Real Estate Attorneys in Investing
A real estate attorney is a lawyer who specializes in real estate law, including property transactions, contracts, title issues, landlord-tenant law, zoning, and dispute resolution. Whether you need an attorney for a real estate transaction depends on your state (some require attorney involvement at closing), the complexity of the deal, and your risk tolerance.
Attorney states vs title company states
Approximately 22 states require an attorney to be involved in real estate closings (attorney states). In these states, the attorney typically reviews the contract, examines the title, prepares closing documents, and conducts the closing. In title company states (including Texas), title companies handle these functions and attorneys are optional but recommended for complex transactions.
When investors should use an attorney
Always recommended: Entity formation (LLCs, trusts), partnership agreements, complex transactions (commercial, syndications), disputes with sellers/buyers/contractors. Sometimes recommended: First wholesale deal (have an attorney review your contracts), creative financing deals (subject-to, seller financing), properties with title issues, multi-state operations.
What an attorney costs
Transaction review: $500-$1,500. Entity formation: $500-$2,000. Contract drafting: $500-$2,000. Closing representation: $750-$2,500. Litigation: $200-$500/hour. While not inexpensive, legal costs are small relative to the property values and potential liabilities involved.
For wholesalers
At minimum, have an attorney review your standard purchase contract and assignment contract to ensure they are enforceable in your state. A one-time $500-$1,000 investment in contract review protects every deal you do going forward. For complex situations (title issues, probate, entity disputes), an attorney consultation can save you from costly mistakes.