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.
Most people will not need a lawyer, unless there are problems with the deed, the taxes, etc. A broker in a particular state uses the same contracts and are very familiar with them, and can explain the contract precisely. Realtors and brokers are kept up to date with any and all contract changes, by the state they have a license with. Properties are valued by looking at the selling prices of previous sales of similar houses in the same neighborhood. For example, if you build a $500,000.00 home in a $50,000 neighborhood, and you try to sell your house, you most likely won’t get the price you paid for it, because the houses around it are only worth $50,000.00. The way a realtor checks is by doing a CMA on the neighborhood….just my own analysis
of course realtors cannot give legal advice under any circumstances