Should You Use an Attorney for Your Closing?

As published in The News-Press September 4, 2010

Should You Use an Attorney for Your Closing?

By D. Michael Burke

In the State of Florida, attorneys can be trained and licensed in title underwriting, but many homebuyers and sellers don’t know that they could use an attorney for their closing. Others are simply reluctant. There are many reasons why agents and their clients shy away from using an attorney to close, but many of those reasons are based on misperceptions of what an attorney does.

My point is, there are many benefits to hiring an attorney for your closing. Often real estate agents will say it is not necessary if a client asks whether they should hire an attorney, but the truth is that a title company cannot offer the same level of service that an attorney can.

When my clients ask about having an attorney handle their closing, I generally recommend a c olleague and friend of mine, Sharon Zuccaro. With 23 years of experience as a real estate attorney, I couldn’t think of anyone better than Sharon to consult with on advising my readers on whether to use an attorney for their closings. Sharon is a partner with the firm of Henderson, Franklin, Starnes & Holt, P.A. in Bonita Springs.

According to my discussions with Sharon, there are three major reasons to choose an attorney over a title company for your closing:

1) An attorney can provide legal counsel.

The biggest reason why you should hire an attorney is because of the availability of legal advice, something a title company can’t and won’t offer. "A title company can only prepare the legal documents in conjunction with the transaction that it is insuring," Sharon explained. A title company doesn’t offer any customization for your particular case, and they certainly don’t offer legal counsel. "They can tell you there’s a title defect which necessitates hiring an attorney, but they can’t correct the defect or advise you what to do in order to correct it."

And don’t assume that problems won’t occur. Many closings go smoothly, but many don’t. For instance, under an attorney’s watchful eye you may discover code violations, HOA regulations and local ordinances that will prevent you from using the property the way you want, or contract language that is not legally binding. Short sales and foreclosures may also require an attorney’s expertise. For instance, if the home is occupied, what will you do about the tenants?

A title company cannot help you resolve any of these issues. "Some of these questions can be handled by your real estate agent, depending on the sophistication of the agent," Sharon said, noting that many won’t because of the liability if they give bad advice.

2) An attorney is looking out for your best interests.

Besides having the availability of legal advice if you need it, having an attorney to cover your closing also means that you have someone in your corner, so to speak. An attorney can make sure that you will be able to build on the property the way you want, for instance. They can keep an eye on your contract deadlines and make sure you don’t miss any. When they read through the contract to make sure it is legally binding, they will also be making sure it is all in your favor. Anything that could be a problem later on down the road, they can bring to your attention, and help you resolve.

A title company, on the other hand, is a neutral third party whose scope of services do not including monitoring contract deadlines. "With an attorney, you’re getting someone who is looking out for you, and is promoting your best interests," Sharon said. "That’s important, because if something goes wrong, if contract deadlines are missed, you could lose your deposit – or worse."

Don’t underestimate the value of having someone with this kind of expertise looking out for you. "Often the buyer thinks that as long as they get title insurance, they are good to go," Sharon said. "But the clear majority of buyers don’t really know how to read and understand a title insurance commitment or policy, and my impression from client feedback is that title companies do not thoroughly review with its customer title insurance coverage or lack thereof."

Often real estate agents, and even their clients, drag their feet at the thought of involving an attorney, because they perceive attorneys as deal breakers. Sharon cautions against this assumption, however. "If the client wants to close, that’s the goal of the client, and the attorney should serve to effectuate the client’s goals," she said. A good attorney will work with the other parties as needed to make it happen. That’s the point of an attorney – to help you achieve your goal while still looking out for your interests.

3) An attorney is more affordable than you think.

One of the biggest deterrents to hiring an attorney, Sharon believes, is a mistaken belief that it will cost too much. The opposite is true: Closing attorneys have become extremely competitive with the title companies. Yet as she points out, you get so much more. "You’re buying more than just title insurance – you’re also getting representation and legal counsel during the transaction."

Investing in a home is a significant transaction, probably the biggest purchase you will ever make. Hiring an attorney to handle the closing ensures that someone who understands the finer points of the transaction will be looking out for you. Although it may seem like a title company and a closing attorney offer the same service, in truth the attorney offers peace of mind that the title company simply cannot provide.

What it all comes down to, Sharon said, is that an attorney gives you more benefit for your money than a title company. "A title company is limited to issuing title insurance," she said. "I can offer a lot of other benefits in addition to that."

As an agent specializing in Southwest Florida’s luxury real estate, I can tell you that you can’t put a dollar amount on peace of mind – but when it costs about the same as something you have to have anyway, it would not make sense not to take it. If you have further questions Sharon Zuccaro can be reached at Henderson, Franklin, Starnes & Holt, P.A. in Bonita Springs at (239) 344-1100.

Contributed by D. Michael Burke, P.A. Keller Williams Elite Realty
Michael@CoconutPointRealEstate.com / www.CoconutPointRealEstate.com