If you are selling your home by owner, is it better to use a real estate lawyer or a title company when closing your home? Well, I’m not going to give you that answer because that advice is a personal decision. However, I hope to inform you of the differences and if there is a requirement to use the services of a lawyer.
I have noticed that some areas have more traditional practices using one over the other. For instance, I live in Florida. When we purchased our first home here, we were uncertain of the closing procedures. We elected to hire a lawyer for closing. At that time it was $150 for this service. In our situation, the lawyer just sat there and made it look like he was reviewing the paperwork. I found out later when I opted to become a real estate broker that closing documents are standard on residential property. You could use the title company directly without the use of a lawyer for a simple closing.
But let’s examine whether or not a real estate lawyer is necessary for closing when you are dealing with a simple real estate transaction like a residential or investment loan to purchase rental property. Lawyers might claim you never know when a problem comes up and how they can stop it from happening, however, this is not always the case.
Here is what title companies will do for you. If you are selling your home by yourself without a Realtor, a title company will retain the escrow check (down payment) with a copy of your contract. If you need a contract, you can acquire a standard real estate contract from the local board of Realtors or just ask any Realtor. Most times they will accommodate you. Then it is a matter of filling in the blanks.
Those contracts are made for a win/win situation for the buyer and seller. That means, it represents no one side exclusively and is fair to both parties. Local lawyers have written those contracts for this reason. You can make an addendum to that contract by referencing the written contract and writing what you need to change. All contracts can be negotiated to whatever you prefer.
Then you can just coordinate the closing with the Title Company and buyer. The Title Agent will tell you what is needed for your side of the closing. The buyer’s lender will handle the mortgage side of the transaction and forward it to the Title Company.
However, if you go through this route, see which one will be cheaper a lawyer or Realtor. Typically a Realtor would be cheaper just to write a contract. At least with Realtors they will more likely be more flexible with their fee versus a lawyer. Sometimes bringing in a lawyer can turn a simple situation to a complex one. They do have a tendency to put their own spin on a standard contract which can cause negotiation problems with the other party. At least when you use the standard board of Realtor contract for your area, you know this is not a biased contract.
You can use the Title Company for the escrow and closing. Residential closings are standard. Yes, surprises do happen at closings. A buyer can back out at the last minute. That doesn’t mean you cannot hold him to the original contract. However, having a lawyer doesn’t insure you will have success either. You would need to understand the reason and decide whether or not to go after the buyer. If both parties cannot come to an understanding then you could hire a lawyer to follow through for yourself.
Lawyers will close and hold the escrow also. You pay an extra fee for their service which is real estate knowledge that is supposed to protect you. Well, then you have to trust you have a sharp lawyer. Everything is relative. Realtors are also trained to understand the real estate law. And even with a Realtor, it depends on how good the Realtor is in their real estate law. If both parties have a Realtor from the beginning and it is a simple transaction, typically a lawyer would not be necessary if Title Companies are traditional for the area.
Throughout the different states, they have different customary closings. I came from Illinois. They seem to work with lawyers to close all properties rather than Title Companies. I have a home in Georgia, and they also use lawyers.
2.Lawyers can also hold the escrow and close the home with a fee for this service.
3.If you use a lawyer to write a contract, there will be a higher fee for that service. This can complicate negotiations when it comes to a simple transaction.
4.A Realtor, can hold your escrow, write your contract and coordinate the closing. You can negotiate that fee with them.
Whether you prefer using a lawyer or just using a Title Company becomes a personal decision based on how comfortable you are with your situation and how many times you have gone through closings. Which ever way you decide to go, always ask for the total cost for the closing with all parties involved prior to any commitment.
