All real estate transactions are held together by a web of legal documents which may include listing agreements, contracts, trusts, and deeds. While sellers should regard legal fees as a necessary expense of selling, there are steps that can be taken to reduce this cost.
Although legal needs vary greatly among sellers there are two general rules: 1) retain an attorney well before you place your home on the market; and 2) have your lawyer review all documents before signing.
Those selling through a broker typically face only the most minor legal expenses. Brokes write contracts while settlements attorneys handle the closing details of the sale. Here the legal needs of a seller are most likely confined to a review of the listing agreement used to retain a broker or brokers, the sales contract, and the closing documents before settlement.
Self-sellers usually require an attorney for contract work and to review settlement papers. An attorney should supply contract forms to the seller and describe the full meaning of each clause. Of particular importance is the ability of the attorney to advise a seller about specific legal language, so-called contingencies, which may be needed.
As an example, a seller may not want to finalize a contract until a second home has been purchased. An appropriate clause can resolve this common problem.
Sellers can reduce legal fees by taking several steps. Shop around for an attorney. Find one who has worked with both brokers and self-sellers. The names of such attorneys are available through lenders, other sellers, and brokers. Bar associations have referral services that can be useful, particularly when lawyers are listed by specialty.
Prepare (for your meeting with an attorney. Bring the contract from when you bought your home and copies of trusts and deeds. Study your old contract. Make a list of questions. Do not ask the attorney to do unnecessary work. For example, order your own appraisal.
Fees for legal services differ but should range from $200 to $400. Hire an attorney at an hourly rate and obtain a letter confirming an agreed fee, listing anticipated services, and indicating a probable maximum expense.
In looking for an attorney sellers should be wary of several practices. First, never hire an attorney who charges a fee based on the value of a house. Second, do not rely on the lawyer who represents the broker or buyer. In turn, never recommend your attorney to another party in the sale. Third, be aware that an attorney who conducts settlement, though hired by one party, is an agent of the settlement process. Fourth, avoid lawyers who offer "free" legal services in exchange for other considerations such as settlement work.