We are often asked if it’s a good idea to have a lawyer as part of your real estate investment team. Here is the answer. A friend once told me that the interesting thing about being an attorney was that no one wants you until they need you and no one wants to need you. As humorous as that sounds, the truth is that if you are going to do any type of investment business, you are going to need an attorney as a key member of your team. Everything you do needs to be above board, and attorneys are part of the process to make sure that happens.
Most people think that the only thing that an attorney does in the real estate process is to create and look over contracts. Although it is true that a major part of their role has to do with the contract, there are a host of other duties your attorney must perform. For example, your attorney is responsible for examining the property title. They are responsible for determining legal ownership of the property. They need to make sure that the legal owners are party to the contract, judgments, liens, and other legal business that has to be done before the property can truly exchange hands.
Your attorney is also there for helping you secure certain documents before closing. Some of these documents include surveys, certificates of Occupancy or Compliance, various inspections documents, bank payoff statements, etc. Collection of certain documents can sometimes go a lot faster when the requests come from an attorney’s office.
Attorneys are usually responsible for certain closing documents as well. There is, of course, the contract, but there is also the deed, possible a mortgage and promissory note, construction escrow agreements, affidavits, and the settlement statement. And then there is also the money. Your attorney is responsible for supervision of the transfer of all appropriate funds between the buyer, seller, lender, and other interested parties. This is another reason why you must pick an attorney you trust and one that has a great reputation.
Keep in mind that one of the biggest complaints people have about attorneys is that they are hard to get in touch.
If you are the type of person who needs frequent communication, let the attorney and his team know that. Ask them how often you can expect to hear something, even if that something is “Nothing has changed.” Begin your relationship with your attorney with a discussion about communication.
When you are choosing your investment team, you will want to look for an experienced Attorney. Don’t play around with lawyers who practice general law. Find someone who understands real estate law. When it comes to your attorney or your hard money loans, choose wisely and set up your team with professionals…like us!