Q: I just finished your book “100 Questions Every First-time Home Buyer Should Ask” and found it very informative. You mentioned that real estate attorneys are rarely used in California. What is the explanation and rationale for this?
A: There are a bunch of states in which real estate attorneys are rarely, if ever, used to close residential house deals. The idea is that the real estate broker can do everything and you don’t need representation. The real estate industry, which believes that real estate attorneys simply mess up deals, has sold this idea to the public by saying real estate attorneys are a waste of money.
In truth, in the states in which real estate attorneys are commonly used, you pay a flat fee, usually a minimum of $350. For this you get someone to shepherd your deal through, negotiate the language of the contract, disapproval of contract rights, and a person who is completely on your side of the deal, with no interest at all in whether or not you close on the property. Everyone else in the deal only gets paid when you close, so they have a vested interest in seeing you close.
I don’t understand why residents in Georgia, Indiana, Ohio, California, and Arizona, to name a few no-attorney states, put up with this. Our society is way too litigious, and people get scammed every day. And of course, when you’re buying your single biggest purchase of a lifetime, the stakes are very high.
Jan. 19, 2009.