There are numerous complexities involved in a real estate transaction; buying or selling a home is not exactly a straightforward process. However, you do have the option to opt for a real estate lawyer who can make the process simpler for you. By now you’re probably wondering “Which states require a lawyer at closing?” or “Do I really need an attorney for closings?” But it is essential to keep in mind that there are several states that have made it mandatory to hire an attorney to complete the closing transaction.
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Can you close on a house without a lawyer?
Moreover, in some state jurisdictions, it’s also a mandatory prerequisite to hiring an attorney to gather all the documents and legal advice needed in the procedure. The lawyer will also play a part in making all the preparations and execute all the necessary paperwork.
Of course, there is no question having a real estate closing attorney to manage and review the processes involved in building or buying a house is generally a wise decision. However, there are many states that are big on having a qualified attorney present to close the deal on your new home to limit the professional liberties of non-attorneys. These states are referred to as “attorney states.”
What States Require an Attorney to Complete a Real Estate Closing (Attorney Only States)?
The state of Alabama has made it legal for non-attorneys to manage and be in control of closing transactions. However, they are limited in their role and involvement in other matters dictating the closing process. The phrase non-attorneys encompasses terms such as the assistant to an attorney, other parties involved in the home buying process (such as title companies), etc.
So, for instance, title companies are enabled to generate title abstracts as well as be involved in issuing insurance. But what they cannot do is prepare legally binding documents or deeds. These parties are also allowed to act as advisors for the homeowner, describing all the necessary and legal documents required (by the homeowner) to be presented by your real estate attorney.
In adherence to the decision taken in 2000 by the Delaware Supreme Court, non-attorneys do not have any power to and do not have any legal authorization for generating a real estate closing transaction or settlement. This means it is mandatory for you to have an attorney present to conduct the closing transaction.
The law of the land is also evident in the importance that real estate attorneys must adequately determine the legal description of the real estate. The description must be consistent with the homeowner’s mortgage and the deed. The attorney must also describe to the borrower, the specifications and terms of all the real estate documents. These include the mortgage, letter of first payment, TLD (Truth-in-Lending Disclosure), PUDR (Planned Unit Development Rider), etc.
Being a sought-after retirement destination, it is essential for retirees as well as other buyers to know that it is mandatory to hire an attorney for the closing transaction. Your attorney will have the responsibility to gather all legal documents, the necessary paperwork, and make preparations for all facets that grant the homeowner legal rights. The attorney will also have a right to determine the validity and legitimacy of the property as well as the title to the property.
The state of Massachusetts places great emphasis on having an attorney for closing transactions on any real estate. The attorney is responsible not just for closing, but they are also required to be actively involved in the processes that need to be taken care of before and during the closing. Moreover, it is illegal for notaries to conduct the closings. Also, the attorney is also responsible for determining the adequacy of the title draft, doing the deeds, and managing the legal transfer of the property.
Non-attorneys, on the other hand, are only allowed to participate in clerical and administrative duties such as titling insurance, abstracts, etc.
The state government of New York has made it mandatory for both the seller and the buyer to hire attorneys for the closing transaction. New York has very strict legal ramifications for the role of non-attorneys, which is all due to the New York Appellate Court ruling back in 2009. It is illegal for non-attorneys to be paid any form of commission or compensation for processes such as doing deeds, preparing mortgages, discharges, leases, and other dynamics involved.
In North Carolina, attorneys are given a bit more flexibility, and the same goes for non-attorneys when it comes to real estate closings. While non-attorneys do not have any legal right to authorize the closing or to implement their opinions when you talk about the title of the property, the property’s legal status, or other related obligations, they do have the power to determine the authenticity and validity of all the documents in the process.
Plainly, they can dispense the closing of the property without the attorney being present. But they are not allowed to offer any sort of legal counsel.
Although South Carolina is a neighboring state, the rules are starkly different compared to North Carolina. The state has made it obligatory for the attorney to be involved from start to finish in the closing. They have to be present before and during the process. Even after the attorney authorizes and approves the deeds and other documents, it is illegal for him to have another party stand-in for the closing.
Buying a home may seem simple on the outside, but there are plenty of legal facets dictating the process you may not be aware of. And if you reside in any of these attorney closing states, it is necessary to hire a real estate lawyer to complete the closing.
The Real Estate Settlement Agents Act authorizes licensed attorneys, title insurance companies, real estate agents, real estate brokers, and financial institutions to serve as Settlement Agents. This means that by law, the purpose of this Act is to provide consumer protection safeguards and to define who can lawfully provide real estate settlement services in Virginia. Basically, this says that Virginia’s state government requires that you have an attorney closing or title company present at closing for real estate transactions to provide you with legal advice should you need it for when you’re ready to buy a house.
Much like Virginia, for property closings in West Virginia, real estate closing attorneys coordinate the closing or settlement process for the property being purchased. A real estate agent or attorney facilitates the closing by coordinating these activities necessary to ensure that the title to the property is transferred according to the terms of the purchase, sale contract and that the funds are accounted for on a settlement statement.
Will Remaining States Abandon Attorney Closings?
Ultimately, the answer to your question varies by jurisdiction. Even within states that combine real estate and law in governance. However, in most states, real estate agents use a common set of contracts curated by the state-specific association of realtors in cooperation with the state departments of real estate. These forms get rid of the need for either party to pay fees to a real estate attorney to draft agreements. Perhaps this will provide a revelation to the hold-out states and have them relieve Attorneys from closings once and for all.
Would I still require a real estate attorney if I don’t live in these states?
While certain states like the ones listed above require attorneys at closing, not all do. And not all real estate transactions have to be as confusing as one might think they are. Say, for instance, if you live in Indiana then your state would not require that you have to hire an attorney to help with real estate closings and you could go to a notary. However, it would still be wise to check in with a real estate attorney if you have any questions prior to closing regardless of state. Check out our new Home Buyer Closing guide where we provide you with a checklist of things you’ll need so you can comfortably transition into being a homeowner.