Buyer FAQ: Do I need to hire an attorney?

In Virginia, buyers have the right to choose their own settlement attorney. The settlement attorney represents neither the buyer nor the seller though. So buyers often ask me if they need to hire their own attorney as well. Marcus Simon of Ekko Title, a well respected settlement attorney in the area, has written this special "guest post" to address the ins and outs of attorneys during the real estate process here in the DC area. (I highly recommend Marcus for anyone looking for a real estate attorney, by the way!)

Many real estate sellers and purchasers wonder if they need to hire an attorney to represent their legal interests during the course of the transaction. The answer - predictably - is it depends.

In some parts of the country it is routine for both parties to a real estate transaction to engage counsel. I know this because clients coming from New York and Boston expect to need a lawyer. In California and other west coast states, the real estate transaction is treated more like a financial transaction and there is little attorney involvement, with closing or "escrow" services provided by the bank or mortgage lender.

In the Washington D.C. Metropolitan area a sort of middle ground approach as evolved over the last 20 years or so. Most real estate settlements are handled by non-attorney Settlement Companies or Title Companies. Most of these companies affiliate with law firms to provide certain necessary legal services, like the drafting of Deeds, Powers of Attorney, and other legal documents.

In the vast majority of cases, neither the Purchaser or Seller hires their own attorney, but both agree to allow the Title Company’s affiliated attorney to provided certain legal services and acknowledge the potential that legal conflicts of interest may arise. Contract negotiations, both before and after ratification, including home inspection and other issues, are handled by the Real Estate agents. Occasionally issues arise that the agents cannot resolve without attorney involvement. For instance, there may be a difference of opinion about whether a lien on the property is a cloud on title that would allow the Purchaser to get out of the contract, or what responsibility a Seller has to remedy an encroachment shown on their house location survey. In those cases, the Title company attorney should have provided a list of three independent attorneys for the parties to engage.

In some cases attorneys are engaged from the start. In many Estate cases, for instance, attorneys are hired to handle the sale of property where there are a number of heirs involved in the transaction and there will be additional documentation require to convey clear title. In commercial transactions the parties almost invariably use attorneys throughout the process to draft contracts (as opposed to form contracts usually used in residential transactions) deeds and loan documents.

For most sales, however, from the $300,000 condominium, to the $3 million mansion, the parties rely on their real estate agents and an experienced, competent, and professional Title Company attorney to guide them through the process and help mediate any issues before they become disputes.

Marcus Simon

Founder, Ekko Title

Partner, Leggett, Simon, Freemyers & Lyon, PLC