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Who Pays Attorney Fees At Closing?

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Buying or selling a house is a slow process. It could take months to seal a deal, starting from the moment a person starts looking at real estate listings to the time that papers are signed at the closing. So, you don’t want to rush things.

For many, buying a new house or selling an old is the turning point in their lives. Considering that a sizeable amount of money and paperwork that is involved, it’s easy for people to get flustered. In fact, real estate closings can be confusing, so they ought to be handled cautiously.

For this reason alone, it’s advisable to seek assistance from a professional rather than navigating the process on your own. A real estate lawyer is a good option.

What are closing costs?

A ‘closing’ refers to the process of selling a house. Money and documents must be transferred in order to hand over ownership of a property to the buyer.

According to Realtor.com, these fees typically amount to about 2% – 7% of the purchase price.

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Who pays for closing costs?

Closing a house doesn’t come cheap. Buyers and sellers both pay different costs during the transaction.

Unfortunately, closing costs tend to vary from state to state as well as by city, and sometimes municipality. It also depends on other factors such as the price of the property and whether there is financing involved.

Closing costs can be incurred on both the buyer and seller, or either one. Again, this depends on the state of residence. Moreover, both parties can negotiate on who pays which portion of the total fee.

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Buyer closing costs

What is a buyer responsible for paying other than the price of the property?

  • Lender fees
  • Appraisal
  • Transfer taxes
  • Property insurance
  • Title fees
  • Property tax reserves

Seller closing costs

Surprisingly, the seller will have to pay for certain essential aspects of the transaction. They typically are:

  • Real estate commission
  • Property taxes
  • Outstanding dues or utility bills
  • Any liens on the property
  • Transfer taxes
  • Title fees

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Hang on, where did the attorney fees go?

More importantly, you should ask, “Does a real estate attorney represent the buyer or the seller?”

It all depends on who hires the lawyer. A real estate attorney has several different jobs depending on which party they are representing. You must realize an attorney cannot serve both the buyer and the seller. He can only choose one due to a clash in the interests of both parties.

However, if a loan is involved, there must be an additional one present to handle the lender’s documents and rights.

In some states, you are legally obliged to attain a real estate closing lawyer. But in other places, you have a choice. So even though it is an added expense, it’s generally advisable to do so. They are professionals who specialize in legal matters related to real estate.

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Why do I need an attorney?

For starters, this may be one of the biggest and most expensive transactions that you’ll make. Moreover, the endeavor isn’t quite that simple. There are a lot of laws that you are probably not aware of. So a real estate attorney can guide you through the legal process and make sure you have completed all the legal documentation. Just remember to check the qualifications, credentials, and experience before hiring one.

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Real estate attorney for a buyer

Buying a property is a significant investment. You want to make sure that the agreement is structured according to the real estate laws of your state. A lawyer will make sure that the contract is drawn up correctly so that it is valid in a court of law.

Have an attorney review your documents before the closing. This can prevent any hiccups later on. So even if your realtor puts together the papers, have your attorney check them out.

Other essential aspects that should be considered, including whether there are any liens or easements. The current condition of the property should be clearly stated, including any defects or improvements that were made to it. How old these improvements are should also be specified.

A real estate lawyer is entitled to oversee the entire real estate property. This comprises of the land and anything attached to a building or structure. Therefore, it also includes anything that came with the property, such as appliances or fixtures. Other points, including boundary lines and drainage capacity of the soil, may also be considered.

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Real estate attorney for the seller

A seller is bound to receive multiple offers. The owner of a property has the right to the final decision, whether to accept or reject it. Usually, a seller will retain a lawyer when there is an offer that he is interested in taking. The attorney can facilitate negotiations.

Various disclosures need to be mentioned in the contract, especially one which relates to existing defects in the property that the seller is aware of. Federal law requires homeowners to disclose if lead-based paint or mold exists in the house.

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Key takeaways

Having someone on your side that is experienced with the law is extremely important. You can avoid legal problems later that could delay the closing. Doing things right the first time around can help save money in the long run.

A real estate attorney will prepare and review various documents such as the purchase agreement, mortgage documents, title documents, and transfer documents. A proficient lawyer understands and enforces real estate law. They must ensure that proper procedures surrounding the acquisition of property are followed.

Since real estate law differs from state to state, make sure you hire attorneys that are licensed to practice and are up to date with the legal system. Any changes in regulations can influence a transaction.

Hiring an attorney should not be overlooked. They offer invaluable support and advice during the deal. They can help guide you through the steps. And in case some issues such as foreclosure or a short sale occur, your lawyer can resolve these tough situations.

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