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Buying or selling a home is almost always the largest expenditure we make as consumers. Hiring an attorney when buying or selling a home is the best way to protect your interests during this larger-than-life transaction. Let’s look at what real estate attorneys do and why you may need one someday.
If you’ve ever bought or sold a house, a real estate attorney can help things go smoothly. Any transaction that involves large amounts of money changing hands needs an experienced lawyer at the helm. Estate taxes, trusts, capital gains taxes, Medicaid qualifications, MERP, deeds and titles, and a myriad of other issues have complicated laws surrounding them. If you don’t understand the law or employ someone who does, you can lose large amounts of money easily.
According to the Texas Real Estate Commission, established in 1949, attorneys licensed in Texas are exempt from licensure requirements as a broker. In other words, they can do almost exactly the same job your broker can do, and more. (1)
House Contracts
In this all-important transaction, most people throw around thousands of dollars like they are handling one-dollar bills. “Oh, we’ll allow them $5000 for the roof because it needs replacing.” Most people assume that their real estate representative knows how to guide them through the process.
The truth is that an experienced real estate attorney knows much more about the costs and types of contracts you can use to buy or sell a home. They protect your interests by using language particularly tailored to your needs whereas real estate agents often use the same contract form for every transaction they do.
Often, real estate agents will seem perturbed if you ask for a special addendum because of a concern. However, an attorney understands that the whole point of a real estate contract is to protect your interests. Without the proper language, the contract is useless, worse than useless if you face financial trouble because of the language later.
Deed of Trust and Mortgage Issues
If you are struggling to make your home payments and did not qualify for deferment or are concerned about the future when deferment ends, you need an experienced attorney to walk you through your options. These include:
- Foreclosure
- Third-Party Buyers
- Short Sales
- Cash for Keys Programs (Deed in Lieu)
Your lender does not think about your interests when negotiating a new mortgage loan for you or giving you a deferment. The lender is thinking about the money they will make from your interest payments. Third-party buyers often offer you money for your home, but without letting your attorney look over a contract, you could be throwing away thousands. Sometimes foreclosure is the answer and other times, a short sale makes sense. WIthout an attorney guiding you through this process, you are alone in the negotiations. Professionals who make their money in the financial industry are not representing you, the consumer. Real estate attorneys exist to care for your interests and come alongside you as a consumer.
Avoiding Taxes
Another reason to consult an attorney for the entirety of any real estate transaction is to protect your assets from unfounded views about whether you will owe taxes. Especially when selling a home, you can accidentally find yourself paying thousands of dollars in taxes for capital gains. There are certain situations where you will not owe this tax, for example if your spouse has died in the past 2 years or if you are rolling the money into a new home, but often we don’t understand the implications of our home sale until it is too late. An attorney can keep you up to date on what you can expect to pay in taxes.
Deed Transfers
If you have signed a portion of your deed over to a child, the child can find themselves owing a large amount of capital gains taxes because of the gift they’ve been given. You also add to your lifetime tax-free giving allowance when you sign a deed over without consulting a lawyer.
With a live-in boyfriend or girlfriend, you can encounter similar problems. If you sign 50% of your deed over to them, they can expect to pay capital gains taxes also.
Estate Planning Issues
If you are a senior citizen who has not done much planning for the end of life, you may want to discuss your future plans with a real estate attorney. Often, the most expensive asset we own is our home. Without making the proper plans, you can lose the entirety of your home to Medicaid if you eventually need long-term care. You can also lose your home after you pass away if you used Medicaid services while you were living at home there. With proper planning beforehand, you can avoid these large magnitude financial losses and pass the home on to your beloved family instead.
Trusts
Another planning tool that a real estate attorney can work with is a legal framework called a trust. In a trust, you can hold land, homes, assets, other items of value. With the correct language in the documentation, a trust is a valuable tool to avoid lawsuits, bankruptcy losses, divorce losses, probate, and other kinds of financially draining disasters.
This is one area of law that a real estate agent cannot begin to help you with. However, a real estate attorney shines when it comes to protecting your assets, beginning with your most important ones like homes and land.
Real Estate Attorneys Are On YOUR Side
If you are planning your estate, signing over a deed, buying or selling homes or land, or thinking about how to protect your home from Medicaid or other money pits, give us a call at Jarrett Law. We specialize in real estate issues from owning your own home to every related financial endeavor you may become involved in with real estate or deeds.
You can trust that we protect your interests. Unlike a real estate agent who is looking for their commission or a title company who is protecting their own interests, a real estate attorney is on your side wholly and completely. We are uniquely qualified to represent your interests in all real estate transactions and would love to meet with you and discuss your needs. Give us a call or contact us online today to move forward confidently.