to complicate the matter as it required more coordination of their efforts which sometimes created problems. The attorney's office said if there was a dispute between the parties, that using a separate attorney to represent me would be advised. I have been buyer of real estate 4 times and seller 3 times in 3 different states. There has always been only 1 attorney handling the matter. I can see that if it were a very complex or very large transaction, that separate attorneys might be advised.

Thanks for your response.
User avatar
HardKnocker
Posts: 2063
Joined: Mon Oct 06, 2008 11:55 am
Location: New Jersey USA

Re: Should I hire an attorney for my closing

Post by HardKnocker »

Your R/E agent says hiring an attorney means you don't trust him? What does that mean? That's goofy. Of course you don't trust him/her.

Of course hire an attorney. Call around and get prices for closing from attorneys. Flat fee. Look in the yellow pages for low cost closing fees from lawyers.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
User avatar
Phineas J. Whoopee
Posts: 9675
Joined: Sun Dec 18, 2011 5:18 pm

Re: Should I hire an attorney for my closing

Post by Phineas J. Whoopee »

NorthernVa wrote: ... It also shows that I don't trust him. ...
In light of the emotional manipulation, I would definitely hire an attorney, and not one suggested by this person. It sounds like it's too late in the process, but if it weren't, and if it were me, I would consider getting a different real estate agent, too.

Many who sound like swindlers aren't.

Others are.

PJW
globalexpat
Posts: 21
Joined: Sat Jul 21, 2012 7:17 am

Re: Should I hire an attorney for my closing

Post by globalexpat »

I bought a condo in the NoVa area, and I wasn't initially planning on using a an attorney. Towards the end of the process, the seller and his real estate agent tried to change the terms of the sale. I promptly sought the advice of the attorney, who helped me put things back on track. I would never close on another property without an attorney, particularly if the sale involved a short sale or bank owned property. My real estate agent (and her broker) were simply not informed about some of the legal aspects involved.
WatchinU
Posts: 166
Joined: Wed Jul 13, 2011 2:45 pm

Re: Should I hire an attorney for my closing

Post by WatchinU »

if you already have a legal plan at work then having an attorney at closing may be covered on your plan.

of course the realtor, title company, financing folks, etc... don't want you to bring an attorney to closing as they think it indicates a problem. I got nervous days before my closing when the title company and financing folks didn't follow through and return calls. it seemed as if they abandoned me. I called up my legal plan and the attorney offered to come to closing. it was covered under my legal plan from work. he reviewed every piece of paper that required my signature and asked questions. it made the title company, realtors, etc... very nervous but the attorney was the only one looking out for my interests. everything went smoothly because he was there.

typically the title company will promise you that they will give you the final numbers 1-2 days before the closing and you can review the papers before closing. they never keep their promise. its always a surprise at closing. why can't the title company honor their promises? i have no idea but it always looks like a mad scramble in their offices and it appears they don't know what they are doing -- just my perception. At closing, they just don't give you the time to read each piece of paper. having an attorney to support me gave me additional confidence that the terms were as I expected. there is nothing wrong having an attorney on your side to review all the papers and it keeps the title company on their toes.
carolinaman
Posts: 5463
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: Should I hire an attorney for my closing

Post by carolinaman »

WatchinU wrote:if you already have a legal plan at work then having an attorney at closing may be covered on your plan.

of course the realtor, title company, financing folks, etc... don't want you to bring an attorney to closing as they think it indicates a problem. I got nervous days before my closing when the title company and financing folks didn't follow through and return calls. it seemed as if they abandoned me. I called up my legal plan and the attorney offered to come to closing. it was covered under my legal plan from work. he reviewed every piece of paper that required my signature and asked questions. it made the title company, realtors, etc... very nervous but the attorney was the only one looking out for my interests. everything went smoothly because he was there.

typically the title company will promise you that they will give you the final numbers 1-2 days before the closing and you can review the papers before closing. they never keep their promise. its always a surprise at closing. why can't the title company honor their promises? i have no idea but it always looks like a mad scramble in their offices and it appears they don't know what they are doing -- just my perception. At closing, they just don't give you the time to read each piece of paper. having an attorney to support me gave me additional confidence that the terms were as I expected. there is nothing wrong having an attorney on your side to review all the papers and it keeps the title company on their toes.
Your points are well taken. As seller I closed this week on my mother's home. There was 1 attorney representing all sides. Everything at the closing went smoothly. My realtor told me to insist on see the closing documents in advance. The attorney's office finally provided those 2 days prior to closing but that was after multiple requests and followup by me. I needed their guidance on a couple of items in the sell and it was extremely difficult to get them to respond to me. Communications from the attorney's office was awful despite my efforts. I have a lot of experience working with attorneys in my work and this was by far the worst experience in terms of communications and response. Even though I paid them, I never felt they were working for me. I attribute my success to a diligent realtor who looked out for my interests. If I had this one to do over, I would have had my own attorney.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: Should I hire an attorney for my closing

Post by Professor Emeritus »

FWIW I am an attorney and I ALWAYS would have an attorney with expertise int he specific area go over the documents on a closing.
sailor234
Posts: 324
Joined: Tue Nov 20, 2007 6:47 am
Location: Lehigh Valley, PA

Re: Should I hire an attorney for my closing

Post by sailor234 »

my real estate experience is mostly in NJ, where an attorney was all but mandatory in the northern part of the state and far less common in the southern part of the state, where Title Insurance companies did the closings. (At one point the lawyers asked the NJ Supreme Court to require an attorney at any RE closing; the court refused.) At my first RE purchase the bank charged me $400 to cover their attorney, at which point I insisted he was also representing me since I was paying his fee. As it turned out, he also was representing the seller, a federal employee stationed in Mexico, who did not attend the closing. All went well. Ten years later there was a class action against the bank for forcing borrowers to pay for their attorney; I got my $400 back!

More recently I was selling a family home on Long Island, which I inherited from a Life Estate Trust deed. Rather than travel to LI for each step of the sale process, I found and contracted with a lawyer/CPA, from that area of LI, to represent me. For the closing paperwork he claimed that, as an out of state owner, NY law required him to withhold capital gains tax from my sale proceeds. Some months later I discovered that a home inherited under a Life Estate Trust steps up in basis to the value at death; there are no capital gains. In short, this lawyer/CPA was totally ignorant of this aspect of real estate transactions. I recovered the withheld taxes by filing a NY State tax return.

Finally, a couple were planning to get married when, with only two weeks to go, they died instantly in a car accident. Waiting for St. Peter at the pearly gates, they decided to ask him if they could get married in heaven. St. Peter was stumped, no one had ever asked that before, so he told them to wait while he went to find out. While they waited, they realized that they might not want to stay married, even in heaven, and might need a divorce. When St. Peter returned, after a long, three-month search, he said yes they could get married in heaven. They thanked him for the good news but then asked about a divorce if their marriage didn't work out. St. Peter blew up, totally frustrated, he screamed: "Are you nuts!! It took me three months to find a Priest in heaven and now you want me to find a lawyer??"

Ray
The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. George Bernard Shaw
Topic Author
NorthernVa
Posts: 14
Joined: Sat Jul 07, 2012 6:33 am

Re: Should I hire an attorney for my closing

Post by NorthernVa »

Thank you for all your replies!

Ray: Your post was indeed an interesting read.
User avatar
Sonoran
Posts: 117
Joined: Sun Jan 27, 2008 6:43 pm
Location: Arizona

Re: Should I hire an attorney for my closing

Post by Sonoran »

NorthernVa wrote:Thank you for all your replies!

Ray: Your post was indeed an interesting read.

So, how did your closing go? Any problems? Did you hire a lawyer?
Beware of little expenses. A small leak will sink a great ship - Benjamin Franklin
Topic Author
NorthernVa
Posts: 14
Joined: Sat Jul 07, 2012 6:33 am

Re: Should I hire an attorney for my closing

Post by NorthernVa »

Sonoran wrote:
So, how did your closing go? Any problems? Did you hire a lawyer?
I didn't hire a lawyer. The closing was delayed for one day because the HOA's computer system was down. Other than that, it went well. However, I did have a feeling that the check I wrote on that day makes many people happy (but not the lawyer). The saving from not hiring a lawyer allows me to buy a HE washer:).

Prior to the closing, I have also read some posts on the city-data.com regarding the closing cost in Long Island and why is so expensive ( http://www.city-data.com/forum/mortgage ... osing.html). The combination of lawyer and the title company!

The apprisal is not that useful either but it's required. Basically these people want to help the lenders.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: Should I hire an attorney for my closing

Post by Professor Emeritus »

Muchtolearn wrote:Are you kidding? You are swimming with the sharks. I wouldn't go near the closing without having seen an attorney beforehand and having him/her there with me. Of course the real estate agent will tell you that you don't need one. It can only muck things up for him/her.

I strongly disagree with Ted above. I always ask: who is the attorney's client? If you are not paying, you are not the person he/she is representing.
I agree with you on the first item. Iam an attorney but not an RE specialist and I always have an RE attorney review the paper.

You are wrong on #2 Who pays has nothing to do with who is the attorney's client. The officers who defend the accused terrorists at Gitmo are paid by the taxpayer but the defendant is the client.
The proper question to the attorney is always "Am I your client?" Its the same as the physician patient relationship, payment does not define the legal obligation.
Post Reply