Do you need a real estate attorney to buy a home?

Who represents whom at closing

The CFPB puts it directly. Unless you hire an attorney to represent you at closing, no one else participating in the closing exclusively represents your interests. Other attorneys present, such as the lender's or the seller's, do not represent you, may not be able to answer your questions, and must act in their clients' interests.

Some states require an attorney to be present at closing. The CFPB notes that even then, that attorney's primary responsibility is to the lender. In other states, a title company or escrow agent runs the closing and no lawyer is involved unless someone hires one.

Your real estate agent, if you have one, represents you in the transaction under your agency agreement, but agents are not lawyers and cannot give legal advice. A state's agency disclosure form, such as Texas's Information About Brokerage Services, describes what an agent's duties are and are not.

What a buyer's attorney does

The National Association of Realtors' consumer guide describes the main services an attorney provides buyers:

• Contract review. Reading and explaining the purchase agreement, including contingencies, deadlines and what happens if something goes wrong.
• Title. Conducting or confirming the title search and resolving title defects, liens or boundary issues.
• Legal issues tied to ownership, such as how you will hold title with a co-buyer.
• Closing documents. Coordinating with the lender to check that the deed, settlement statement and loan papers are accurate.
• Unusual situations, such as renovation loans or buying from an estate.

They can also step in when something unexpected comes up before or at closing, such as a missing signature, a title defect or a last-minute loan problem.

When hiring one is worth it

Even where an attorney is not required, NAR's guide notes one can offer peace of mind, especially when a transaction involves:

• Probate or trust ownership, where the seller's authority to sell must be confirmed and the transfer handled properly.
• Seller financing, which needs carefully written terms.
• Co-buying with someone other than a spouse, where you may want a written agreement on ownership shares and what happens if one of you wants out.
• Title concerns, such as an old lien, an unreleased mortgage or a boundary question.
• Renovation loans, which add draw schedules and contractor terms to the deal.

Other situations where a second set of legal eyes is often worth the fee include buying directly from an owner with no agent on either side, signing a builder's own contract for new construction, and any dispute over earnest money, repairs or deadlines.

The CFPB adds that if this is your first home purchase, you may consider having your own legal representation, and you can choose to have an attorney review your documents before closing.

Timing matters

The most valuable time to involve an attorney is before you sign the purchase contract, when terms can still be changed. Once you are under contract, an attorney can still help with title, closing documents and disputes, but cannot rewrite what you already agreed to.

Finding and paying an attorney

NAR suggests asking your agent or lender for referrals or contacting your local or state bar association, many of which run lawyer referral services. Look for someone who focuses on residential real estate in the state where the home is located, since real estate law is largely state law. The CFPB also points to legal aid services in each state for people who need help finding a lawyer.

Ask about fees up front. Some attorneys charge a flat fee for a standard purchase; others bill hourly. Ask what is included, such as contract review, title review and attending closing, and what would cost extra. If the attorney is also acting as the closing or settlement agent, the fees may appear on your Loan Estimate and Closing Disclosure, so check how they are listed.

The bottom line

Some states require an attorney at closing, but that attorney usually represents the lender, not you. A buyer's own attorney reviews the contract, resolves title issues and checks closing documents. Hire one when your purchase has any unusual feature, ideally before you sign the contract, and agree on the fee in writing.