Sellsius real estate marketing blog

Lawyer (Uncle Dominique), Cezanne (1866)

Hiring a real estate lawyer is easy if you know the questions to ask. Ask a lawyer:

1. How many real estate transactions do you handle a year? You should expect a minimum of 25 closings a year. On the flip side, too many closings (many hundreds) indicate a “mill” where paralegals and junior attorneys do most of the work and contracts are assembly-line standard. This is fine for routine deals but you want an experienced lawyer if your deal requires a customized contract or if a deal gets messy along the way, and many do. Most transactions go without a hitch, except yours.

2. How much experience do you have closing ___ (insert the type of property, such as co-op, condo, multi-famiy, pre-construction)? Each property type has unique characteristics. Buying a co-op is a lot different than buying a single family house. Buying a co-op apartment is like buying shares in a company. Examination of financial statements are a MUST. Does your attorney have experience reading co-op financial statements and co-op Board minutes? What are the terms of the underlying mortgage and when is it coming due, reserve funds, capital improvement projects, assessment/ maintenance history are only some of the components? House sales require familiarity with surveys, C of Os, deed restrictions, title reports and their exceptions. Investment property requires knowledge of leases, zoning, form of title holding. Pre-construction is an art form which requires escape clause talent. A simultaneous closing requires prior experience.

3. How do you charge? The best answer is flat fee. The worst is hourly. Some charge a percentage of the sale price. Are you charged for anything else, like copying, postage and all those ticky tack fees? Messengers and overnight delivery are fair but make sure it’s at cost. Some lawyers, taking lessons from banks, tack on a premium so an overnight delivery is billed at forty bucks.

4. Who is handling the file? The best is a partner or senior attorney. The worst answer is “we have a whole staff of people to help and I oversee it all”. Translation: A paralegal, recent law school grad or newly admitted attorney, still wet behind the ears, is doing everything and they will call me when they screw up. I should be able to fix things. Of course, routine tasks like mailings do not require legal experience. But conversations with brokers, lenders, attorneys and title companies are best done by one experienced attorney. And that is the person you want to speak to when you call for an update.

5. Who will be at the closing? This should be the person who handled your file along the way. One of the most unnerving experiences is appearing at the closing and meeting a new person for the first time who is not familiar with what events took place before the closing. Any bump in the road can be trouble.

Bonus Questions:

• How are you paid? Ideally, the first payment AFTER contract signing and last payment of 50% at closing.

• What will you not negotiate? Even after an offer is accepted, lawyers will refuse to negotiate “non-legal” issues. This usually means anything having to do with the price.

• How should I hold title? If you are engaged and buying a house with your soon-to-be wife, buy as tenants in common and after marriage, switch to joint tenants or, better yet, buy after the weddding. Investment property is best held in by a corporation or LLC to protect personal assets, but be prepared for the additional record keeping and reporting. Make sure your attorney has experience with these other forms of ownership.

• Will you go through the contract with me before signing? You should hear a non-hesitant yes. And it’s a good idea to do this after you’ve had a chance to read it on your own. It’s a must for a first time buyer.

• Can I contact a prior client? This may upset a lawyer but what’s the harm in asking? Blame it on your spouse.

Caveat: This may be obvious but only hire an attorney who specializes in real estate transactions, not one who has done them. The law changes constantly. Even a knowledgeable attorney can miss something new if he doesn’t practice real estate on a regular basis. In other words, don’t hire Uncle Dominick.

Related Posts:

Experts Needed By The Real Estate Buyer: The ABTs
Experts Needed by The Real Estate Buyer: Part B
The Secrets of Contract Escape Clauses
Shop for Title Insurance And Save Thousands
Buyers Guide To Insurance: Read this Before You Buy