should buyers get a lawyer to review real estate transactions?

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Submitted by ybitz on May 6, 2009 - 11:36am

First time buyer here. I know in California, a lawyer is not necessary for buying/selling a home. But would you guys recommend hiring a lawyer to review the transaction papers anyway? Or is it all fairly routine/standard stuff and I can just do it on my own, with maybe guidance from an agent?

Submitted by urbanrealtor on May 6, 2009 - 12:07pm.

I have working in California real estate for 7 years.
I have acted as a consultant for east coast closing attorneys.
The way it is handled here and there are vastly different.

For this reason, I suggest using a respected and experience agent. Here is why.

Attorneys in the tri-state area typically charge around $800 per closing per side and are generally counselors and advisors.

Attorneys in California typically charge around $250-$300 per hour and are generally litigators and watchdogs.

For high dollar-amount deals (like 2M+ commercial deals) attorneys are a good idea in California. However, hiring someone at a high dollar-per-hour fee to read the 300-500 pages that generally comprise a residential transaction file seems to be not such a great use of funds. My opinion.

Many east coast transplants, in an effort towards cost-effectiveness, use a friend who is a non-real estate attorney. This can be actually LESS effective than using a real estate attorney. The reason is that these forms we use often take some time to familiarize oneself with. I spent an hour the other day, convincing a class-action lawyer that if a check box in front of a clause was not checked, then the clause did not apply. This made a difference because his caution (which would serve him well in most cases) threatened to undo our purchase by delaying a time-sensitive counter offer.

Similarly, non-realty lawyers often do not understand the practical reality of real estate negotiation. It is not their world where negotiation is a first attempt with litigation as an alternative. In our world negotiation is all there is. If we don't negotiate, we don't deal and no purchase or sale happens.

I hope my comments do not appear to anti-lawyer. I just think that it is important to take area of expertise as well as cost effectiveness into account when dealing with important decisions.

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