February 1, 2022 | Lydia Blair | 5 Comments | Title Business
Do you need an attorney for buying real estate in Texas? This is a question frequently asked by out-of-state folks purchasing a property in the Lone Star State.
It can be a tricky question to answer. No title agent wants to advise someone to forgo consulting an attorney if they want one. In this litigious world, that’s risky. Hiring a lawyer before making any kind of major purchase is up to the individual.
Attorney States vs. Everyone Else
Every U.S. state has its own laws, practices, and procedures when it comes to real estate transactions. Almost half of all states are “attorney states” where an attorney must be part of the real estate sale.
In some states, title agents and escrow offices don’t exist. Attorneys are the escrow officers. In other states, an attorney may be required to supervise the transaction or handle the closing. The court or legislation in each state dictates the extent of required attorney involvement.
Texas is not an attorney state. Title companies and escrow officers handle real estate transactions in Texas. It is not standard practice to hire a separate lawyer for the purchase or sale of a home.
In Texas, the title company is a neutral third party. They do not represent the buyer or the seller. They represent the transaction and the insurance company that is insuring the transfer of the title. The real estate agents represent their respective clients.
While I would not discourage any buyer or seller who wants to hire their own legal representation, it is unusual in Texas. In my opinion, the reason most parties to a transaction don’t spend additional money on legal fees is that mortgage lenders and title companies do not allow their documents to be altered or amended. A client may bring their own attorney to the closing table to look over documents but no changes are likely to be made. In my experience, after a lot of nodding, the transaction closes as usual.
When should you hire a real estate attorney?
The time to consult an attorney is usuallybeforesigning a contract. Once the contract is agreed upon, the terms can be very difficult to change unless both parties agree.
On occasion, a transaction may be particularly complicated and a buyer or seller may need a lawyer. Some deals could involve ongoing lawsuits, estates with missing heirs, disputed liens, etc. If the title to a property is not clear, the title agent will usually let the buyer or seller know when they need to speak with an attorney.
Typically, large transactions involving a sales price of eight figures or more will have lawyers involved with the contract. And if one party defaults on a contract, sometimes attorneys get involved then too.
Regardless of how simple or complex the sale may be, both buyer and seller should feel that they have proper communication and understanding of their transaction. If they need legal counsel to do that, then they should seek it.
The opinions expressed are of the individual author for informational purposes only and not for legal advice. Contact an attorney for any particular issue or problem.
