Active Rain July 16, 2009

Why Use an Attorney in a New York Real Estate Transaction?

Do you really need an attorney to buy or sell real estate in Westchester County? I was posed this very question by a first-time buyer recently. I asked Lisa Fantino, attorney, author, and friend, for her perspective.

I cringe each time a realtor tells me the seller or buyer is going to represent themselves in the sale or purchase of a home.  I’m a lawyer and I would NEVER represent myself in the biggest financial transaction of my life (not counting law school tuition payments!)  I know that we are all looking to cut back these days but why would you look to cut back on a $1,500 fee when the home may cost $500,000 and the realtor is probably getting a $20,000 to $30,000 commission?  There’s a reason they say “penny wise, pound foolish,” saving a little money only to lose a great deal more due to your own stupidity.

The fee you pay your attorney will be your best small investment on this large transaction.  Why?  The answer is simple – they are the only one looking out for your best interest.  Sure, you can listen to the realtor, who may or may not know the history of the house.  But your new dream home may hold many hidden secrets and they’re not always visible at first blush.  So here’s some advice from this Westchester attorney before looking for, let alone bidding on, your new home:

  1. Work with a real estate agent who listens to your needs.  If you are the seller do not let the realtor have the final say on asking price.  Take their opinion as guidance and then do your homework.  Check the comparables in your neighborhood.  They are all easily available now on sites like, and
  2. On the other hand, if you are the buyer, make sure you work with an agent who knows what you want and narrows your search down to only those types of listings.  You don’t need to waste your time.  Moving is stressful enough.
  3. Placing the bid – In a down economy, many sellers are not realistic in their pricing and the properties are still over-priced.  As the seller, know that your house is only worth what someone is willing to pay for it.  As a buyer, don’t be scared to make a low-ball offer.  The worst that could happen is that the seller rejects it.
  4. These days many homes are priced “as is.”  That means it’s a take it or leave it offer.  Sure you would still be well advised to get a home inspection done but the “as is” condition means that even if the inspector finds something wrong, the seller doesn’t want to hear about it.  However, once your bid has been accepted, get a house inspector in there PRONTO, before the attorneys get involved and anything is signed on the dotted line.  You can still pull out before the contract is signed if the home inspector finds problems and the seller does not want to give you a downward adjustment on the price.
  5. So, why do you need an attorney?  Have you ever seen a real estate contract?  Do you know what all of the boiler plate language means?  Do you know what is required by the local building code and state statutes in order to sell a house?  What are contingencies and how are they drafted?  How much is a fair down-payment and when should it be paid?  This is not stuff you can pick up by a quick read of “Closings for Dummies.”
  6. Have the names of three area lawyers prior to placing the bid.  Ask the realtor, neighbors or friends for referrals in advance.
  7. Once the bid is accepted, the contract can drag on or speed along at a pleasant pace depending on whom you retain to represent you.  Now that is not to say that every delay will be the attorney’s fault but you need to know that your business matters to the attorney you hire and that she will give it the appropriate attention.
  8. Each party to the deal will have their attorney draft “riders” to the boiler-plate contract, enumerating wants, rights and obligations and then it will be the buyer who signs first and submits a down-payment.  This payment is held in escrow by the seller’s attorney.  If you are the seller and you do not have an attorney, who will hold the escrowed funds?  They do not belong to you until the closing is done and the property transferred.  If you are the buyer, do not make a check out to the seller; make sure those funds are being held by an attorney or escrow agent until the house is yours.
  9. Now comes the fun part – the financing.  All cash deals are rare these days but still happen and make everyone at the table smile.  However, most people are taking out loans, seeking mortgages from banks which are reluctant to hand out a dime.  I have seen people with stellar credit ratings, scores in the 700s, be turned down for a mortgage.  Do not shake your head as you read this (I can hear the emptiness rattling around).  Banks today are being run by overworked and under-educated clerks.  The mortgage departments have been left to the inmates at the asylum and no one knows what is going on.  I have had bank clerks tell me they are waiting for me to submit paperwork while I sit looking at a fax from that very person acknowledging receipt of the documents weeks earlier.  Closings these days rarely take an hour and have been known to last 6 hours because the bank has yet to fund the deal.  Have you ever heard of a “dry closing?”  Would you know what to do if that occurs as you sit at the table?
  10. These are dangerous economic times we are living in and knowing that there is someone being paid to be in your corner when it hits the fan is a great security blanket when you are writing checks for $500,000 and up!  Happy house hunting!

About the author:  Lisa Fantino is an award-winning journalist turned attorney with a general and entertainment practice in Mamaroneck, NY. You can find her all over the web at her Lady Litigator Blog; Lady Litigator on Facebook and even on Twitter.

The only thing I’d add is this: if you are buying or selling a home in Westchester, Rockland or Putnam, you can bet that the other side has a lawyer working for them. If they have one, you need one. You never go to a gunfight with a knife.