Having a ‘legal eagle’ on your side can save you money in the long term

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Published Date 9/8/2023

There are your friendly, smiling real estate agents who work on your behalf, and then there are real estate attorneys, who aren’t always the most popular people at the party.

Realtor.com’s Warren Christopher Freiberg is one of them, and writes about the things he wishes buyers knew. Still, he knows why he is not particularly beloved. “I’m a lawyer, so I fully appreciate why some people don’t like us,” he says. “We’re expensive, we’re often difficult to get a hold of, and when we do call you back, we don’t always tell you what you want to hear.”

He goes on to admit that real estate attorneys can often be the harbingers of some pretty bad news even though they are ethically required to have your best interests at heart. In reality, however, having one at your side can make buying or selling a home go much more smoothly.

While your own legal eagle may not clue you in to these matters, Freiburg is here to give you the inside scoop at no charge. First? Don’t wait to call a real estate attorney. A common question Freiburg gets asked is, “I signed a contract, and I want to get out of it. What can you do for me?” Or, “A court entered a judgment against me six months ago, and now I want it to go away. What can I do to avoid paying it?” In either case, his response is “Not much.” Why? Because he should have been involved before the problem came up, not after.

Oh, he gets it. A good real estate attorney is probably going to run a couple of thousand dollars depending on the circumstances of the transaction. But look at the flip side: You purchase a home without hiring an attorney, and let’s just say, for instance, that a tax lien goes undiscovered. You’re now the owner of the home and on the hook for several thousand dollars in old tax debt, and you risk possible foreclosure.

“That’s a very big, very expensive headache, and now you’re definitely going to need a lawyer to sort it out,” he explains. “And all of it could have been easily avoided by making that call upfront to a real estate attorney. We cost money, but we save you money.”

The thing is, don’t hire just any old attorney. Hire a real estate attorney. This seems like common sense, but it’s still a frequent mistake that home buyers make, according to Freiberg. “Your frat house pal from college might be an outstanding criminal defense attorney in Illinois, and he might even be licensed in multiple adjoining states. But that doesn’t mean he knows the first thing about real estate closings in Indiana.”

Next, understand that attorneys can do things real estate agents can’t. Those of us in the western U.S. may not be privy to the fact that some states require that an attorney be involved in a real estate closing. Others, like ours, let real estate agents prepare purchase contracts without any involvement from attorneys. Typically the buyer pays for a real estate attorney.

“In most cases, an attorney is going to act more like a referee, ensuring that everything follows the law,” says Freiburg. “But if you‘re looking to add unusual terms to a purchase agreement, or if you’re worried about a specific legal issue, an attorney can provide legal advice that a real estate agent can’t.”

Real estate attorneys help sellers as well, even those they are less likely to be sought out by them. That’s because an attorney can be a godsend for especially “knotty” transactions. Freiburg offers an example: “Let’s say you own a large plot of land and want to sell only a couple of acres. A real estate attorney can help you draft a covenant that will restrict how the new owner can develop the land, or make sure that you are granted an easement to pass through the land to access a public road or another part of your property.”

Freiburg adds that an attorney can also help owners understand and prepare for the full array of tax consequences of selling their home. “You might know that single sellers can exempt up to $250,000 from capital gains tax, and married couples can exempt up to $500,000. But that doesn’t include selling costs, closing costs, or the home’s tax basis. Confused? A real estate attorney can help you navigate these waters—accurately calculating your gains and saving you quite a bit of tax money along the way.”

And lastly, real estate attorneys actually do a lot of work even if everything goes smoothly with your home purchase. Okay. So you may wonder what you just spent a couple of thousand dollars on, but a lot of behind-the-scenes work goes into making sure you have peace of mind and a secure future for the biggest financial decision of your life. “Thanks to your real estate attorney, you’ll be able to rest assured there are no problems with the title and that the terms of the purchase agreement are fair to you. Property law can be rather archaic and often still requires delving into county records that haven’t yet been digitized, so it isn’t exactly easy work either.”

In the end, Freiberg wants you to know he really is a likable guy, attorney or not.

Realtor, TBWS

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