Should I hire a real estate agent to buy the house or should I hire a lawyer?

It’s no secret that real estate agents receive high fees. The fees are usually paid by the seller, not the buyer, but can be passed on to you indirectly in the form of a higher list price. And real estate lawyers charge absurd hourly rates. This raises questions. Do you need a real estate agent or lawyer to help you buy a home?

What does the law say about Home Buyers Hiring Realtors or Lawyers

Each state in the United States has its own real estate laws. Most real estate agent help is not required by law, but a real estate agent can help you with tasks that are close to legal, such as writing a home purchase agreement.

This is not the case with attorneys. In some states, such as New York and Massachusetts, only a lawyer can prepare a home purchase document, perform a title search, or close a transaction. This will leave a lot of work for the real estate agent, but it will require some teamwork. Any real estate agent can tell you what your state’s custom is.

Why Home Buyers Hire Real Estate Agents

The process of buying a home is complicated, and most people find it easiest to do with the help of an agent. The paperwork will blow over like a small tornado. Other parts of the transaction will also be done quickly. Hire inspectors, negotiate who pays for necessary repairs, maintain a good relationship with the seller (through the dealer), etc.

These are all second nature to an experienced real estate agent. In addition, experienced brokers usually make contact with good inspectors, mortgage representatives or brokers and others who can make the buying process easier for you. And they know what is considered proper behavior and practice in your geographic area.

Turn off the Seller’s Agent.

One of the best reasons to hire a real estate agent is that sellers are more likely to use their own agents. And you want to prevent that agent from taking over the process.

In fact, the seller’s agent can pressure you to represent both the seller and the buyer in a “dual agent” relationship that mostly benefits the seller. (A less bona fide seller’s agent doesn’t make it clear that he works for two people, but if only one agent is involved in your transaction, it’s fair to assume the agent’s loyalty.Make an alliance with the seller.) Instead of settling for dual agents, they have their own agents, or some experts say they have no agents at all.

Even if you’re a real estate agent, you’ll want to play an active role in the buying process.

You’re the only person who knows what you want in a home. Even if your agent is looking for a home for you, there’s a lot to be said for going through the listings and attending an open house yourself if possible. (Since the Corona 19 pandemic, traditional open houses for private tours have been restricted or canceled in some parts of the United States; however, they are returning.k)

The agent may misunderstand your needs or may not show a “FSBO” list (sold by the owner). If this is the case, you should take proactive steps during this process.

Even with a real estate agent (or attorney), it is wise to learn as much as you can about the home buying process. For example, researching the market value of similar homes in the area can protect you from too many dealers who may force you to bid high on certain homes. Also, if you study the contents of the various property documents beforehand, you won’t be misunderstood and will be less stressed when you hear the word “Sign here.”

Why hire a lawyer to help you buy a home

With the exception of a note where it is provided for, general real estate transactions do not need the help of a lawyer. By now, real estate transactions are so standardized that most people in your state will use the exact same contract of sale (usually drafted by the state Association of Realtors) if they fill in a few blanks.

But you may run into legal problems that your real estate agent can’t answer. In that case, you’ll need the help of an attorney. Good agents know a lot about the negotiation and contracting process, but they can’t pass judgment on legal issues.

For example, what do you do if your new home has an illegal apartment with an existing tenant you want to evict in order to rent the place to a friend? Only a lawyer can say with certainty whether your plan is workable. Or what do you do if you want to rent for a long term, like a year, before you buy a binding home? You’d have to write an unusual lease to do that. Alternatively, if you’re writing a purchase and sale agreement in unusual language or are worried about the wording contained in the mortgage loan, we recommend you review the document with your attorney.

How do real estate agents get paid?

Real estate agents usually work for a fee, not a salary. They get their cut only after your home search is complete, the contract is negotiated, and the deal is done. (Buyers often refuse to do much because they lose interest or can’t close the deal.)

Sellers usually pay a commission to the seller’s agent and your agent. Typically, about 5% of the sales price is split between the two agents (sometimes equally, sometimes in favor of the seller’s agent who does most of the work). However, this ratio has not been determined. For example, if the house is particularly expensive, the seller may negotiate a lower overall rate. (And in investigated sales, the court sets the fee.) Some buyer’s agents have been known to give a portion of the commission to the buyer on a fixed date.

There are also variations in the general fee rules. For example, some buyers prefer to hire an agent and pay the commission directly, which they believe makes the agent more loyal to the buyer’s interests and provides a reason to lower the sale price. Generally, you can find agents who want to perform tasks that are limited to an hourly rate rather than a full fee (in which case you can also ask the seller to lower the sale price accordingly).

Conflict of interest is inherent in an agent receiving a commission

Even agents who only represent you and not the seller have a monetary interest in closing the deal. Experienced and reputable dealers won’t let that stop you from advising them, but it can hurt your interest if less-than-conscientious dealers declare that you’ll never get a home unless you offer a high price, recommend home inspectors who downplay potential problems, or otherwise.

How to pay a real estate lawyer’s salary

Attorneys usually charge between $150 and $500 an hour. You can also find lawyers who charge a certain fee for certain services, such as completing real estate closing documents.

Although many lawyers prefer to handle the entire case with a white paper on the time required and the duties to be performed, you can hire an attorney and refer you. If you only hire an attorney for limited time, answering legal questions, reviewing documents, or performing certain tasks, you can negotiate (and you must document the agreement in writing).