Investor · Tromsø, Norway (Europe) · Member since 2015 · 431 posts · 194 votes
Hi guys,
Me and my fiance will be buying our first multifamily in Jacksonville FL next year. We've been interviewing real estate agents, and recently asked them whether or not we needed a real estate lawyer to review the purchase. We were told that we do not, since they have the title company look over the contract and make sure everything is in order. I have a sneaking feeling I am being a little naive by accepting this explanation which seems vague. Does anyone know what's common? And does it depend on which state your in? I would highly appreciate any input on this, especially if you've bought multis in Florida.
@Ingrid J. you get what you pay for. Attorney's (SHOULD) bring value to the transaction. The title company employees are not attorneys and cannot advise you. @Glen Friedman's advice is prudent and @Jhon Restrepo's experience is just one of the MANY reasons you PREFER to hire an attorney even when it is not the norm/customary practice. Better to close with confidence and certainty that to follow the lead of a 3rd party who has no ethical or fiduciary obligation to you. I have represented many investors who were conducting business from abroad or outside of their home state and I know that they have slept better knowing that they had someone who is licensed, trained, experienced and INSURED in their corner making sure that things were done properly, the first time around.
I'd still use a lawyer. I don't think a title company will do such a thorough job and don't care about your legal interest besides the title as much as a lawyer would. A experienced real estate lawyer can offer legal advice on things that are not title related.
As an example I wouldn't have my lawyer do my taxes.
@Ingrid J. I’ve reviewed all my contracts by myself. They aren’t hard to read and understand. I’ve also heard Florida has some unique laws around multifamily, so I would find someone who has multifamily in Florida who can give you guidance on what you need to look for and be aware of.
I have bought properties here in Jax without an attorney.
But if you're nervous about it, please have an attorney look it over. I can recommend 2 attorneys here in Jax who are very active in the investor community.
Michelle Fusillo
Duane Romanello
Both come highly recommended. You can google each of them.
@Ingrid J. Depends on your state. Florida is an escrow state that doesn’t require an attorney. However, I’ve experienced a few closings in Florida for investment property and I don’t think the title company was doing more than telling client to hurry up and sign docs. If you have questions or concerns you might want one.
@Ingrid J. how many units are we talking? If its only 1-4 doors then a title company would suffice. If its a small apartment community 20-30 units I would use an attorney that specializes in closing multifamily commercial transactions.
Thank you guys! Much appreciated. I think we are landing on going with an attorney, as we are unfamiliar with the lay of the land with multifamilies, and would be willing to pay an attorney a fee as opposed to being sorry later on. We're not only investing out of state, but also out of country, so we need all the insurance we can get.
@Bob Floss II That's what I suspected would be the result of not using an RE attorney. We will look into having one, as we are planning to scale into larger commercial properties within 3-5 years.
@Glen Friedman Thanks! I will do my due dilligence and possibly reach out.
Of course, the joke is you don't need an attorney until you need an attorney.
When someone tells you that attorneys are not required to buy a house, does that you won't need them at any time?
The issue isn't understanding the terms of the contract, the issue is knowing how to act when either Party violates those terms.
For example, if the Seller breaches the contract before the closing or at the closing table, will the title company step in and accuse the Seller of breach and give you, the Buyer, legal advice regarding your options?
If at the last minute, Seller wants post closing possession, will the title company tell you "Don't do it its' too risky" or if the title company or Agent tells you to do it, will they tell the Seller the conditions they must accept and if they don't, then the answer is "No", PERIOD?:
My Post Closing Possession Terms:
2% holdback of Purchase Price out of Seller proceeds at closing table, $ 80 a day per diem 1/30th PITI and HOA dues paid to Buyer at closing, credit or cash, $ 400 per day penalty after the agreed upon vacate the house date, a Post Possession Escrow Agreement regarding appliances, utilities, insurance coverage, Agreement Seller does not get the Escrow until Buyer gets keys and signs the release after final walkthrough.
This is just one example of the numerous issues and problems that a Seller can throw at you.
I don't mean to generalize but Agents are working toward their commission and want/hope to "work things out" and title companies actually must act as an impartial 3rd party, which means they cannot represent you or declare that either party is in breach.
Does the average layman/consumer know how to argue for their rights under the contract, know how to word their complaint and declare with confidence that they know the Seller has breached?
I, on the other hand, as your Attorney will tell you the truth, regardless of whether or not it his upsets you or places the contract of risk of being cancelled. That is why Agents do not want attorneys involved in these transactions.
Get a lawyer, i lost 8 thousand dollars, and the title company insisted lawyer was not necesary, yeah right. The seller was foreign and there are law taxes and adendas and addendums in contracts, plus deadlines to follow, and i lost my earnest money .Pay a lawyer , o you will regret.
@Ingrid J. you get what you pay for. Attorney's (SHOULD) bring value to the transaction. The title company employees are not attorneys and cannot advise you. @Glen Friedman's advice is prudent and @Jhon Restrepo's experience is just one of the MANY reasons you PREFER to hire an attorney even when it is not the norm/customary practice. Better to close with confidence and certainty that to follow the lead of a 3rd party who has no ethical or fiduciary obligation to you. I have represented many investors who were conducting business from abroad or outside of their home state and I know that they have slept better knowing that they had someone who is licensed, trained, experienced and INSURED in their corner making sure that things were done properly, the first time around.
@John Corey Will post my question here, so others can benefit from it. What kind of insurance company did you use, and was it one the real estate agent or title company provided?
@John Corey Will post my question here, so others can benefit from it. What kind of insurance company did you use, and was it one the real estate agent or title company provided?
Hi @Ingrid J. - I have bought and sold multiple investment properties in Jacksonville and never felt it was necessary to have a lawyer review the purchase. There are only a few standard sales contracts in use and most are (imo) fairly straight-forward. Although real estate agents are specifically "not authorized to practice law" any agent worth their salt should be able to go through the contract with you, explain everything, and make recommendations regarding how to shape your offer, etc.
However I second @Glen Friedman 's recommendation for Duane Romanello. I have them do my title searches and closings whenever possible. They do top-notch work and are cheap!!
@Ingrid J. I have done about 500 deals in the Cleveland markets never once using an attorney or a realtor ( well a realtor maybe 7 times 10 years ago ) why ? Its cash as is, Title takes care of all.
Me and my fiance will be buying our first multifamily in Jacksonville FL next year. We've been interviewing real estate agents, and recently asked them whether or not we needed a real estate lawyer to review the purchase. We were told that we do not, since they have the title company look over the contract and make sure everything is in order. I have a sneaking feeling I am being a little naive by accepting this explanation which seems vague. Does anyone know what's common? And does it depend on which state your in? I would highly appreciate any input on this, especially if you've bought multis in Florida.
This will be market dependent. Every market has different customs. Some attorney's are involved. In others it's just the title companies. What is most important is that you obtain a title insurance policy any time you buy. Don't do anything crazy like purchase a property via quit claim deed. That's a big no no.
@James Wise Thank you. Noted! A follow up question: What's the biggest problem with a quit claim deed?
It doesn't involve a title search. So an extreme example would be you buying a property for say $30,000 and later finding out it's got a $100,000 lien against it.
@James Wise Yeah, that would be a problem. Coming from the financing industry myself I wouldn't ever buy a property without the title search, but it's nice to know what the term is for it here in the States. Thanks!
And thanks to everyone for sharing their experience and advise.