Trying to decide between using a real estate agent or real estate lawyer for your next major property transaction? While a real estate lawyer may be able to save you money in the short term, you'll likely pay for it. Learn why a full-service real estate agent is the right choice for you.
A common question among people trying to save when selling a home is whether they can simply hire a real estate lawyer in lieu of a realtor — or vice versa.
The short answer is probably not. Each provides a different set of services and support, and both are arguably necessary to ensure an optimal outcome on your home sale. Many states even require that an attorney be present at closing.
If you're worried about costs, one solution is to work with a low-commission real estate agent.
These agents provide full service but for a fraction of the typical cost — saving you up to 50% on realtor fees.
They'll help you navigate the complicated home selling process and you can put your savings towards a real estate attorney, your moving costs, or wherever you need it most.
Here's everything you need to know about real estate attorneys versus agents: what they do, typical costs, and how to save.
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Want the short answer? The real estate lawyer is cheaper. But in most situations, the savings still come at a high cost. Here is everything you need to know about making the best financial choice for your situation.
Following the Law
Usually, you're not legally required to use a real estate agent to buy or sell a home. However, in some states, only a lawyer can do things like preparing the contract of sale, dispensing legal advice, performing a title search, and officially closing the deal.
Because of this, if you buy or sell a home without a realtor, you must hire a lawyer for the closing day, anyway. To find out the laws for your specific state, click here.
Why Do I Need an Agent, Anyway?
When buying or selling a home, most people do not realize just how complex the process is.
There is a lot of paperwork, including the purchase contract, closing documents, and more. There are lots of small details that can't be overlooked. Things like inspections and negotiations move quickly.
Because of this, it's helpful to have a professional with years of experience and connections in the field on your side. You'll likely get a higher selling price, a professional who can help you run open houses, and the help you need to get into a new home quickly. Also, only a licensed agent will have access to your local MLS.
Someone who can be an advocate for you to ensure you get the best price in the shortest amount of time. And, one can hope, with the least amount of stress.
But these services are not free. Sometimes people feel like an agent's commission (typically around 6% of the final sales price) is not worth it. So they strike out on their own.
Buying Without an Agent
A quick caveat for home buyers who want to purchase a home without an agent: do not use the selling agent. It's not in your best interest. If you come to the negotiating table without an agent, especially if you are planning on using a real estate lawyer during the closing process, stand your ground.
If you have no representation until closing, it might feel like the listing agent is totally in charge of the process. Whatever you do, do not agree to a “dual agency” relationship. This is when the same agent represents both the buyer and the seller of the property.
This is because this is rife with conflicts of interest, especially when negotiating at the real estate closing.
Staying in Control
If you are buying without an agent and only want to use a real estate lawyer for closing, then it's important that you remain calm and in control of the whole process. Be proactive about the house you want, including checking for new listings and making offers quickly.
If you are selling without an agent, stay on top of market trends in your area. This way, you will be aware when a reasonable offer comes your way.
In both cases, remain calm and consciously educate yourself about the market and legalities of property transfer. This way, you can avoid simply being told to “sign here” without knowing what you are getting.
Why Do I Need a Real Estate Lawyer?
Is it cheaper to hire a real estate lawyer than an agent? Usually. But you get less support. In most states, you do not technically need either a lawyer or a realtor to successfully complete a real estate transaction.
But sometimes, it's a good idea to have both. This is because while many parts of the property transfer process are now standardized, certain legal situations can arise that both you and even the most qualified realtor cannot give advice on.
Things like renting a home before you own it or purchasing a home with a tenant are just two of these situations.
How Much Do Real Estate Lawyers Charge?
Lawyers famously charge by the hour for legal issues or just talking to them.
You can expect to pay between $150 and $350 an hour for a real estate attorney. However, there are also typically representatives who will charge a flat fee for a service like preparing documents of sale or reviewing a contract.
When working with a lawyer, you are in control. You can decide beforehand how many hours you will pay for. This way, you don't need to just write a blank check and hope you don't go over budget.
Even with this high hourly fee, it is often cheaper to work with a real estate lawyer than a real estate agent, but this is because he will do less work for you.
How Much Do Realtors Charge?
Realtors typically charge a 6% commission of the final sales price. The commission goes to the seller's agent (and part of that goes back to their real estate broker). They then split it with the buyer's agent.
Then, the seller's agent has to pay their brokerage firm or home real estate office, and any agreed upon fees in relation to the sale of the home.
So, for a sale of a $200,000 home, the commission is $12,000, or $6,000 for each agent.
When you work with a real estate lawyer, you will pay significantly less than that.
However, the time and energy invested in the transaction because of this choice might not be worth the savings, and you may get less than market value for your home.
With Clever, you can work with a Partner Agent to save money while still getting the full service and support of an experienced agent. You'll only pay $3,000 or 1% of the home price over $350,000 in listing commission.
You may still pay more than a real estate lawyer, but you'll save thousands over working with a traditional agent.
Sell or Buy a Home with Clever and Save Thousands!
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FAQs about Real Estate Attorneys vs. Realtors
How much does it cost to hire a real estate attorney?
In most states, a real estate lawyer isn't necessary. The fees vary, but you will typically see two models. Many charge hourly, with rates that range from $150/hour to $350+/hour, while others offer a fixed fee to conduct closing, especially in states where this is required. If you hire a real estate attorney, expect to pay between $500 to $2000, depending on the services you need.
What does a real estate attorney do for a buyer?
If you're buying a home, especially for the first time, you probably don't know what you're doing. A real estate lawyer can do everything from looking at the seller's deed and title chain to being present as the closing attorney to ensure things go smoothly. Real estate attorneys can also dispense great advice, including problems with a particular property and help finding partners to work with, like a lender, title company, appraiser, and more.
What is the difference between a real estate agent and a real estate attorney?
Ultimately, they have different jobs and functions. A real estate agent, when buying, helps you tour homes and find the right one for you. If you're selling, an agent lists your home and will get you the best price, including negotiating with a buyer's agent. A real estate lawyer will usually oversee closing, perform title checks, and otherwise ensure that the transaction is legally sound. Sometimes, like a for sale by owner transaction, a real estate attorney or transaction coordinator can sub in for an agent.
What states require a lawyer for real estate transaction?
There are several states with laws that require the physical presence of a lawyer during closing of a real estate transaction, including Alabama, Connecticut, Delaware, Washington, D.C., Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and West Virginia. These requirements can change as new legislation passes, so check with a local real estate professional to ensure your transaction complies with local ordinances.