Do I need a lawyer to buy a home?

Posted by  on Sep 07, 2011

I'm buying my first home and don't know anything about it. A friend said I shouldn't sign anything without hiring a lawyer. Do I need one to do this?

Sometimes you need a lawyer

A lawyer can provide an extra layer of protection for inexperienced home buyers. He or she can review the contract, mortgage quotes, title report, condominium covenants, restrictions and conditions (CC&Rs), and mortgage loan documents before you sign anything. Real estate lawyers may charge a flat fee or by the hour (typically $150 to $350). In some parts of the country, you are required by law to be represented by a lawyer when you buy a home. Seriously consider bringing in an attorney when:

  • You're buying a short sale, REO or foreclosure property
  • You are not being represented by a buyer's agent
  • Sellers are providing financing
  • You're entering into a lease option
  • You're buying a condo with CC&Rs
  • You plan to rent the property out

Sometimes you don't

On the other hand, most states have a governing agency that oversees real estate sales, and it develops the standard contracts and purchase agreements that licensed brokers and agents use. In addition, in most real estate transactions a title company is involved, and it employs its own attorneys who research the chain of title before the title company will insure it. You can probably skip the lawyer when:

  • You are represented by a licensed broker
  • You are use standard, unmodified forms
  • There is a title company and escrow agent involved
  • The property is not a short sale, a foreclosure, or owned by mortgage lenders

Buyer beware

In the wake of last fall's robo-signing scandal, some buyers of foreclosure property found that the foreclosures were invalid and they didn't necessarily have clear title to their new homes. Others thought they were buying a home but really bought a worthless second mortgage. When properties are sold at auction, they're without covenant or warranty. It's the responsibility of the person bidding at auction to fully understand exactly what they are bidding on and what the implications are. Bidding on property at foreclosure auction is a very different process from a standard home purchase.


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