At Sinai Law, we don’t only solve real estate disputes, we also help clients close real estate transactions – either a purchase or a sale. Most parties to a real estate deal rely on brokers or agents to ask questions and sign paperwork, and lawyers are only involved if a dispute arises.
However, a growing percentage of buyers and sellers hire our services to represent their interest at the outset of a real estate deal due to several issues ingrained in the way property is bought and sold currently:
- Incentive Problems – they only get paid if the deal closes. This creates a strong incentive to close a deal at any cost and worry about issues later. Agents are rarely paid a salary and rely on closing as many deals as possible, as fast as possible. Imagine a scenario in which is it in your best interest to walk away from a deal. Which representative is more likely to tell that to you, a lawyer or an agent?
- Standard Forms – almost all agents in California use standard forms for real estate transactions. These forms do a great job protecting brokers, much less the parties in the transaction.
- High Cost – if you are selling your home or investment property, commissions can be as high as 6% of the total sale price.
- Dual Agency – agents and brokers in California are allowed to legally represent both sides in a real estate transaction. This happens more in commercial real estate deals but not uncommon in residential as well. While it is a legal process, it does often create a conflict of interest that harms one side (or both).
Real Estate Transactions – Quick Questions and Answers
- Can a lawyer represent buyers and sellers in a real estate transaction?
Yes. An experienced attorney can represent you in an escrow for sale or purchase of any property. You can hire an attorney instead of an agent, or work alongside one.
- What is the advantages of hiring a lawyer to represent you in a real estate deal?
Attorneys are not tied to the transaction closing, and therefore are only serving the best interest of the client. Unlike agents, attorneys are not allowed to represent both sides. In addition, real estate commissions in high priced sales are substantially larger than an attorney’s fee in most cases.
- At what stage can you hire an attorney in a real estate transaction?
You can hire an attorney at any time, before you make an offer or after you completed the transaction. It all depends on your budget, and legal needs.
Attorney Representation In Real Estate Transactions
Hiring a lawyer to be on your side if you are buying or selling real estate is a great way to prevent problems during escrow. We can represent you instead of a real estate broker or alongside them from the inception of the deal through closing. The only thing a lawyer cannot do is to market the property to potential buyers.
- A law firm representing you in a real estate transaction is only representing you and your interest. An attorney is not allowed to represents both sides of the transaction. In other words, your interest and best outcome is the #1 goal.
- No Conflict – unlike brokers, lawyers cannot represent both sides in the transaction. Further, our firm will only consider the best option for you in the transaction, even if it means walking away from the deal.
- We offer full service as a buyer/seller representative in a real estate transaction or can work alongside your agent to represent your legal interest and resolve disputes.
At what Stage Should you Contact an Attorney in Real Estate Transactions?
You should contact a transactional real estate lawyer as soon as possible, before making an offer or even approaching the other side. Here is how we can help in every step of the transaction:
- The Initial Contact/Making an Offer – before you make an offer through a purchase and sale agreement, make sure an experienced attorney reviews the terms and conditions of the deal. Once you enter escrow, it will be very hard to change the terms of the PSA. The purchase and sale agreement should always be drafted by, or reviewed by a real estate attorney.
- Title – we make sure the title on the property is free of all and any defects, liens, easements, or any surprises. Also, we make sure the seller is in fact the legal owner of the property, in order to make sure you are purchasing a clean title.
- Inspections/Pre-closing – our office can coordinate all required and necessary inspections including physical, termite, surveys, local permits, and loan payoffs requirements.
- Closing – we supervise the final documents and actions required to finalize the transaction – closing statement, deed and promissory note, final disclosures, and settlement statements.
Using a Lawyer for Residential Transactions – Purchase or Sale
Buying or selling a home is not only a large financial decision, it is an emotional one, too. If you are planning to start a family in a new home, or sell the house you grew up in – you need a trusted advisor to be on your side to make sure the deal goes through smoothly.
Our office can assist both buyers and sellers in a real estate transaction in order to get the results you want. Having an attorney represent you in addition to (or instead of) an agent provides you with the legal protection against potential disputes, understanding legal implications of various disclosures and contract obligations, and the confidence to close the transaction knowing you have someone on your side that is not attached to the outcome like an agent.
Our office helps buyers and sellers in residential real estate transactions by:
- Ensuring a smooth escrow process
- Compliance with city and state disclosure requirements
- Reducing potential liability from home defects
Transactional Real Estate Lawyer in Commercial Real Estate
Selling or buying an investment property can be complicated business. Unlike residential transactions, commercial real estate investments take into account income, expenses, development potential, city permit requirements, and financing.
It is very likely that both buyer and seller in a commercial deal are professional real estate investors, and both parties have an attorney on their side. Not having a lawyer representing you in a commercial real estate transaction is a severe disadvantage.
If you are buying commercial real estate, here is how we can help:
- Verify current leases, incoming streams, and expenses
- Review all current permits that were submitted to the city
- Complete a title review for possible easements, air rights, or mineral rights
- Maximize pre-contingency credits if necessary, or ensure smooth cancellation of escrow without penalties
Sellers can use our services to make sure:
- Buyer will perform all contract conditions fully and on time
- Tenant compliance with estoppel certificates
- Strict enforcement of liquidated damages clause in the PSA
- Avoid potential disputes over disclosure requirements