Do I Need a Lawyer When Buying a House in California?

real state attorney in California

Do I Need a Lawyer When Buying a House in California?

Real Estate Attorney in California: Do I Need a Lawyer When Buying a House in California?

Whether you’re a first-time homebuyer or experienced in this field, buying property will always be a significant investment. It’s not a decision you should make lightly, what with the high costs and steps involved in it. Given this, it’s always helpful to work with a real estate attorney to guide you through the process, work out all the documents, and avoid legal issues

Getting an attorney is beneficial, especially if you plan to buy property in a new state like California. You might be surprised to find that real estate regulations and practices vary slightly here, especially when hiring a lawyer. So read on to learn more about whether you need a residential real estate attorney when buying a house in California.

Hiring a Lawyer When Buying a House in California

People don’t usually hire attorneys when buying a house in California. And that’s because, contrary to most other states, California state laws don’t require you to have lawyers for real estate transactions, which means you can buy or sell properties with just an agent. However, even if it isn’t required, hiring a real estate attorney is undoubtedly still advisable.

Regardless of the situation, a house doesn’t come cheap, so you must take proper precautions and do your diligence. Back in 2016, 3.9% of home contracts fell through. While this rate seems relatively low, it’s been increasing over the years. Thus, having a reputable lawyer with adequate experience can make a huge difference to help you avoid such pitfalls.

In some cases, mortgage lenders may also require you to hire a real estate lawyer to ensure that the buying process goes smoothly. So make sure to check on this before making an offer on any property.

How a Real Estate Lawyer Can Help You in the Home Buying Process

So, what does a real estate lawyer do anyway, and why should you hire one if it isn’t required? Putting it simply, a residential real estate lawyer will represent you through the home buying process. They can offer valuable legal advice and negotiate deals or issues in your best interest. 

With that, if you’re still unsure about hiring one in California, here’s an overview of how lawyers can help you when buying a home in the state. These may convince you to get extra legal protection for your transaction.

Check for Legal Issues

It’s easy to get carried away and jump into an offer after you’ve found your dream house. However, properties sometimes come with legal issues like an easement, foreclosure, title concerns, liens, and the like. In such cases, it’s essential to conduct due diligence before entering into any agreement with the seller—and this is precisely what your lawyer will do. 

Real estate attorneys evaluate potential deals by checking the property’s history and title to ensure that no one will come to claim ownership later on. They’re well-versed in real estate law, so they can uncover issues that may not be as obvious at first glance.

Negotiate the Offer

Buying a house usually entails back-and-forth communication between buyers and sellers to arrive at the final offer. In most cases, it doesn’t end after you submit your initial proposal, as the seller may counter it or compare it against other buyers’ offers. Your lawyer can help you through the negotiations to ensure that you get the house at a fair price.

Review Purchase Contracts

Before signing the purchase contract, your attorney can review it to ensure that all the terms and conditions are fair and agreed upon by both parties. Contracts should include important details like the earnest money, contingencies, settlement or closing date, date of possession, and inspection requirement.

If you find issues during the inspection, your attorneys can negotiate with the seller to lower the home price or make the necessary repairs. At times, buyers may waive this requirement to beat other buyers, but it can lead to issues down the line. With a lawyer to help you negotiate, you can avoid skipping the need while getting a fair price.

Close the Deal

Closing is another crucial step in the homebuying process, but it comes with much legal paperwork. Your lawyer will review all these documents to ensure nothing is amiss and resolve legal issues before finalizing the transfer of property ownership. Closing and escrow usually take around 30 to 45 days in California, so with a lawyer to help you out, you can streamline the process and ensure everything goes smoothly.

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Other Tips for Buying a House in California

Besides hiring a property lawyer, here are other tips for buying a house in California.

Assess your financial health

It’s always important to assess your personal finance before committing to a big decision like buying a house. Consider how much you’ll need to spend on real estate costs. These typically include:

  • Downpayment. Historically, the down payment for homes stood at 20% of the purchase price, but times have changed. According to the National Association of Realtors, the median down payment was 12% in 2021. And it was even lower at 6% for buyers aged 22 to 30, most likely since they’re first-time buyers.
  • Closing Costs. Closing costs include appraisals, title searches and insurance, lender fees, and others. These are usually split between the buyer and seller, but you can expect to cover most of them as the buyer. In California, closing costs average 0.98% to 1.15% of the final purchase price.

Inspection Costs. Home inspections cost around $320 in Los Angeles, but prices vary slightly for other cities or property sizes. While inspections represent an additional expense, they’re critical to ensuring no significant problems with the house. Or, if any, you can address them with the seller before finalizing the deal.

Research California mortgage rates

If you plan to take out a mortgage for your home, you should also research the rates to estimate how much you’ll have to pay monthly. If you’re a first-time homebuyer, it’ll also help you learn about the different loans you can take out. The most common types are as follows:

  • Fixed-Rate Mortgage. Fixed-rate mortgages or conventional loans are the most common type. As the name suggests, they charge a fixed interest rate throughout the loan duration—usually 15 or 30 years. You also pay the same amount monthly, making it easier to budget your finances.
  • Adjustable-Rate Mortgage. Adjustable-rate mortgages have variable interest rates. The initial rate usually starts below a fixed-rate loan, but the longer you hold the mortgage, the higher the rate can go. Given this, your monthly payments can change many times throughout the loan’s duration.
  • FHA Loan. FHA loans are popular for first-time buyers since they allow a downpayment of as low as 3.5% of your FICO score of at least 580. The downpayment rate goes up to 10% of your credit score between 500 and 579, so make sure to polish your records before taking out this loan.
  • VA Loan. VA loans are guaranteed by the US Department of Veteran Affairs and designed for active service members, veterans, and reservists. They come with many benefits like no down payment or mortgage insurance premiums, low-interest rates, and flexible financing options.

If you decide to hire an attorney for real estate, they can also provide mortgage advice to help you choose the right type. Terms can also vary per lender, so you must take your time comparing rates to find the best offer.

Learn About the Housing Market

Another helpful tip is to learn the current market condition, especially if it’s your first time buying property in California. While a real estate agent will probably be knowledgeable about this, it’s also helpful to understand the market before starting your search. Get to know the house prices in different cities and check out recent trends to set realistic expectations.

FAQs About Hiring Real Estate Attorneys in California

When should you hire a real estate attorney in California?

Generally, it’s recommended that you hire a real estate attorney regardless of the circumstances or type of house you want to buy. However, in terms of timing, you should hire a lawyer before offering any seller since this already constitutes a legally binding contract.

How much do real estate lawyers charge in California?

Rates can vary significantly per lawyer. Some may charge a flat fee, but most will charge an hourly fee for their services. The average hourly rate for real estate attorneys in California is $350.

How to find a real estate attorney in California?

Ideally, you can start by asking friends and family for references if they’ve worked with real estate lawyers in the area. If not, a quick search for a “real estate closing attorney near me” should help you find potential lawyers you can work with. Make sure to do your research and look for someone experienced and qualified in real estate law.

Work with Fernald Law Group to Buy Your Dream House in California

While California doesn’t require you to hire a real estate attorney to buy a house, it doesn’t change that real estate transactions are complicated. With all the legal steps involved in the process, it helps to seek advice from a professional attorney who has adequate experience in the field. 

If you’re looking for a reliable attorney to represent you, Fernald Law Group has you covered. The firm covers real estate as a practice of law, so you can trust them to guide you through the home buying process in California. Contact them today at 323-677-4874, or send them a query through their website to get in touch and discuss your plans to buy a home.

 

 



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