Friday, May 10, 2024

What Does A Mortgage Attorney Do

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When Its Required By Law

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Depending on where youre located, whether to work with a legal professional might not be your decision. State law might require you to hire one for specific parts of the transaction.

Some states will require a real estate attorney to supervise real estate transactions and be present at closing. These states are:

  • Connecticut
  • Ohio

Can I Buy A Property Without A Real Estate Lawyer

The real estate market can have its ups and downs, but if theres one thing that stays consistent when buying or selling a home, its the significant amount of paperwork required before you can exchange keys and addresses.

The cost of using a lawyer might deter some people from taking the leap. But it is arguably crucial to have the expert advice and guidance of various professionals in your corner to ensure the transaction goes as smoothly as possible. For what ends up being only a small percentage of the homes cost, hiring a real estate lawyer can be well worth the money for certain people, particularly those with no experience buying or selling a property.

A home is most likely the largest investment you will ever make. By not having a legal expert on your side during the process, you could ultimately end up on the hook for much greater costs down the road.

What Does A Real Estate Attorney Do For The Buyer

When a buyer hires a real estate lawyer, the lawyer will often attend the closing with the buyer. The closing is when the actual sale happens and all money is paid. Before the closing, the lawyer will prepare the necessary documents, which is one of their most important functions. The lawyer is specially trained to make certain that all documents are legally correct. A Real Estate Attorney will work closely with your Real Estate Agent and your mortgage lender to ensure you have everything you need.

In addition to this important task, a real estate lawyer will help to ascertain that the title search and funds transfer are completed properly. These are two of the most basic aspects of purchasing real property, and when it comes down to making the largest purchase of your life, it’s a good idea to make sure it happens correctly.

It doesn’t matter what type of property you are buying the Real Estate Attorney will know how to handle your unique situation whether it’s a single-family home, a condo, or any type of real estate. Oftentimes a Real Estate Attorney will advise you on things like a survey so you know where your property lines are when buying real estate so that you know if there are any encroachments on your property. They will be there on closing day with you to ensure you’re signing everything and purchasing the home legally.

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Why You Can Trust Bankrate

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.

Our mortgage reporters and editors focus on the points consumers care about most the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more so you can feel confident when you make decisions as a homebuyer and a homeowner.

How To Find A Real Estate Lawyer

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Finding a reputable attorney helps ensure that you’re protected when buying a house. Real estate scams, like escrow wire fraud, are a growing concern today. Youll want to do your research ahead of time to find the right professional for you.

Start by asking your friends and family for their recommendations. Your real estate agent is also a good source. Another option is to search the American Bar Associations website for real estate lawyers in your state.

Once youve compiled a shortlist, you can search for each attorney on your states bar association website. You should be able to find their contact information and whether theyre eligible to practice law in your state .

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Attorney’s Role In A New York Home Purchase

It is customary in New York for the sellers’ attorney to prepare the first draft of the contract of sale. Most sellers’ attorneys start with a standardized form and then add a rider with additional terms to be negotiated with the buyers. Your attorney likely will also add an additional rider to the contract with terms to be negotiated with the sellers.

Once the attorneys have finalized the contract, you and the sellers will sign it, and you will send the sellers’ attorney a downpayment, which you may lose if you walk away from the deal without a reason contemplated by the contract. Typically, in New York State, the downpayment is for 10% of the purchase price, and the sellers’ attorney will deposit this amount into an escrow account.

After the contract is signed, your attorney will need to do several things to prepare for a closing. First, the attorney will order a title report to see if there are any issues that sellers must resolve before a closing. These may include liens or violations against the property.

Second, your attorney will work with you to provide information and documents requested by lenders in connection with your mortgage applications. Third, your attorney will calculate the amounts that you will owe at closing to the sellers, the sellers’ lender, and the title company, among others.

What Role Does A Lawyer Play In The Mortgage Process

Buying a home is likely the largest financial commitment youll make throughout your lifetime. Thats why its so important to do everything in your power to make an informed purchase every time you buy property.

Ensuring the proper financing process is followed and that you fully understand your obligations as a borrower are keys to your success. If you currently have a mortgage, youll remember the stack of paperwork you were directed to review before you signed. And, if youre a first-time homebuyer, youll quickly learn why its so important to set an appointment with your real estate lawyer to take care of all the signing. It can definitely seem overwhelming.

As your mortgage agent, we can explain what all the terms and details contained within your mortgage agreement mean. But when it comes time to sign, its your real estate lawyer who will review the fine print and final details with you before you enter into the binding agreement.

Your lawyer is invaluable as he/she understands the way lenders draft mortgage documents and what to look for from a legal standpoint to ensure your best interests always remain top of mind. Your lawyer will review: Specifics surrounding your mortgage loan Security youre providing to the bank in exchange for the loan Lenders standard charge/mortgage terms and Whats currently listed on the homes title.

Among the documentation youll sign at your lawyers, expect to see:

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Why Buyers Need Real Estate Attorneys

Homeowners have different reasons for hiring real estate lawyers. Perhaps you want one to represent your mortgage loan or it’s your state’s requirement. Investopedia explains that you might need a lawyer in different stages of the buying process. Firstly, real estate attorneys negotiate in your favor to ensure the contract complies with the terms and conditions of the law. Some real estate contracts are more complex and require a lawyer to draft and review them for any required changes and favorable contingencies.

On other occasions when the buying process involves more parties such as partnerships or corporations, the contract preparation can prove complicated. An attorney knows the path to take in such situations and they will ensure the contact adheres to the law. The attorney will also conduct a title search to ensure there are no liens or judgments on the home and that the seller is the rightful owner . Because of their connections with title search companies, real estate attorneys do the title search effortlessly.

How To Find A Real Estate Attorney

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Ask for referrals from family, friends or coworkers, or ask your real estate agent for a recommendation. You could also contact your state bar association or a local title company, or do a simple Google search , Byington says.

Screen at least a few real estate attorney candidates carefully with the following questions:

  • Are you experienced in this type of real estate transaction?
  • How many real estate deals have you closed in the past year?
  • Are you a member of the real estate section of your local bar association?
  • Which title insurance company are you authorized to represent?
  • Are you on the approved attorney list for closing loans for several large banks?
  • How much do you charge, and is this a flat fee or hourly rate?
  • Is there a difference in what you charge for an all-cash transaction versus a financed transaction?
  • What is your availability? Are you available on weekends ?

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Why Sellers Need Real Estate Attorneys

Unlike purchasing a property, selling one doesn’t require an attorney in most counties. Yet, as Investopedia states, having one present is also necessary for sellers to be on the safer side with the other party. Keep in mind that the lawyer does the inspections and discloses the significant information to the buyer. If the purchase involves complex issues that affect the selling process, the lawyer can help you maneuver through the contractual issues faster.

Another reason why you might need a good real estate attorney is when you’re the successor of a house whose owner is dead when you have unresolved liens and judgments on the property, or if the partner you are selling with is not cooperating . The cost of hiring a real estate attorney depends on the job they do whether it is closing a home or doing a title search. While some attorneys will charge you for the service they offer, others charge hourly rates.

What Does An Attorney Do For You

“The work that a real estate attorney does for buyers starts much earlier than the closing,” said Michelle Chase, attorney at law with Naperville, Illinois-based Law Office of Michelle Therese Chase. “Taking on a mortgage and buying a house can be extremely overwhelming. My job is to make the transaction as smooth as possible for them. The language and terms are all foreign to them. My job is to help them navigate that.”

At closing, this professional’s job is to make sure that the loan documents you sign are prepared accurately and properly reflect the fees that you and the seller agreed to pay. Your attorney will also answer any questions you have during the closing and will negotiate on your behalf if last-minute financing problems pop up or if the sellers attempt to make changes with which you don’t agree.

Chase said that the mortgage closing packages she reviews are often 100 pages or more. That’s a lot of documents, and there is room for plenty of mistakes. Chase’s job is to make sure that her clients understand what’s in those documents, everything from when their mortgage payments are due, how much the payments will be and what they’ll end up paying each year to borrow their mortgage dollars.

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Whats The Best Way To Find A Real Estate Attorney

You can always check with your area’s American Bar Association to find qualified real estate lawyers near you. Also, contact those in the real estate industry for a suggestion by searching online for real estate attorneys near me.

Your real estate agent or loan officer may also be able to point you in the right direction. Always make sure to interview a handful of attorneys to find the one youre most comfortable with and who you feel will represent your interests best.

F Recording Of Documents/courier And Certified Copy Fees:

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These include the cost to courier the mortgage payoff and loan documentation for safe and timely delivery and to record the mortgage and other transactional documents.There could also be a cost for obtaining Registry certified copies that may be required in certain transactions as well asreturning the original loan documents back to the lender.

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Terms Used In A Typical Real Estate Transaction

Below are some terms and a basic description of what they mean. The definitions are not full and complete, but, they will help a buyer or seller understand the terms.

Conditions: Items needed to be satisfied before an offer to purchase becomes a firm deal, for example, the arrangement of financing satisfactory to the purchaser.

Conflict of Interest : A lawyer can sometimes continue to act even if a conflict of interest exists or presents itself. A lawyer may represent both the Lender and the Borrower in a typical house purchase transaction. However, a lawyer can not act for both the Vendor and the Purchaser in a typical arms length Purchase of a house.

Encumbrance: Something that attaches to land that diminishes the value of it, such as a mortgage, a construction lien, a writ of execution or even a right of way.

Escrow Closing: A way to allow lawyers to receive documents and funds in a type of trust arrangement before the final closing happens.

Fees: The money a lawyer charges for the work.

Key : An electronic data file with passwords.

Land Transfer Tax: A tax that is paid by the buyer when a property is purchased.

Mortgagee: The person who lends the money, also called the Lender. Often the morgagee is a bank, but, an individual or a company that is not a bank can also lend money.

Mortgagor: The person who borrows money, also called the chargor.

Planning Act: A piece of legislation that is used to help control the manner in which land is subdivided.

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What Are The Qualifications Of A Real Estate Lawyer

A real estate attorney must hold the same qualifications as any lawyer. They must hold a law degree and they must have passed the American Bar Association exam in whichever state they choose to practice law. A real estate lawyer can choose electives during their law degree that specialize in real estate law. They can also be certified as a real estate lawyer once they have started practicing.

Why You Shouldnt Hire A Real Estate Attorney

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A couple reasons why you might not want to hire a real estate lawyer:

  • You donât have the money. If you have a fairly straightforward transaction and a real estate lawyer is not required in your state, you might be OK with just the real estate agent and title company helping you. The money you save could go toward the down payment and other necessities.
  • It could become a battle. If your lawyer is looking for reasons to tangle with the other partyâsuch as making a big deal about a small item on a contractâit might delay the transaction and could be costly if the fight drags on and you have to pay by the hour.

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What Does A Mortgage Broker Do Your Step

Dealing with banks can be super stressful when refinancing your mortgage, getting a new one, or accessing the equity in your home. So, its only natural youll want a team of trusted professionals on your side. Hiring an expert real estate agent and lawyer are important, but not to be overlooked is hiring a top-notch mortgage broker.

What does a mortgage broker do? A mortgage broker is a licensed individual who helps you select the mortgage product that best suits your financing needs. They do this by comparing mortgage products offered by a variety of lenders. A mortgage broker acts as the quarterback for your financing, passing the ball between you, the borrower, and the lender.

To be clear, mortgage brokers do much more than help you get a simple mortgage on your home. They can help you access equity, refinance current properties, purchase investment properties, and a myriad of other tasks to support your financial well-being.

When you go to the bank, the bank can only offer you the products and services it has available. A bank isnt likely to tell you to go down the street to its competitor who offers a mortgage product better suited to your needs. Unlike a bank, a mortgage broker often has relationships with dozens of lenders , making his chances that much better of finding a lender with the best mortgage for you.

Now that you have a better understanding of what does a mortgage broker do, lets look at how a typical mortgage application looks.

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