Once the contract negotiations are complete and the contract is signed, it may seem like the hard work is done. But getting to the closing will require more work. Buying or selling a home is an involved process that is heavily regulated by state laws and there are many issues that come up after the contract is signed, including the home inspection, the bank appraisal, financing and underwriting, title issues, the walk-thru inspection and related matters. It is important that buyers and sellers of real estate have experienced professionals to represent them during the entire transaction.
Unlike many other states, Virginia does not require buyers or sellers of real estate to use an attorney for the real estate transaction. Instead, buyers have the option to choose an attorney or a title company to handle the closing and the seller has the option to choose an attorney or prepare his own deed and closing papers. It is illegal for anyone other than an attorney licensed by the Supreme Court of Virginia to prepare any deed or other legal documents for another person. This raises the question for buyers and sellers of what the benefits are of hiring an attorney over a title company. In this post, we want to share with you reasons why a title company is not a good substitute for a real estate attorney.
- The costs of hiring a title company vs. an attorney are comparable: Many people believe that a title company is less expensive than an attorney. Our firm and most other local real estate attorneys charge approximately the same amount as title companies. We have even seen some title companies charge more than our typical closing fees. But, hiring an attorney can actually save you money because of the many legal issues that arise during the transaction.
- Title companies cannot provide legal advice: If you choose a title company to handle your transaction you are limiting your ability to obtain answers regarding legal questions that arise during the transaction. Employees of a title company are precluded from giving you any legal advice, for example, how should you take title? what are restrictive covenants and are they enforceable? what does the survey mean and are there any easements? will transferring your property to a trust leave you without title insurance? are you in default under the contract? An experienced real estate attorney will provide necessary legal advice to you regarding the transaction and completing the closing. If you hire a title company to complete the closing and then find yourself in need of advice from a real estate attorney, you will then end up paying separately for the closing and the legal advice.
- The realtors benefit from working with an attorney too: The realtors working on the transaction benefit from an attorney handling the transaction because the attorney can assist the realtor with a necessary addendum or answer legal questions posed by the client’s during the negotiations or leading up to closing (usually at no additional charge). A title company is prevented from doing so.
- Issues that arise in the title search or survey: If issues arise in the title history or on the survey, a title company cannot provide legal advice or guidance on these issues. When the title company is the closing agent and these issues arise, the buyers must find an attorney to address these issues, sometimes causing a delay and at additional expense. If a real estate attorney is handling the transaction, the buyer has representation throughout the entire transaction with a professional skilled at resolving these issues to ensure a smooth closing process.
The attorneys at Smith, Barden & Wells, PC strive to ensure that your real estate sale, purchase or refinance is as seamless as possible. Give us a call today to discuss your transaction.