Chatham County North Carolina Real Estate Agent Eric Andrews discusses real estate attorneys and what has changed over the years in our area. This video is also good for anyone anywhere who is seeking unbiased information on attorney selection.
Speaker 1: What do you look for in a good real estate attorney?
Speaker 2: Well, in North Carolina, attorneys, they’re allowed to do real estate closings, but certainly you want someone that has a specialization in real estate. So often, what we have is we get into situations where someone’s buying a property from us and they say, “Uncle Fred is an attorney. He’ll do the closing for us.” Or, “My wife’s best friend is an attorney. She lives next door to us. She’ll do the closing for us.” And of course it’s good to know people, but you want someone that has familiarity with real estate closings and specializes in real estate closings. So we’ve had a bunch of changes in the lending process. Like for instance, in Chatham County, at one time almost all the attorneys in the county did real estate closings, and it supplemented their income, but very few attorneys actually specialized in it. Then with Dodd-Frank, Congress passed some lending institution changes and there’s a lot more that an attorney has to do when it comes to having a mortgage with a closing. They have to use encrypted email, they have to have secured files, they have to have locked files, they have to be separated.
So it quickly evolved into a bunch of attorneys in the area, because of all the changes, stopped doing them period, but there were still attorneys that would do it if it was owner financing or if it was a cash deal. So I just think it’s hugely important that you actually use an attorney that is familiar with the process and not only that, they have a staff that is familiar with the process. There’s a lot of good attorneys out there and I’m not making fun of my real estate attorney friends and vendors that we use, but most of those will tell you that they have to have a strong paralegal, they have to have a strong staff. So it’s very important for me, for my staff to have a close working relationship with their staff. Because I mean, so my administrators and closing coordinators, they’re the ones who are doing a lot of the back work while I’m out showing or listing properties or what. Whether or not I’m negotiating a contract, my staff is coordinating with that paralegal at the office to make sure that it’s a smooth transaction. And the loan officer.
So you’ve got a loan officer, paralegal, and my admin staff, and those are the true workhorses behind the scenes. So if you have a real estate attorney that’s not someone that specializes in it, they’re probably not going to have that paralegal. And the other thing too is you want, even if they specialize in it, you want someone who is a good communicator. So the attorney and their staff has to be a good communicator. You can’t come up to us last minute and say, “Oh, we have a cloud on title,” or one of the most horrible ones that we get all the time, the day of closing someone paid off a loan, but there is no cancellation of a deed of trust. So until they have that cancellation, nothing can close and you could have that cancellation of deed of trust and it might be with a mortgage company that doesn’t even exist anymore. Guess what? That’s not getting done in an hour or two. I mean, that can take several days. So a lot of attorneys do wait until the last minute to do anything.
Because they have very busy schedules and real estate agents and buyers and sellers sometimes, not all deals close and the attorney doesn’t want to put a ton of work into that if it’s not going to happen. But at the same time, I think some of your better paralegals and your closing attorneys are going to do that work a little bit more in advance so there’s no surprises. Even though there’s some real estate offices that do a lot of real estate closings, we’ve had situations where the real estate attorney wasn’t familiar with the updated contractor, didn’t know what due diligence was. So it’s very, very important to us that the real estate attorney actually have a clear understanding of what a real estate contract is and how the real estate contract is intended to work. Because we get into bad situations. I mean, we’re negotiators, but there’s like, “This is what we want.” “This is what we want.” And it’s important to know what you can or can’t do in that contract. We’re a rural area, so we always have issues with propane, inner propane tank.
Well, who owns that? Is that personal property or is that… The seller’s like, “I’m not giving them my propane. I’m taking that back.” Really? Where are you going to keep it? Where you going to take it. And then, of course, the buyer’s like, “You’re not taking my propane. It was in the tank when I looked at the house, that’s my propane and everything.” So it’s very, very clear in the contract who owns that propane, and if you’re dealing with a real estate attorney that’s like, “I don’t know. I don’t know about propane.” I mean, you want them to have a familiarity with what we do.
Speaker 1: What does a real estate agent charge for closing?
Speaker 2: A real estate attorney?
Speaker 1: Yeah.
Speaker 2: A real estate attorney. Yeah, so there are several fees. You have the real estate closing, which can be like $400 to $1,100, but then you also have title insurance and one of the things that’s not known throughout is real estate attorneys that have fewer claims against them get better rates for title insurance. So if you use a real estate attorney that’s had a bunch of claims on them, their title insurance is going to be higher. Also, there are real estate attorneys that have had some hiccups and that title insurance company now says that that real estate attorney is off of our approved list, so that attorney can’t even use that title insurance. And there are some really good title insurance companies in the area and if your real estate attorney can’t use them, then they’re probably not going to get the best rate for you. And then to be fair, I mean, the real estate attorneys are asked to do an awful lot.
There are courier fees and payoffs and negotiations with a bank and the cancellation of deed of trust or whatever and so all this stuff needs to be sent and FedExed, so they do charge shipping fees or whatever. So I’d say right now, on an average residential closing, we’re probably talking about $1,300, $1,400, which is probably double what it was four or five years ago, before they instituted all these new rules.
