There is a popular misconception that you only need to call a lawyer when something has gone wrong. This simply isn’t true—at least not in the world of real estate.
In fact, the best time to hire a lawyer is well before you have a problem. Despite our training, we do not own time machines and what you don’t know can always hurt you. For this reason, it’s important for you to know when to call for legal help.
Here are four common situations where an investor like you may need the assistance of a real estate attorney.
1. When You’re Buying a Real Estate Investment
A lawyer can be extremely valuable in helping you evaluate deeds, titles, and the terms of contracts. Too often, clients call for help after they’ve made a purchase or signed a contract that wasn’t in their best interest.
If you have a lawyer by your side throughout the buying process, you are less likely to make these types of mistakes. A good attorney can also identify potential legal problems with a property that would sail past you or even recognize a very competent (or incompetent) agent.
Most importantly, they can offer legal advice and will generally have more contract insight than an agent. Whether your state requires the use of an attorney for closing or not, a good lawyer can prove useful.
You may also need a lawyer’s help any time you’re making moves with unfamiliar legal implications. If it’s your first time attempting a property transfer or using a newly-created entity, have a pro help out.
Related: 3 Reasons NOT to Buy an LLC Online
2. When You’re Selling Your Investment Property
There are times when you may need a lawyer to assist with a sale. Generally, this will be when you are making a complex sale or one that has potential legal issues.
Examples may include selling interest in a land trust-owned property, portions of raw land, or sales with many parties or other possible complications. Similarly, a seasoned real estate attorney may notice opportunities for you to save on taxes and otherwise keep more money in your own pocket.
3. When You Need Asset Protection
If you plan to be in the real estate business for the long term, asset protection is a serious consideration. I tend to recommend that all investors have some type of asset protection strategy in place.
That said, the best way to get an asset protection strategy that is customized to your personal needs is to hire a sharp asset protection attorney. An experienced lawyer can ensure you’re setting up the best entities for you and effectively deterring lawsuits.
Note that while not all real estate attorneys assist with asset protection, most should be able to point you to someone who can. If this is your primary legal need, look for someone with the appropriate qualifications to help you.
4. When You’re Not Sure What You’re Doing
Does someone want you to sign a contract you can’t make heads or tails of? Alternatively, do you need to draft an effective contract yourself?
These, and many more mundane situations such as needing to hire or fire someone, are common scenarios that can trip up new and seasoned investors alike. It’s alright to not know everything about every facet of investing. Having a qualified real estate attorney by your side can make figuring out the best decisions for your business easier.
Keep in mind that this is not an exhaustive list. If you’re in any kind of situation where you think you might need a lawyer, spring for a consultation with a good attorney, and bring a list of your questions. Your preparation may save your backside—or keep it out of court entirely—in the future.
Any questions about any of these scenarios? When have you found it helpful to have been working with an attorney as an investor?
Let me know in a comment below.