What Is a Real Estate Attorney - For Investors
What is a real estate attorney, and how can they help investors? A real estate attorney is a lawyer specialized in legal matters related to properties. From vacant land to houses, apartments, and commercial real estate, a real estate attorney provides essential guidance for investors. Whether you’ve got an unclear title, want to form a partnership, or have tenants who don’t pay on time, a real estate attorney will clear the legal path.
Beyond that, an investor-friendly real estate attorney whose expertise aligns with your investing strategy will provide greater insight. Learn more about what a real estate attorney is and how working with one can secure your property and real estate investing business.
What Is the Role of a Real Estate Attorney?
Generally, a real estate attorney will prepare and review all documents signed at the closing of a real estate transaction. They are often present at the closing to represent the investor’s interest, whether buying or selling. Since real estate law is governed by state and local jurisdictions, the real estate attorney will be able to advise you on important considerations specific to your locality.
State Requirements
Some states require a real estate attorney to supervise real estate transactions and be present at closing. Other states require an attorney to certify the property title.
Attorney Closing States (A real estate attorney must be present at the closing):
- Connecticut
- Delaware
- Georgia
- Massachusetts
- North Carolina
- Rhode Island
- South Carolina
- West Virginia
Attorney Title Opinion States (The attorney needs to certify the title):
- Alabama
- Louisiana
- Mississippi
- North Dakota
- Oklahoma
- South Dakota
- Wyoming
Even if you don’t live in one of these states, it is worth hiring a real estate attorney for local compliance and advice.
What Is an Investor-Friendly Real Estate Attorney?
Not all real estate attorneys are the same. Most real estate attorneys specialize in private home transactions and will not be familiar with the unique requirements of investors. An Investor-friendly real estate attorney specialized in property transactions for investors will be able to understand and predict the unique challenges of real estate investing.
When you start investing in real estate, we recommend seeking the advice of an investor-friendly real estate attorney. How a real estate attorney can help you will vary based on your need for their service, location, and investing goals.
Even “investor-friendly real estate attorney” is a general term. The best investor-friendly real estate attorneys specialize in one or more specific areas of real estate investing. Their depth of knowledge and experience in these specialties make them a valuable resource for investors.
Some common specialties of investor-friendly real estate attorneys:
- Real estate investing
- Residential real estate
- Commercial real estate
- Raw land
- Forbearance
- Foreclosures
- Short sales
- New construction
- Senior real estate
- Probate
Once you start speaking with investor-friendly real estate attorneys, you’ll find other specialties which can open new investment opportunities. Local real estate attorneys will be familiar with some of the best opportunities in your area.
What Does a Real Estate Attorney Do for the Business Side of Real Estate Investing?
What a real estate attorney is for your business is simple: they will be an advisor and advocate on the legal structure and framework of your real estate investing business. A real estate attorney ensures your business is conducted in accordance with the local, state, and national legal procedures.
A real estate attorney will be able to answer your questions and address your needs but can also point out matters you may have overlooked or not realized were a concern. A real estate attorney is a backup to make sure you are legally in the clear, protected, and haven’t missed any steps.
Real estate attorney will advise on the business side of real estate investing, including:
- The process and documentation to form a legal entity for your real estate investing company, such as creating an LLC.
- Set up the legal structure to work with others, such as partnerships, joint venture agreements, or operating agreements.
- Support in the case of disagreements or misunderstandings. This includes handling judgements, disputes, litigation, breach of contract, or issues related to contract performance.
- Create a real estate syndication. A real estate attorney can set up the legal framework in which you will pool your money with other investors together to invest in larger properties or commercial real estate. This is called syndication.
What Does a Real Estate Attorney Do for the Real Estate Side of Investing?
A real estate attorney doesn’t only protect the business side of real estate investing, they also advise on many important aspects of real estate transactions — from creating contracts to researching liens, titles, and zoning.
What is a real estate attorney for real estate investors? The answer to this will depend on your real estate investing strategy. They can offer key insights and point out what needs greater review, especially in the preparation of contracts.
A real estate attorney can prepare:
- Wholesaling contracts
- Assignable contracts
- Listing contracts
- Offer contracts
- Land contracts
- Lease agreements
- Lease options
- Sandwich lease options
- Loan workouts
- Many other types of contracts and legal agreements!
Real estate attorneys also support investors with:
- Mortgage disputes
- Homeowners association review
- Probate issues
- Liens and assessments
- Title review of ownership
- Issues with tenants
In your real estate investing experience, more complex issues can come up. Having a good working relationship with a trustworthy real estate attorney will ensure you take swift and correct legal action.
Real estate attorney can advise on complex situations like:
- Purchase at foreclosure auction or assistance with foreclosure proceedings.
- Understanding the liabilities of an unusual real estate transaction.
- Buying or selling a commercial property with existing tenants.
- Purchasing of real estate to house a business.
- Issues with tenants of rental properties.
- Land, title, or environmental issues related to a property.
- Advice on the legal requirements for real estate investing unique to your state or region.
What Doesn’t a Real Estate Attorney Do for Real Estate Investors?
The question “what is a real estate attorney?” shows how attorneys provide comprehensive services for both business structures and the real estate investing process. However, they don’t do everything. Real estate attorneys practice real estate law.
TIP: Real estate attorneys do not necessarily practice the buying and selling of real estate that most real estate agents do. They are not a replacement for an investor-friendly real estate agent.
In the real estate investing world, many real estate attorneys do choose to become real estate agents or brokers as well. These agents practice all aspects of real estate law as well as the buying and selling of real estate.
What real estate attorneys do NOT do:
- They won’t advise on the value of a property.
- They won’t provide lead generation.
- They do not provide marketing.
- They do not negotiate with prospective buyers. (They advise you, and then you, or your real estate agent, will have to negotiate for the purchase or sale of the property.)
- They do not show properties, compare comparable properties “comps,” provide estimates, or any other services offered by real estate agents, inspectors, or appraisers.
The answer to the question “what is a real estate attorney” is that real estate attorneys will review contracts, titles, liens, and other legalities of investing in property while advising you on the best course of action. Their service is invaluable, but it does not replace an investor-friendly real estate agent.
Conclusion
A real estate attorney is a valuable resource for new and experienced investors in real estate, especially when you are just starting out and have so much to learn about real estate investing. From working with a real estate investing mentor to estimating repairs and getting an inspection or an appraisal — a real estate attorney gives you security and peace of mind about the legal aspects of real estate investing.
While setting up an LLC or creating partnerships, a real estate attorney can help with the formation of legal entities to build a real estate investing business. A real estate attorney can also advise on all types of contracts and legal situations unique to your real estate investing focus.
Hiring a real estate attorney is a small price to pay for the security and assurance they bring.
Read on for our frequently asked questions about the difference between a real estate attorney and a real estate agent — and why you need both when you start investing in real estate!
Real Estate Investing Frequently Asked Questions
Wholesale real estate investing allows you to gain experience in the real estate investing game from home. You can get started with your wholesale real estate investing business by getting in the right mindset, properly setting up your business, verifying the legal requirements, learning the wholesaling process, and jumping into wholesaling.
Starting your own buy and rent real estate business gives you an additional monthly income and is a good option to start real estate investing. The first steps for owning a buy and rent business are making a plan, getting a team together, choosing your property type and market, getting funding and making an offer, rehabilitating the property, and, finally, renting it out.
We’ve got you covered with guides to help you through the entire process, from researching target neighborhoods to calculating rental revenue and preparing an income statement.
If you’re wondering how to form a limited liability company (LLC) for your real estate investing business, the process is easy:
- Choose your LLC name
- Find a registered agent
- File your LLC formation documents with the state
- Create an LLC operating agreement
- Get an Employer Identification Number (EIN) for tax purposes
Check out our How to Form an LLC guide for more information.