If you hire an attorney for a real estate purchase, your lawyer can:
Write a title opinion
Look at the contract of sale
Look at the mortgage contract
Advise you on environmental regulations
and much more.
You’re about to buy a home, or commercial property. This will be a time when you need a qualified lawyer to assist you.
First, it’s a good idea to obtain a lawyer who is completely independent of the real estate agent, or seller, with whom you are dealing. If your realtor refers you to a lawyer, the realtor may refer to you a lawyer who is “friendly” with the realtor, and whose income is dependent on the realtor because he relies on the realtor for a steady stream of referrals. A lawyer like this will want to please the realtor, and may give you advice that does not help you, but helps the realtor. It’s best to hire an attorney without any divided loyalties, who will be loyal to you, and not partial to the realtor or seller.
What will your lawyer do?
One of the most important roles for a lawyer in a real estate transaction is the writing of a title opinion. A title opinion is a letter in which the lawyer states his belief as to whether the seller of the property actually owns the property and has the right to sell the property to you, or whether there is anything which would restrict the owner from selling the property to you. If the seller owns the property, we say, in legal terminology, that the seller “has title”; hence the term “title opinion.”
In writing a title opinion, the lawyer will usually look at an abstract. An abstract is a collection of all of the documents that relate to legal interests in the property. In Oklahoma, abstracts go all the way back to the time when the federal government first conveyed the land to an Indian tribe. Abstracts are prepared by licensed abstract companies; these companies produce the abstracts by copying documents from county land records, as well as court records. For more information about how the abstracting process works, see the websites of two abstract companies in Bartlesville: Musselman Abstract and Southern Abstract. Abstracts may include deeds conveying the property to prior owners, as well as mortgages, liens, and court documents in lawsuits relating to the property.
After an abstract company completes an abstract, the lawyer then looks at the abstract, to see if there are any documents which would prevent the seller from conveying the property to you, or if there are any documents that would cause you problems if you became the owner of the property. (For example, if there is an outstanding mortgage on the property at the time you purchase the property, you may owe money to the mortgage lender.)
If there is nothing that prevents the seller from conveying the property to you, the lawyer will approve the title. If there are documents that would prevent the seller from conveying the title to you, the lawyer may perform “curative actions”: for example, if the property is partially owned by a deceased person, the lawyer may file a probate action. Or, if more than one person is claiming an interest in the property, the lawyer may file a “quiet title” action, where the lawyer asks a judge to rule as to who actually owns the property.
Other roles for lawyers in real estate transactions
Your lawyer should also look over the contract of sale of the real estate to make sure everything in the contract is “on the up and up.” Your lawyer should also look over the contract between you and the mortgage lender. Your lawyer may also advise you on any environmental regulations, which may affect your use of the land. This can be particularly important if you are purchasing commercial real estate. The legal issues that may come up in real estate transactions can be limitless – each transaction is different, and the legal issues that arise in your transaction will depend on the particular facts in the transaction.
The decision to purchase real estate can be one of the most important – and costly – decisions you will ever make in life. Don’t do it without qualified legal counsel!