What does a Real Estate Attorney do at a closing?

Transcript

good afternoon everyone welcome to pink mic legal confessions today we are talking about a really interesting topic um that has to do with real estate so thank you all for joining me today as you know i'm stephanie garces donat owner of garces law firm where we help parents secure their legacy and actually prepare for the unexpected for everybody including real estate clients which is one of our topics today and it's really important that you guys kind of understand what our role is when we are attorneys representing a client real estate attorneys are in illinois used and we'll talk about a little bit about that in just a second but we are kind of talking about this area of the law because i'm really passionate about real estate uh financial planning estate planning uh real estate law all go hand in hand and in today's market you really really have to be aware of these areas and what are things that you should know about each of them and working with a lawyer to help you guide you through all of this is a really really good investment and it's money well spent so someone who's well-versed in all three is the best way to get the best results so today i'm going to answer a couple of questions but the topic of today is what does a real estate attorney do at a closing now when i say a closing that's typically where the real estate attorney appears and helps with the transaction facilitating the transfer of the property so the housing market as you guys know is on fire it's on fire and this hasn't really stopped and it's such an interesting thing for me to talk about this because i feel like when we talk about the housing market being on fire we're actually talking about um the in the midst of a pandemic right that is pretty obvious so for anyone in real estate they'll agree with me that this is this is crazy and it's not slowing down i think it's actually getting a little bit uh more hectic um you know especially as the spring market is coming i know dead of winter it is a little bit slower for some of us but not necessarily and so with homes flying off the shelves selling in a number of hours sometimes days above market value and actually i would say in some cases even without an appraisal which is crazy because you know what you would think most people would want to do an appraisal but sometimes there's been reasons to waive that um even inspection conditions people have been waiting inspection they've seen that more often than not to me it's interesting because i've never really seen um this sort of market where people are doing this more than ever before and i think a lot of it has to do with this housing bubble and this housing market that we're in you know you would think in a pandemic things would slow down you think people would say you know what i'm tired of my funds let me not do this but it's actually the complete opposite so thank you for joining me today because i really really want to talk about this um and quite frankly hiring a professional it's really important to hire a professional when handling your real estate closing and it makes so much sense and you'll see why by the end of this this pink mic so you kind of understand why it's important and essential to have an attorney by your side now many people this is the first time they're selling the first time they're buying or perhaps you have experience with this you don't really understand what the role as an attorney is but be sure you know exactly what the lawyer's role is and responsibilities are before you hire them so very very important let's dive right in so first the biggest breakdown of what a real estate attorney's role is is to one advocate for the client advocating for the client whether it's a buyer or a seller that they're representing is very very important keep in mind that when you hire an attorney that does real estate for your closing we represent you we don't represent the lender we don't represent the agents in the file we don't represent the title company we just look out for your best interest so so it's very unbiased um in a way um in that we don't have really skin in the game so to speak um so it's important to hire someone that's objective is just to look out for your best interests as a buyer or the seller keep in mind too that some people will ask can you hire people to do both sides so we'll talk about that in just a little bit but it is going to be covered so the other thing we do outside of just representing your interest through the moment you sign the contract to the to the closing sometimes even after when there's other issues that arise um we also act as negotiators um almost a mediator i think is a good way to put it between two parties keep in mind that the seller typically has their own attorney so we may represent them or someone else does the other party being the buyer has a separate attorney a separate realtor has their own lender so typically each party has their own attorney now as attorneys we usually represent the clients we have conversations we try to mediate for what each client wants to make sure you get the best result the other thing that we do is we ensure that all the areas of the legal process especially when it comes to buying a piece of real estate have been addressed have been diagnosed really like from a to z when it comes to what is it the problems that we see here legal problems um we also make sure that we comply with the rules uh whether that rule is legal rules there are you know as you know rules with the law and contract law but also local rules for example like different villages different cities different counties there's an infinite number of rules and i'm sure anyone watching that's in real estate knows what i'm talking about because the amount of rules there are for municipalities is a lot and every municipality is different so if you live in the city of chicago there's a lot more rules and different type of rules than if you live in the chicago suburbs um or if you even go out west out to more rural towns there's also different requirements so uh there is a lot of requirements so we do make sure that we're in compliance with those rules in the state with the law and municipalities where the property is located where it's being purchased or it's being sold now we're tasked with a lot of responsibility i know this is obvious but i do want to break it down so that you understand what it is that we do in this process so if you oversee the real estate transaction um and and really um if your attorney is well-versed in this they do know that ahead of the closing there's a lot of work to be done part of the responsibility is looking over the contract making sure that everything that was agreed to is in the contract for example i want to take the television i'm going to take that with me maybe you're a seller and you have a nice tv that you're taking with you that would be stipulated in the contract if you're buying one property um that is maybe two lots sometimes there's two lots and you're only selling one of them that would be in the contract if you are selling um anything specific to the buyer that would be in the contract if you're providing something that is outside the norm that would be in the contract and so on and so forth so we do make sure that ahead of the transaction everything gets stipulated everything gets sorted out and there isn't any misrepresentations or miscommunications and sometimes there are which is also why we step in to try to fix it if there were an issue but for the most part a lot of this work of reviewing the documents and the terms of the transaction really get us in a better place so that's really one of our responsibilities to make sure you're protected make sure that you're served and make sure that you understand your rights throughout the process because after all signing a real estate contract is still a contract at the end of the day so there are contract laws and principles that apply to this another one of our responsibilities that is important is organizing the closing uh completing the paperwork ahead of time when we represent sellers for example there's a lot of paperwork that has to be drafted from the deed of the home um making sure that the title of the home is clear making sure we've complied with the requirements for the city or perhaps the county that we have all parties that are interested in this property have interest in this property to sign on the paperwork that is necessary sometimes there's even things that pop up that are outside the norm that we have to address for example some paperwork is necessary if you're in if you're an investor that's what i'm trying to think investor typically the investors tend to have contractors that did work so it's important for us to do the paperwork look at everything make sure there aren't any liens meaning no one is owed money by you and typically that's kind of one of some of the paperwork that goes on on the sell side um we obviously also look over the uh the numbers of what you've gonna you're gonna be either getting from the sale or perhaps you have to pay things off so there's a number of things that we have to organize and it takes a lot of manpower it takes a lot of or woman power in my in my case um to do this so there's a lot of paperwork that goes in ahead of time same with the buyer the buyer has a lot of paperwork through the process they even have more paperwork when it goes to the closing so we do review that at the actual closing so when i say necessary paperwork we make sure everything's completed everything's accurate and there isn't anything missing the other thing that is a big responsibility as a real estate attorney is to be present be present make sure we understand the files we understand what's going on with your file we advise you the best way possible especially with thorny issues there's certain issues that um come up that are really not super common and we try to guide you in the best way possible because we do have experience with this so we try to say okay this is what the best case scenario is this is the worst case scenario we always keep in mind your best interest and try to guide you through the process we also ensure that everything is complied with on the day of closing so if for some reason the day of closing there it was supposed to be something left at the property or maybe there's damage to the property or there was a repair that the seller was supposed to do that wasn't done or perhaps the buyer was supposed to do something on there and that wasn't done we make sure that everything is taken care of and we make sure things are sorted out typically when this happens they're called walk-through issues so if you have a walk-through issue the day of closing whether you're a seller or a buyer usually the attorneys communicate with one another so each attorney that represents one of the parties will communicate with each other to try to sort out some of the issues that have arisen and so the goal is to try to reach an agreement if possible so that we can actually close the transaction so sometimes there is a second bite at the apple when it comes to this many times i tell clients you know if there is an issue we can always go back and try to address it before you actually close so we make sure that we are present helping you throughout some of these issues now i just want to do a recap really quickly for some of you that are just joining me now my name is attorney stephanie garces donat i'm an owner of garces law firm where we help parents secure their legacy and prepare you for the unexpected my website is below me and you can always text or call and make appointments but thank you so much for joining us this is pink mic legal confessions we cover topics that are important to the viewers and really just important for you to know your rights we try to use our platform to do that and we actually help individuals a lot couples um you know families and parents create legacies and legacy plans and secure their financial future and so um part of that is also real estate we help protect it we help you the closing we help do a lot of the stuff that really should be thought of when you're thinking about buying property so if you missed the last session you can always watch it on my facebook page that topic last week was very important so you may want to watch it but it was about estate planning um this one though today we're talking about real estate we're talking about uh why you need an attorney at closing and what an attorney that's a real estate attorney actually does at the closing what do we do uh we don't just sit there and hang out and talk to the client we actually do have to do a lot of work before and the day of closing so like i said i always want for you guys to watch me on tuesdays at one o'clock central time as i share tips and legal guidance for parents for guardians or in this case for real estate uh potential sellers and buyers that are in the process of doing this or thinking of doing it so i know a lot of you have questions about some of the things we've discussed today and we're going to get to those in just a second but keep in mind that as i mentioned before having a real estate attorney on your side is one of the best investments you can make think about it this way you're buying your house or you're selling your house and there's a lot of money these are big transactions right sometimes it's even in the six figure range sometimes a seven figure range so you want to protect your investment so we're talking about why you should have an attorney what we actually do with the closing and why does it even matter and it totally totally matters and we'll talk about it in just a second one of the questions i got while i was sitting here someone had asked me is a real estate attorney required to purchase or sell a house in illinois this is a really great question because people always think it's required and that's a myth actually but i will tell you there's plenty of states that don't use attorneys however illinois is one that actually does so while it's not required in illinois that does not necessarily mean it is not a good investment it's not a good idea for the reasons i stated earlier having an attorney with a real estate transaction makes sense it's just common sense if it's a big transaction that you're buying or selling a home you want your interest protected and part of that job is having an attorney to represent you so it's not required in illinois which a lot of people are surprised when they say that however it is a great idea to have someone on your side keep in mind we do this every day you may buy and sell once in a blue moon or perhaps you do it more often than than that but nonetheless when we do this every day this is our bread and butter we know how to handle this we know how to um you know get away for some of these pitfalls that you might actually encounter if you were to do this on your own or perhaps you know kind of forego the cost but it's not worth it it's not worth it so yeah it's not required in illinois but definitely definitely recommend it highly recommended especially someone that does it every day the other question that i get every so often it's an interesting question i've had clients ask me in the past is can my mortgage broker complete the paperwork for me then have the real estate lawyer show up at the end for the closing um this is such a fun question because what what this question actually implies is that a mortgage broker can just step in explain the documents that are typically explained at the closing and that's the end we just show up at the end you know if it was that simple we wouldn't be in business right so typically yes can a broker come in and explain sure they can certainly explain some of the documents that's not against you know the rules however it's not always done that way um and quite frankly it's not a good idea to do it that way because keep in mind the mortgage lender just did the loan they don't know um they're not going to be responsible or even guide you through the things that they really are not not within their arena because that's not part of their job so it's not within their scope of work to look over the title to make sure that the title is clear to make sure the municipality requirements have been met that all the credits that you were supposed to get through negotiations and all that is on the paperwork that nothing is missed that is not within their job their job is to be your lender and to make sure you get financing for the transaction so even though it's a funny question we don't just show up at the end it's it's not recommended that you just have someone explain the documents to you because like i said this is one of the biggest investments you'll make in your lifetime so you certainly want to have someone on your side another question i got the other day is what's the cost of hiring a real estate attorney well the question is it depends who you hire because people charge different fees to be honest but keep in mind that typically when you're hiring a real estate attorney for the most part and not everybody i don't speak for everybody for the most part it's a flat fee um that you pay this means flat fee it's a one-time fee whether it's 500 750 850 whatever the fee is going to be you want to discuss this with your attorney ahead of time to make sure you're comfortable with this with the fee and it's a flat fee for the most part now is there are there attorneys that can charge hourly for the work absolutely definitely exists but keep in mind that you'll want to ask these questions ahead of time so typically a range i should say depending on who you hire it could be low it could be high um and it really usually doesn't stray away from anywhere from let's just say i'm just putting numbers out there for what i what i've seen i've seen as low as you know four hundred dollars and i see as high as you know 750 a thousand um 1500 for some of those attorneys that are doing double the work so that question really depends on who you hire but keep in mind that it's not all about the fee it's not always about the money you just have to have a transparent conversation of what is the attorney doing what is the going rate and quite frankly there's always a good point to think about with this is that when you're hiring someone it's about your investment it's not so much about the fee i think it's easy for consumers to get wrapped up on like oh wow i'm going to pay this amount but keep in mind it's for your best interest it's it's the party that helps you facilitate the transaction to make sure that the transfer of the property is clean that there aren't any issues and that your investment of many thousands of dollars is actually protected so it's money well spent that's the point the other question i get is can a real estate attorney help negotiate the purchase or sale on my behalf well absolutely we certainly help negotiate the transaction um but there is a fine line right as attorneys we can act as realtors so we're not negotiating you know initially when you put an offering we're usually not in the picture then we usually come into the picture as soon as this contract is signed but the seller and the buyer why is that why don't we get involved before well look it's not to say we can't get involved before but typically what happens is there has to be a contract signed once a contract is signed it makes it binding and makes it legal so basically at that point we get to review it and there is a time period about five business days that we get to review the contract we speak with the client make sure that everything you signed you are okay with and we approve or disapprove those terms during that time we can also make changes which are known modifications to the contract so there is a time period that goes by where we do get involved in negotiating the contract a little bit further and that is a whole conversation because it really it comes down to negotiating your inspection items if you're doing an inspection um if you're a seller you wait for the buyer to do their inspection then we kind of see okay what are the things they're asking for we negotiate that way negotiations can be in the form of credits sometimes the parties will give each other credits uh the seller will say i'll credit you for this for you know the broken window that's at my home sometimes it'll be in the form of a repair okay i'll repair this by the time the closing happens so it depends there's also other transaction when there's not a ton of negotiation perhaps you're buying the property as is which means in the condition that it's in so you may depending on your situation may not have a ton of things to negotiate but nonetheless we do negotiate those items another thing we help negotiate that's very important and i think it's that one of the most underrated things that we help negotiate is taxes sometimes properties have assessed values meaning every at least where we are in illinois every three years is a triannual assessment meaning the county assesses the property the value of it and it could go up which basically equals to the property being taxed higher so if you're buying a property and the tax rate or the tax has changed you'll want us to negotiate that for you and only someone that is familiar with real estate and does this every day and is well versed in this area can actually identify those issues so we do negotiate taxes if that comes to light another thing we negotiate is uh terms of of the contract so let's say uh for example the seller isn't moving out they want to stay they told me hey i want to stay another week and that's part of the contract we stipulate to the terms of that how long are they going to stay are they good are we going to have to pay the buyer for that and if so how much there's a lot of a lot of things to negotiate these contracts uh even though we see them every day there's always something new that i learn when it comes to negotiating because there's just so much negotiating the list goes on and that's part of our job is we negotiate to the best of our ability and of course clearing it with the client along the way so we talked about taxes we've talked about the inspection items we talked about the closing terms and all of that um another thing i talked about this earlier is negotiating um the day of closing issues so at least you know if you've been through this you may already know what i'm talking about but every so often the transaction of the day of it's closing day there's an issue with the property there's an issue in the numbers there's an issue somewhere and so if this issue comes up we negotiate that with the other side if we represent the seller we represent the buyer we basically confer with the other side's attorneys and we make sure that we negotiate those items so that you're happy and everyone goes home happy so negotiating is part of the process that's constantly happening and in different flavors so to speak but there's a lot to negotiate so that is really one of the things one of the few things that we do negotiating your behalf so i try to make the distinction between when you put in the offer and you're negotiating you know with the agents that's where the realtors get involved but as far as the contract being signed and everything that comes after it through the day of closing we negotiate a lot so yes we can certainly help you negotiate with anything regarding the contract and quite frankly you know negotiation is part of the job and i always tell people it's open-ended you can negotiate and you know as long as you want obviously but keep in mind the parties may not like that someone's not going to like negotiating more than the others so sometimes it's in your best interest to negotiate and have an attorney do it but within a certain time frame so that everyone can continue on with the transaction by the way the negotiation period that i just talked about that's within the five day period that's called the attorney review period so that's typically where the negotiations happen excuse me happen and uh they're sometimes happy and they're sometimes not happy so when we talk about this we make sure that we're in contact with you because that is where a lot of the decisions are made with regard to the transaction so i really am thankful that someone asked that question because it's important to know what is the negotiation that we're doing why does it matter and what is the services that we provide so thank you for asking that question uh the other thing is uh do we offer virtual appointments or on-site visits great question because the answer is yes we do both and keep in mind that we are offering these on continuous spaces especially with light of the pandemic so if you're interested you can always set up an appointment with us virtually or on site i think nowadays everyone is really getting used to to being virtual and people like being at home yeah you can zoom us in the jammies it's all good it doesn't matter as long as you know that um you know we're going to expect you know at least your face on there so we can really see you um but nonetheless feel free to always request that you can text us if you don't feel like calling or you can call us if you don't feel like texting but we're always here to service you and as i mentioned you can always contact me and um the consultations we have are in spanish so obama's espanol or in english whatever you guys need we're here to help so just keep this in mind when you guys are making appointments because virtual appointments are the future and we are offering them and we have no issue doing it so i want to thank all of our viewers who are watching our lawyer viewers i know who you are because you've been always checking in with me before the show i really thank all of you for joining me your questions are excellent and i always enjoy hearing feedback and hearing the questions you may have in regards to what do we do or what do i do especially when it comes to real estate so with the craziness of the real estate market as we know is really wild out there it's only gonna get crazier i strongly strongly recommend that you consider hiring a real estate attorney especially one with a reputable you know background someone who really really knows this area can assist you with the transaction and isn't afraid to really go and negotiate when the time is necessary because that's really important for part of a successful transaction there are a lot of ways a deal can go south or go sideways and at last minute it's always good to have an advocate on your side to represent you and no one else to make sure someone's in your corner ready to go to bed for you so i invite you here to join me every tuesday at one o'clock central time on pink mic legal confessions the same time same place to talk about another topic and we're probably going to cover a little bit more about real estate so you may want to stay tuned and feel free to share this with your family with your friends anyone that would think this is useful you can always check out our youtube channel my facebook page all of our pink mics are on there so feel free to chat there if you have any questions and feel free to share the recordings you have my permission so i wish you all well and i hope you have a wonderful rest of your day thank you so much for watching