OWM Blog – I’m Buying Real Estate from my Friend – Do I Need an Attorney?

Real Estate Attorney: Buying from a FriendRealtors play a great role in the buying and selling of real estate.  The realtor will help the seller establish the listing price, and sales price range, and will help market the property, investigate potential buyers, prepare the Agreement of Sale, negotiate the terms, attend settlement with the seller, etc.  The Buyers can also use the services of a realtor to negotiate terms, help them find financing and a title insurance company, etc.  However, both the Seller and Buyer should strongly consider each hiring their own attorney to work in conjunction with their realtor.

I often handle matters where there is no realtor involved and the parties have found each other in a private real estate transaction.  The question I usually get, from a Seller or Buyer, in a private sale, is do I need an attorney?  Why do I need an attorney if I can just pull documents from the Internet?

Yes, the Internet is replete with various and assorted legal documents that purport to assist with various and assorted legal transactions (i.e. real estate).  However, I have handled many matters throughout my career where the parties have used “homemade” legal documents that have caused more trouble, and incurred significantly more legal expenses, than they were intended to save.  As such, I highly recommend that a Seller retain a real estate attorney in Pottstown or Phoenixville to help them with negotiating the terms of the transaction, preparing the Agreement of Sale and related transactional documents, represent them through, and including, settlement, etc.  The Buyer should also retain an attorney to assist him/her in negotiating the terms of the transaction, reviewing the Agreement of Sale, finding a lender to handle the financing, place title insurance and conduct closing, etc.

I certainly understand that parties in a private transaction want to be cautious about their costs and they feel that an attorney may be a luxury that they cannot afford.  It has been my experience that often times an attorney is a luxury that a Seller and/or Buyer in a private transaction, or even in a transaction in which a realtor is involved, cannot afford to be without.  We recommend that both parties engage an attorney at the beginning of the transaction so that their respective counsel can assist in the above.  It is much more expensive to have an attorney get involved after the documents are prepared and a problem arises.  Documents that parties use from the Internet often look good but really do not address the issues and protect the interest of the parties.  They are often not appropriate for Pennsylvania and do not follow the formal laws or informal traditions of real estate transactions that occur in Commonwealth.

My dad used to always say “you get what you pay for!”  There is a reason why documents obtained from the Internet are cheap, if not free…they are usually not very helpful if a problem arises in the course of, or after, a transaction.  Contact your attorney and have them assist you with the sale/purchase of real estate, even if there is a realtor involved.  Each party should talk to their realtor and inquire as to what local attorney their realtor recommends.  Do not be shortsighted – an ounce of prevention is worth a pound of cure.

This article was written by: David A. Megay, Esquire