Whether you're starting as a new real estate investor or you've been doing this for a while, eventually, you'll need a real estate attorney. However, if you're trying to save money and haven't considered this critical member of your real estate investing team, you could be putting your investments and income at risk without experienced legal counsel as part of your real estate investing team.
If you’re interested in the best way to start real estate investing with the right protections backing your business, keep reading to learn more about what real estate attorneys do and when you should hire one below.
What Does a Real Estate Attorney Do?
Real estate attorneys handle "real property" transactions. A real estate lawyer may prepare or review all of the documents related to your home purchase, including the contract, any additional agreements made with the seller, documents from your lender, and title and transfer documents. If you use a real estate attorney, they may also attend the closing, whether it is virtual or in person. When operating rental properties, your lawyer can review the lease agreement and help you follow landlord-tenant laws to avoid lawsuits.
What Qualifications Does a Real Estate Attorney Have?
To become a real estate attorney, a person has to get a B.A., a J.D., and pass the bar exam. In addition, a real estate attorney will take classes that center around specific real estate laws. These classes help them understand the intricacies of real estate law and prepare them to specialize in the industry. An individual real estate attorney may specialize further in a particular area of real estate law, such as being an expert in a certain city’s specific laws, rules, and regulations for real estate transactions.
When Do Investors Need a Real Estate Attorney?
With the purchase, sale, or operation of properties as rentals, navigating legal situations without an experienced real estate attorney can be challenging. However, if real estate investments are a large part of your business, having an experienced attorney means you benefit from their expertise in real estate-specific contracts, legal terminology, and local rules and regulations.
Even if you’re just starting and are looking for general real estate investing tips, hiring a real estate attorney is a solid tip to help protect your investments long-term. A qualified real estate lawyer can help ensure you’re getting the fine print right while avoiding unexpected issues that could be prevented with the right contracts.
What Are the Benefits of Having a Good Real Estate Attorney?
If you’re looking for the best way to start real estate investing, hiring a real estate attorney early is a smart move. With the right attorney, a real estate investor gains many benefits, including:
- Buying properties in certain states and different real estate markets that require an attorney to participate in parts of the transaction. Having a real estate attorney on hand can help move the sales process along to generate income sooner.
- Helping them navigate tricky transactions, such as a short sale, purchasing a home in another state, buying a property with structural damage, and more. There may be specific terminology and requirements for contracts in these types of sales, so you want to be sure you have an expert working with you.
- Potentially saving them from bad transactions or hard-to-understand contract clauses when reviewing paperwork. Even if you’re familiar with real estate contracts, there may be a certain clause or section that you don’t fully understand in a contract. An attorney has been specifically trained to catch and unwind these difficult phrases to ensure there aren’t any issues in the future.
- Representing you and your interests at any real estate transaction-related meetings that may have an impact on an investment property purchase or sale.
- Helping with a purchase contract to ensure that the contract terms for timing, inspection, and title align with your interests.
Most savvy real estate investors don’t buy very many investment properties without the aid of a real estate lawyer. By investing in this critical relationship, you can avoid legal issues, unfair contracts, and making bad investments that never pay off.
What Should You Look For in a Real Estate Attorney?
If you’ve decided that a real estate attorney is the right option for you, you may be wondering what qualities you should look for in a prospective attorney, as well as what questions you should ask when you first meet. Here are a few things to consider when you’re looking for the right attorney for your needs:
What Is Their Specialty?
As a residential real estate investor, you are likely dealing primarily with rental properties or fix-and-flip projects. However, many investors also choose a real estate investment trust (REIT) or wholesaling to build their income. No matter how you decide to invest, it’s essential to ensure that your real estate attorney has experience working with the type of income property you prefer.
Do They Have Experience in Your Preferred Real Estate Market?
Choosing an attorney in your real estate market is also helpful since you can be sure they understand local rules, regulations, and laws required for owners of an investment property. Their familiarity with the local market as a whole can also be an asset to you and your investments.
Do They Come With Recommendations?
An excellent way to find an attorney that understands the real estate industry is to ask your friends, colleagues, and family members if they have worked with a good property investment lawyer in the past. These kinds of recommendations can be extremely helpful if you have a trusted connection within your network that is willing to share their attorney with you or point you toward other reputable colleagues in the market.
Are They Available?
The best property lawyer won’t do you any good if they’re not available when you need them. Depending on your needs as an investor, one of the best real estate investing tips is to make sure you know the availability of everyone on your team. If you have last-minute contracts or meetings that your real estate attorney should attend, they must have time in their schedule. Make sure a prospective attorney’s availability and communication style meet your needs before you start working together to ensure that you’re not setting yourself up for issues or unreliable legal counsel in the future.
Partner With An Excellent Attorney to Support Real Estate Investing Success!
Many property owners think that spending money on a lawyer is a waste of funds that could be put toward a new rental property or flipping houses. However, hiring a real estate attorney is one of the best decisions you can make early on when you start real estate investing. With the right attorney, you can avoid legal issues or misunderstandings that may come up with complicated legal language, specific clauses in real estate contracts, or other problems that can delay a closing when buying property as a property investor.
Along with an excellent attorney, property investors need a reliable and cutting-edge way to find new properties at the best prices. If you’re looking to diversify your investments or grow your real estate portfolio, Privy can help! With Privy, real estate investors can access the best insights for markets across the country, with deals delivered directly to their inboxes. For more information on how Privy works, contact our team today!
Find out more about how to build your investment team when downloading our free resource, “Assemble Your Real Estate Investing Team: A Worksheet.”