Real Estate Lawyers: What They Do And When You Need One

A real estate attorney takes care of the legal aspects of a real estate transaction. Some states require real estate attorneys to conduct closings. Even if your state doesn’t, you may want a lawyer to represent you if your situation is complicated. 

Hiring a real estate attorney can be expensive, but it can also prevent costly legal issues down the road. Learn what real estate attorneys do, how much they cost, and what to look for when hiring an attorney for a home closing.

What is a real estate lawyer?

A real estate lawyer is a licensed attorney who specializes in legal issues that may arise in real estate transactions, including:

• Title and property transfers
• Land use and development
• Compliance issues
• Financing 
• Foreclosures
• Real estate investment
• Property rights
• Landlord-tenant issues

Real estate attorneys not only help clients perform due diligence and facilitate closing transactions, but they also represent clients in legal disputes. 

What does a real estate lawyer do?

Real estate agents and lenders can advise you on many aspects of real estate transactions, but lawyers have a unique role to play. 

“The only party to the transaction for whom evaluating legal risk is their primary duty is a real estate lawyer,” says Seann Malloy, founding and managing partner at Malloy Law Offices, LLC. 

Some of the tasks real estate lawyers typically handle include:

• Contract review: A real estate attorney can review a home purchase agreement, ensure it's legal, and explain what it requires. “They point out vague terms and explain the long-term implications of each clause,” says Malloy. 
• Title search review: A title search could uncover claims against the property, easements, or other issues that could prevent the transfer of ownership. A real estate lawyer can identify and work to resolve these issues before closing.
• Drafting documents: An attorney can reduce the risk of future problems by ensuring that all documents are drafted and filed in accordance with legal requirements. Documents may include the deed, promissory note, mortgage, affidavits of title, and bill of sale. 
• Handling liens: A real estate attorney can identify liens on the property that could prevent a clean title transfer and negotiate directly with creditors to remove them. 
• Handling complex loan paperwork: If you’re entering into a complex financing arrangement, such as a renovation loan or seller financing, an attorney can help you complete the paperwork properly and understand the loan terms. 
• Closing representation: A real estate attorney can represent your interests at closing, answering your questions and ensuring you understand every document before signing. 
• Dispute resolution: If disputes arise that require litigation, such as a breach of contract or boundary dispute, a real estate lawyer can represent you in court or negotiate a settlement.

When do you need a real estate lawyer?

You should consider hiring a real estate lawyer if you’re involved in a complex real estate transaction, including the following: 

• For-sale-by-owner: If you’re buying an FSBO property or selling your house yourself, an attorney who understands the home sale process can help you negotiate the purchase agreement, ensure legal compliance, and resolve disputes. 
• Investment property: Buying an investment property adds complexity that increases your risk. An attorney can help you comply with IRS rules for 1031 exchanges, check local rental restrictions and zoning rules, and more.
• Commercial real estate: The additional costs and complexities involved in purchasing commercial property could make it worthwhile to hire a qualified attorney who can ensure compliance with environmental regulations, zoning laws, and other requirements. 
• Transfer of property in an estate or trust: An attorney can navigate complex state laws regarding the transfer of property held by an estate or trust, and can handle the additional paperwork required to transfer the deed.
• Co-buying arrangement: If you’re buying a home with a friend or family member, you can protect everyone's interests by hiring an attorney to prepare a legal agreement that covers unforeseen circumstances. 
• Disputes, liens, or title concerns: If there are any complexities in the transaction — like an outstanding lien, foreclosure, boundary dispute, or clouded title — it’s safest to hire an attorney to ensure all issues are resolved before closing. 

Ultimately, hiring a real estate lawyer provides peace of mind, even if your home transaction seems simple. 

“If you’re advised you don’t need an attorney or told 'they just get in the way,' I think you’re getting bad advice,” says Scott Smiler, partner at Gallet Dreyer & Berkey LLP. “An attorney can negotiate the contract for you, ensure your interests are protected, explain the entire closing process, and manage your expectations.”

“Wire fraud targeting homebuyers is also a huge problem right now,” says Mazyar M. Hedayat, a lawyer, licensed title agent, and strategic legal and real estate advisor at Real Estate Bees. “A lawyer adds a safety check that can save you from wiring your down payment straight to a scammer.”

States that require a real estate attorney

Some states require attorneys to oversee or be present at real estate closings. Their roles may include recording documents, overseeing the transfer of funds, and clearing the title. If your state requires a real estate lawyer, you’ll likely pay attorney fees as part of your closing costs. 

States that require a licensed real estate attorney to conduct the closing process include:

• Delaware
• Georgia
• North Carolina

States that require a licensed real estate attorney to be present at closing to perform certain tasks, such as preparing documents or examining the title, include:

• Connecticut
• South Carolina
• Massachusetts
• New Hampshire
• West Virginia

Other states, like Alabama and Louisiana, don’t require a real estate lawyer at closing, but require attorneys to prepare certain legal documents or certify the title. 

Laws can change, so verify current local rules before closing. 

How much does a real estate lawyer cost?

The cost of a real estate attorney varies based on location, the lawyer’s reputation and professional experience, and their fee structure. 

Some real estate lawyers charge a flat fee for specific real estate services. Others charge hourly rates, which can range from $150 to $500 or more.

Hedayat says most real estate attorneys in Illinois charge $500 to $1,500 for a standard home purchase. “Put it this way: It's almost always less than one month's mortgage payment,” he says. “And in 23 years of practice, I've never once had a client say the lawyer fee wasn't worth it on a deal where something went wrong.”

What to look for when hiring a real estate lawyer

• Relevant experience: “I would caution against hiring a matrimonial attorney that moonlights as a real estate attorney,” says Smiler. If you need a lawyer for a complex task, like ensuring regulatory compliance for an investment property, confirm that’s one of their areas of expertise. 
• Local knowledge: Hedayat suggests asking the attorney if they’ve closed deals in this specific town before. “Local rules, local taxes, local quirks — they matter more than people think,” he says. 
• Attention to detail: “A good question to ask is, ‘What issues do you typically catch that others miss?’” says Malloy. “The response can provide an overview of their attention to detail when it comes to reviewing contracts.”
• Communication style: Do you want someone to explain every detail, or just answer your questions? Do you prefer an attorney who is direct and to the point? Find a lawyer whose communication style matches yours — and ensure they respond promptly, since real estate transactions happen quickly. 
• Fee structure: Choose an attorney with a fair fee structure that fits the job. That said, “Don’t get fixated on pricing,” says Smiler. “Purchasing a home is the biggest financial decision for most of my clients, and it would be wise to invest in an attorney who is experienced, passionate, and competent."

Pros and cons of hiring a real estate lawyer

Pros

• Reduces the risk of title issues: An attorney can help resolve issues of disputed ownership that could cost you money or make it difficult to sell your house later on. 
• Helps with complex contracts, financing arrangements, or transactions: If you’re writing a complex purchase agreement with contingencies, entering into a co-buying arrangement, or completing a 1031 exchange, a real estate lawyer can alert you to loopholes or errors that leave you vulnerable. 
• Can sometimes replace a real estate agent: Though most people benefit from having a real estate agent, experienced buyers, such as real estate investors who know their local market, may opt to work with an attorney instead of a real estate agent to save on costs.

Cons

• Requires an additional fee: You must pay for an attorney to represent you. Some homebuyers might not want to spend extra money, even if it provides an additional layer of protection, since homebuying is already expensive.  
• Could be unnecessary in some circumstances: If the real estate transaction is straightforward and your lender and title company have their own attorneys, you may not need a real estate lawyer. 
• More items on your to-do list: Adding another professional to the mix means more communications, making an already stressful process worse. 

Real estate lawyer vs. real estate agent

Real estate lawyers and real estate agents are both experienced professionals who help with specific aspects of real estate transactions. Both may also have certain obligations to clients. Real estate agents who are members of the National Association of Realtors are bound by a code of ethics, while attorneys must follow rules of professional conduct mandated by the laws, governing agencies, and/or bar associations in their respective states. 

While some of the roles and duties of real estate lawyers and agents overlap, others are distinct. The table below shows how their roles and responsibilities compare. 

Real estate lawyer vs. title company

A title company performs a comprehensive records search to confirm the seller has sole ownership rights prior to closing. Title companies also provide title insurance policies to cover errors in the search. In some states, the title company also handles submitting the mortgage, deed, closing statement, and other documents to the county registrar after closing. 

A real estate lawyer can also submit these documents, and in some states, an attorney is required to finalize the closing process. Attorneys also conduct title searches, but they can’t issue title insurance. 

While both attorneys and title companies conduct title searches, real estate lawyers have legal knowledge that may make them more likely to identify complex issues. “I once caught an easement that would have let a utility company trample right through a buyer's future garage. Nobody else at that table even noticed,” says Hedayat.

Real estate lawyers also help with a broader range of tasks than title companies, including drafting and reviewing contracts, confirming compliance with local laws, negotiating settlements, and representing clients in court.