If you think it doesn’t matter which attorney office you close your real estate transaction at, you could be absolutely wrong! It’s been our personal experience with clients that the law firm handling the real estate transaction can make or break the ease of closing. In one case recently with a HUD foreclosure property, a small piece of the property along the back of the property line was found on the title not to have been conveyed on two of the last sales of that property. The attorney representing the investor purchasing the property discovered this defect in the title during the title search. Since the seller was HUD, they of course had their own attorney (in some states, where allowable, the attorney handling the transaction will represent both buyer and seller). The attorney representing the seller (HUD in this case) did nothing to help clear the defect on this title). The investor (buyer’s) attorney was able to track down one of the previous owners from six years back and have them sign a quit claim deed in order to convey clear title to this new buyer. If it weren’t for the initiative on the part of the buyer’s attorney, this transaction might potentially not have closed. As it was, it closed late due to the title issues found and resolved by the buyer’s attorney.
How do you find a “good” law firm for real estate closings, you might ask? If you’re new to investing and want to find a law office you can count on time and again, you might try asking around to either other investors in your area, or your real estate agent would be a good source as this person has hopefully seen the practices of many different local law offices and can recommend those that operate the most efficiently. You can also contact the state bar association for your state to check if any complaints have been made against a law firm or particular attorney that you’re thinking of using.
One indicator of a smoothly run practice will be the experience of the paralegal staff – and their years with that particular firm! Since the paralegal staff in the law firm will do the bulk of the behind the scenes work in the real estate transaction, a law firm with a high turnover in staff will more than likely be inefficient and could potentially cause time in closing your transaction. An inexperienced paralegal staff can potentially make errors that can cause you future problems down the road—especially if your intention with the property is to resell it in the near future. We’ve seen cases where a particular law firm in our area didn’t send the deed in to be recorded and, six months later when it came time to close on that property again with a new buyer, it delayed the transaction.
In summation, if you are in a state that requires an attorney to close a real estate transaction, choose carefully your law firm. The same could also be said for a title company in such states that are not attorney states and real estate transactions are closed by title companies.
