If you are buying or selling a home, it would be wise to have your own attorney helping guide and protect you through the transaction, and the bumps along the way. In this post we will discuss what lawyers do during the home buying and selling process.
Definitions: “Attorney” and “Lawyer” and “Counselor at Law” generally mean the same thing in the United States, and we use them interchangeably on this website. Although online you may find people indicating that “attorney” means you have passed the Bar and are admitted to a court, and that “Counselor at Law” means drawing up (drafting) documents, as far as we are aware, many (perhaps most or even all?) state Bar licensing authorities do not allow you use the term “lawyer” or “counselor at law” to a client unless you have also passed the Bar. So for our purposes, they all mean the same thing.
Just to put you at ease, though, anyone holding themselves out as any of these at Home Sweet Legal™ is actually licensed to practice law!
So who are we?
Well, there are 3 basic types of lawyers you might encounter in a residential home purchase or sale and we’d like to explain what lawyers do during the home buying and selling process.
Buyers’ Attorneys – Their job is to protect and guide the Buyer, to prepare, review and modify contract documents, notices, attachments, etc. for the benefit of the Buyer, and to help facilitate getting the transaction to closing, or, if it is in the Buyer’s best interest, termination of the contract. We feel this should usually be a transactional attorney who is skilled in negotiation and getting deals done, rather than a litigator who is routinely involved with court cases. A transactional attorney is uniquely positioned to and conditioned toward “win-win” results even in the course of a negotiation with an opposing party or opposing lawyer.
Sellers’ Attorneys – They have the same job with regard to the Seller. We also feel this should usually be a transactional attorney who is skilled in negotiation and getting deals done, rather than a litigator who is routinely involved with court cases. A transactional attorney is uniquely positioned to and conditioned toward “win-win” results even in the course of a negotiation with an opposing party or opposing lawyer.
Whichever attorney is NOT yours, may be referred to as “Opposing Counsel” by your own attorney. This is just an industry term, and not necessarily meant to indicate there is some contentious relationship or some problem.
It makes clear that the other party to the contract is represented by legal counsel so that your lawyer is likely prohibited by State Ethics Rules from contacting that other party directly, but instead needs to communicate through opposing counsel.
Litigation Attorneys – If the deal is in danger of falling apart, or if one party is in breach and the other wants compensation for the breach, one or more of the parties may hire a litigator to file a lawsuit, or write a tough demand letter that will result in litigation if their demands are not met. Many real estate attorneys engage in both transactional and litigation practice, but we generally advise that due to the personal nature of a home purchase and the emotions that may be involved, that litigation counsel should be a last resort. In our experience, most issues can be worked out, and the threat of litigation often makes each side more guarded and thus prevents the dialogue that is necessary to allow the parties to work through the bumps in the road to get to a successful closing. Litigation is also generally much more expensive than the transactional side of a residential deal.
While there are situations where litigation is unavoidable, we believe that having purely transactional counsel on one or both sides of a residential transaction allows the deal to proceed much more smoothly for all involved, and we are confident you will agree.
In our next blog posts, we plan to explore the Real Estate Agents/Brokers and their important role in the deal if you are not in a For Sale By Owner situation. We hope you find the information helpful.
If you have questions about what lawyers do during the home buying and selling process, or would like to have your own lawyer to help you on your next home purchase, just click here to sign up to be a client and pay nothing up front!