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Navigating Real Estate Transactions: Real Estate Attorney vs. Title Company

Buying or selling property typically involves different players in the real estate transaction. Two players you’ll often come across are title companies and real estate attorneys.

Title companies are firms that do one thing really well: help you confirm and acquire a good title. While real estate attorneys do similar work, they have a broader role in the transaction. Their work ranges from drafting title documents to advising you during meetings with the seller.

These professionals play an essential role in real estate transactions, but their responsibilities differ. So, how do you know which one you need and when?

In this article, you will learn about the roles and responsibilities of title companies and real estate attorneys in real estate transaction processes. You will also:

  • Understand the pros and cons of working with each professional
  • Learn how to make an informed decision for your specific needs
  • Protect your best interests and ensure a stress-free transaction

Understanding the role of a title company

A title company is a firm that specializes in handling the title search and transfer of a property. In addition, they are responsible for ensuring that the property title is clear and free of any liens or competing interests before the sale is completed.

Disputes over title are one of the most challenging obstacles buyers face while trying to close a property. Left unresolved, they can unnecessarily prolong a sale or even prevent one in the first place. Title companies help identify any title issues that may become a problem and work with you to eliminate them before the real estate closing.

Although title companies occupy a different role from real estate attorneys, they usually have extensive legal experience and may even be staffed by attorneys. The title company acts as a third party in the transaction. Its primary role is to ensure that the property title is clear and that the transfer of ownership is completed correctly.

The title agent, an employee of the title company, will review all legal documents and ensure that they are correctly filled out and signed. They also handle the disbursement of funds and the recording of the new deed within public records. Additionally, title companies usually provide title insurance policy, which protects both the buyer and the lender from any title issues that may arise in the future.

Understanding the role of real estate attorneys

On the other hand, a real estate attorney is a legal professional specializing in real estate law. They can provide legal advice and representation to buyers and sellers during the transaction.

A real estate lawyer can help you understand your rights and obligations under the contract and advise you on any legal questions or issues that may arise. They can also review the title search and ensure that the title is clear and free of any liens or outside interests.

Additionally, a real estate attorney can assist in negotiating any disputes that may arise during the transaction. They can also review any contingencies included in the purchase contract, such as inspections, mortgage loan approvals, and closing dates.

A real estate attorney can also help with any legal disputes that may arise after the sale. Consequently, they take on a lot more work during real estate transactions and may be busy putting out several fires at once. Unlike a title company that spends all its time ensuring that you receive a good title, the attorney must focus on various tasks simultaneously.

Real estate attorney vs. title company: Which should you use?

In many states, the role of a title company and real estate attorney overlap. But still, their services may be appropriate in different circumstances. Here are a few pros and cons of hiring these professionals.

Pros and cons of using a title company

  • They are experts at investigating and resolving title problems and may assist in ways that only highly experienced real estate attorneys can.
  • They handle all the paperwork and legal requirements for transferring property ownership, which can save time and reduce stress for you.
  • They conduct title searches to ensure there are no outstanding liens or other legal issues with the property that could affect the sale.
  • They provide title insurance to protect you from financial loss if any issue arises with the property’s title.
  • They can also handle the escrow process, which ensures that the funds and documents are appropriately exchanged during the closing process.
  • They cannot provide legal advice, as their role in the real estate transaction is limited. Only an attorney can provide legal advice.
  • Using a title company isn’t always required, and some buyers and sellers may choose to handle the closing process independently.
  • Many title companies act for both parties to the transaction, which may lead to conflicts of interest. Also, their interests may sometimes collide with those of real estate agents or mortgage lenders.

Pros and cons of using a real estate attorney

  • They are experts in real estate law and can advise you on any legal issues that may arise during the real estate transaction process.
  • They can review and negotiate the purchase contract and other legal documents to protect your rights and interests.
  • They can handle any legal disputes that may arise during the transaction, such as boundary or zoning issues.
  • They can review and advise on any contingencies included in the purchase contract and handle any legal disputes that may arise after the sale is complete.
  • They may charge additional fees for their services, which can add to closing costs compared to the cost of hiring a title company.
  • They may not always be available to attend the closing, and the transaction may need to proceed without them.
  • Due to the number of tasks they carry out on the transaction, their attention may be spread thin especially if they have a small law firm.

When deciding whether to use a title company or a real estate attorney, it’s essential to consider your individual needs and the best interest of your transaction.

For example, if you’re comfortable handling the legal and financial aspects of the transaction on your own, a title company may be the best choice. But if you have legal questions, concerns, or title issues that need to be resolved, it’s best to consult a real estate attorney.

Understanding title insurance policies

A title insurance policy protects you from any title issues that may arise in the future, so it’s a good idea to purchase one whether you use a title company or a real estate attorney as your settlement agent. Also, it’s important to note that some states require an attorney to handle the closing process, so it’s best to check your state’s laws and regulations before making a decision.

You should also note that while title companies and real estate attorneys can provide title insurance policies, a title company’s policy is usually less expensive than a real estate attorney’s. However, it’s always a good idea to compare policies from different providers and understand each policy’s coverage before deciding.

In conclusion, whether you work with a title company or a real estate attorney, it’s essential to understand each professional’s role and responsibilities in the real estate transaction process. It’s always a good idea to consult with both professionals and to understand their fees and services before proceeding.


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